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| Here’s your daily business briefing. - 📉 Warner Bros. Discovery stock dives on ad slump
- 📦 Deep Dive: Return fees deter online shoppers
- 📱 TikTok enters e-commerce logistics
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | Warner Bros. Discovery posted Q3 results, reporting a net loss of $417M, or $0.17 per share, an improvement from the previous year's $2.31B loss. However, the loss per share of $0.17 fell short of analysts' expectations of $0.06, leading to a 15% decline in the company's stock, and the reported revenue of $9.98B was in line with analysts' expectations. More: - Declining audiences and sluggish ad patterns in the U.S. caused a 12% decline in ad revenue for Warner Bros. Discovery's TV Networks division from the prior year.
- The business listed weak ad income and the continued effects of an actors' strike as difficulties for 2024.
- The number of global direct-to-consumer members to Warner Bros. Discovery's streaming service dropped by 700,000 from the previous quarter to 95.1 million.
- Though the streaming company did make money, the decline was ascribed to a light content slate.
- During the quarter, the corporation repaid $2.4B in debt, leaving its gross debt at $45.3B.
Zoom Out: - The third quarter was the first entire period since the launch of Warner Bros. Discovery's Max streaming service, merging HBO Max and Discovery+.
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| 2 | | 
What the numbers say: In 2022, consumers returned over 16.5% of online products, up from 9.6% in 2019. Roughly a third of businesses surveyed by logistics firm Happy Returns have seen a decline in customers due to the introduction of online return fees, with the National Retail Federation anticipating nearly 18% of holiday season merchandise returns in 2022, causing companies to lose around 50% of their margin. Relevance: To counter the surge in e-commerce sales and mounting returns costs, retailers have introduced return fees, which have helped reduce the return rate. However, these fees come with the downside of potentially alienating customers, especially during the holiday season, which may not be an effective strategy to attract new buyers. More data: Many retailers (81%) have introduced return fees in various forms in the past year, although these fees may only partially cover return processing costs. For instance, Amazon charges a $1 return shipping fee via UPS, H&M imposes a $5.99 fee for U.S. Postal Service returns (waived for loyalty program members), and Zara has a $3.95 return fee. Stricter return policies, including these fees, have deterred 59% of consumers from purchasing, per a survey by supply-chain software provider Blue Yonder. | | | |
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| 3 | | TikTok is strengthening its e-commerce presence in the U.S. by building a logistics network that includes warehouses and fulfillment services. This expansion aims to improve TikTok Shop, offering inventory management and dependable delivery through partnerships with companies like ShipBob and Newegg, in contrast to Amazon's in-house logistics. More: - With 150 million users in the U.S., the app's increasing popularity has led to influencers marketing different things to users.
- TikTok is launching TikTok Shop to boost in-app sales and enable influencers to connect users with products directly.
- The app competes with major retailers such as Amazon, Target, Walmart, and e-commerce platforms Shein and Temu.
- In light of its foray into e-commerce, TikTok must win over customers and navigate regulatory obstacles.
- TikTok stands out in the crowded U.S. e-commerce market by incorporating logistics services.
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| 4 | | Amazon is shutting down its two "Amazon Style" clothing stores in California and Ohio, aligning with previous store closures, like bookstores. The company's physical store strategy now concentrates on grocery outlets, including Amazon Fresh and Whole Foods, while emphasizing the importance of physical retail, especially in the grocery sector. More: - Amazon's clothing stores utilize advanced dressing rooms to enable customers to try on items from various brands, including its private labels, aiming to enhance apparel sales.
- A new shopping experience with staff members helping clients in fitting rooms was provided by the first Amazon Style store, which debuted in Glendale in 2021.
- Andy Jassy, the CEO of Amazon, has spearheaded attempts to reduce costs by closing retail stores and removing unproductive business units.
- Amazon prioritizes its grocery business but encounters challenges, competitive pressures in online retail, and legal pricing concerns.
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| 6 | | Last week, media stocks had an intense day, led by Roku's remarkable 30% gain on the back of its Q3 earnings. Paramount and Warner Bros. Discovery rose by approximately 10%, Disney shares climbed nearly 3% after acquiring Comcast's remaining Hulu stake, and both Netflix and Comcast saw over a 1% increase in their stock prices. More: - Roku announced encouraging trends in TV adoption under its own brand, advertising, and content distribution.
- In the third quarter, the company's active accounts surpassed analyst forecasts, coming in at 75.8 million as opposed to the predicted 75.33 million.
- Due to its large user base, Roku gives users more ways to access services like Peacock, HBO Max, Paramount+, and Netflix.
- In Q3, Netflix surprisingly increased subscribers, driven by its ad-supported tier, which gained 15 million subscribers, tripling the announced 5 million in May.
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| 7 | | Quick Hits: - Upway offers discounted e-bikes from top brands with a one-year warranty and 14-day returns. Buy your e-bike by Nov. 9 for a chance to enter a giveaway and receive your money back.*
- General Motors' self-driving vehicle subsidiary, Cruise, has initiated a recall of all 950 of its autonomous vehicles for a software update, prompted by an incident that halted public testing operations last month.
- A senior Chinese official expressed readiness to enhance relations with Washington, just days ahead of the eagerly anticipated meeting between Xi Jinping and Joe Biden in San Francisco.
- Virgin Galactic is cutting jobs and expenses to support Delta Class spaceship production due to challenges accessing capital caused by interest rates and geopolitical unrest.
- Tyson is recalling nearly 30,000 pounds of chicken nuggets due to consumer complaints of metal pieces in the product, resulting in one minor oral injury.
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Term of the Day Customer Satisfaction: Customer satisfaction is typically measured through surveys or feedback forms that measure the customer's perception of a company's products. Question of the Week What perks would convince you to return to the office? Join the conversation |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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