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| Here's your daily business briefing. - 📚 Study: Mounjaro tops Ozempic
- 👜 Deep Dive: Coach boosts Tapestry
- 🏢 Blackstone acquires Civica
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Shriram
p/Shriram | |
| 1 | | A real-world analysis indicates that Eli Lilly's Mounjaro is more effective for weight loss than Novo Nordisk's Ozempic in overweight or obese adults, with Mounjaro patients significantly more likely to achieve 5%, 10%, and 15% body weight loss. The Truveta Research study, involving around 18,000 adults starting Mounjaro or Ozempic between May 2022 and September 2023, included nearly 52% with Type 2 diabetes. More: - Mounjaro users were three times more likely to achieve a 15% weight loss, 2.6 times for 10%, and 1.8 times for 5%, compared to Ozempic users.
- At three, six, and 12 months, Mounjaro users consistently outperformed Ozempic users in weight loss, achieving 5.9%, 10.1%, and 15.2%, respectively, compared to 3.6%, 5.9%, and 7.9%.
- Both medications have comparable adverse gastrointestinal effects.
- Mounjaro and Ozempic, both weekly hormone-mimicking injections, differ as Mounjaro includes an extra hormone (GIP), potentially enhancing its impact on appetite and blood sugar.
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| 2 | | 
What the numbers say: Even after a 5% increase during the earnings call, Tapestry's stock is trading at 6.8 times anticipated earnings, less than the five-year average of 10.4 times. Tapestry, the parent company of Coach, reported 0.4% revenue growth for Q3, below the expected 2%, but exceeded earnings expectations with $0.93 per share. Coach achieved 5% constant currency revenue growth, beating analyst predictions for the eighth consecutive quarter, and Tapestry saw a decade-high gross margin of 72.5%. Relevance: Tapestry's robust performance, especially with the Coach brand, eases concerns after it acquired Capri Holdings, owner of Michael Kors. Coach's consistent revenue growth reinforces investor confidence in Tapestry's capability to revitalize Michael Kors. Despite a slight dip in revenue expectations, Tapestry retained its earnings-per-share outlook, reflecting pricing strength and confidence in profitability. More data: Tapestry increased handbag prices, boosting gross margins, with a 17% YoY inventory reduction for full-price holiday sales. Coach's 30% price hikes on popular bags fueled strong inventory demand. Despite a 5% post-earnings rally, Tapestry's stock trades at 6.8 times forward earnings, below the five-year average of 10.4 times. | | | |
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| 3 | | Blackstone, the U.S. private equity firm, has entered a deal to acquire U.K. software developer Civica for nearly $2.5B, including debt. This represents Blackstone's second multibillion-dollar European deal in a short timeframe, following recent investments in U.K. hotels and affordable housing projects. More: - Amid a downturn in European buyout activity, Blackstone's recent actions suggest a potential revival in deal-making, driven by stabilizing interest rates and a rebounding equity market.
- Partners Group's 2017 acquisition of Civica for $1.396B included the software business, which is now appealing to buyout firms for its role in enhancing operational efficiency.
- Civica, a global operator, offers software solutions for payroll, medical records, and property management, serving over 6,000 public agencies in education, government, and healthcare.
- Among their clients are the Madison Suburban Utility District in Tennessee, the city of Ravenna in Ohio, and the Department of Health and Social Services in Alaska.
- The acquisition is consistent with Blackstone's plan to capitalize on the expanding market for software services across multiple industries.
Zoom Out: - Adevinta, an online classifieds company registered in Oslo, is the target of a tender offer from Blackstone and Permira, valued at approximately $13.2B for the company's shares.
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| 4 | | Following the bankruptcy of its former parent, Bed Bath & Beyond, Buybuy Baby's new owners have reopened 11 stores. The baby-products retailer plans to expand by opening over 100 new U.S. stores in the next three years and exploring international opportunities while considering smaller footprint stores for approximately 200 additional locations. More: - Pete Daleiden, the CEO, underlined the need to shop for baby products in person, pointing out the benefit of having professionals available in-store to help, demonstrate, and offer advice.
- The reopened establishments are located in suburban areas from Virginia to Massachusetts on the Eastern Seaboard.
- The decision to reopen physical sites fits with a more significant trend of retailers realizing the value of physical locations for boosting sales and consumer interaction.
- As a result of the industry's recovery, retailers are expected to open over 1,000 net new locations in the U.S. this year.
Zoom Out: - According to real estate services firm CBRE, retail availability in the U.S. dropped to 4.8% in the third quarter, the lowest level in at least 18 years.
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| 6 | | Chicago-based food retailers Foxtrot and Dom's Kitchen & Market are merging in an all-stock deal, forming the combined entity Outfox Hospitality. The new group will be led by Foxtrot's CEO, Liz Williams, while Dom's Kitchen Chairman Jay Owen will become the holding company's chairman, and co-founder Don Fitzgerald will serve as president and COO during the transition period. More: - Foxtrot has over 30 bodega-style convenience stores in Austin, Dallas, Chicago, and Washington.
- In January 2022, Foxtrot raised an additional $100M, increasing its total capital to $160M.
- Bob Mariano established Dom's Kitchen in 2021, and it now runs two sizable supermarkets in Chicago's Old Town and Lincoln Park neighborhoods.
- The merger aims to maintain both brands, with future integration of rewards programs and internet ordering apps planned.
- With plans to sell or go public as a merged company, the deal is anticipated to be finalized in the fourth quarter.
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| 7 | | Quick Hits: - Competitors are killing your efficiency. Read how Greenhouse gained $85mil in revenue from reps who used Klue over non-Klue users.*
- Shein, valued at $66B, has confidentially filed for an IPO and selected Goldman Sachs, JPMorgan, and Morgan Stanley as lead underwriters.
- ByteDance, the owner of TikTok, is cutting hundreds of jobs in its games division and exploring the sale of existing gaming titles from Nuverse, marking a significant retreat from the gaming industry.
- Media brands are further distancing themselves from Elon Musk's X platform, not just pausing paid campaigns but also going silent on the once pivotal site that aimed to be the global "digital town square."
- Volkswagen joins other non-union carmakers like Nissan, Hyundai, Honda, and Toyota in raising U.S. workers' pay, implementing an 11% increase.
*This is a sponsored listing. | | | |
 | 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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