| |
| Here's your daily business briefing. - 💼 Q2 2024: Darden surpasses earnings
- 🌐 Deep Dive: Global ad growth to decelerate in '24
- 🛍️ Shopping habits evolve for Chinese tourists
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thanks for reading!! Shriram
p/Shriram | |
| 1 | | Darden Restaurants, owner of Olive Garden and LongHorn Steakhouse, reported quarterly earnings surpassing expectations, with adjusted earnings per share at $1.84 (vs. $1.74 expected) and revenue slightly below expectations at $2.73B (vs. $2.74B expected). Due to the addition of Ruth's Chris Steakhouse outlets and a 2.8% rise in same-restaurant sales, sales increased by 9.7% over the same period last year. More: - Same-restaurant sales at Olive Garden increased by 4.1%, while LongHorn Steakhouse reported a 4.9% increase during the quarter.
- For the quarter, fine dining sales decreased by 1.7%.
- Darden increased its projected adjusted earnings per share for the entire fiscal year from $8.75 to $8.90.
- The Florida-based American multi-brand restaurant operator anticipates $11.5B in revenue for the upcoming fiscal year and will launch between 50 and 55 new eateries.
- Following the acquisition of Ruth's Hospitality Group, owner of Ruth's Chris Steak House, Darden will include same-store sales from the restaurant after a 16-month ownership period.
|     | |
| 2 | | 
What the numbers say: Global ad spending growth is expected to slow to 5.3% in 2024 (excluding U.S. political advertising), down from the anticipated 5.8% increase in 2023, according to GroupM. The top five global ad sellers — Alibaba, Amazon.com, Bytedance, Meta Platforms, and Alphabet's Google — experienced a compound annual growth rate of 25.4% from 2016 to 2022, surpassing the total advertising market's 9.3% pace, with digital advertising spending projected to exceed the entire industry's spending in 2022 by 2028. Relevance: The anticipated deceleration in ad growth in 2024 is linked to elevated interest rates impacting consumer and business spending, diminished advertising growth from Chinese firms, and economic difficulties in Europe, according to GroupM. The next five years are expected to see stable growth, driven by advancements in AI and channel digitization, as GroupM suggested. More data: Magna forecasts a slowdown in global advertising spending growth to 5.8% in 2024 (excluding cyclical events) from 6.5% in 2023. Including cyclical events, Magna expects a growth increase to 7.2% in 2024 from 5.5% in 2023, driven by economic stabilization, lower inflation, and digital innovation. Major digital players, the top five global sellers, experienced 25.4% compound annual growth in ad revenue from 2016 to 2022, surpassing the total advertising market. | | | |
| A message from our sponsor, Docker. |  | | Docker AI: From Prototype to CI/CD Pipeline
Want to empower your devs to enhance their AI applications?
The number of generative AI tutorials, how-to videos, podcasts, books, and online courses for setting up your first generative AI chatbot, AI/ML prototype application, or agent for self-learning and exploration seems to grow each day.
Docker’s containerization technology stands out as a robust, reliable mechanism that reduces friction and aids the flow of AI, ML, and generative AI development projects into existing DevOps and CI/CD workflows. With Docker, your devs can comfortably work with the tools they know and love to shape the new frontier of AI and enhance your business.
Seize the opportunity! Explore further in our brief and discover how your team can optimize AI development with Docker’s automated guidance. Simplify AI development with guidance from Docker. Download Now | |
|
| 3 | | Chinese travelers, now prioritizing experiences over shopping, particularly among those under 40, are influenced by Xiaohongshu ("China's Instagram") to explore unconventional routes and trendy selfie spots instead of traditional shopping-focused tours. Retailers heavily invested in "travel retail" face challenges as consumer habits change with evolving preferences for experiences over shopping. More: - Businesses such as Estée Lauder and Shiseido have seen declines in their earnings projections, which they attribute to challenges facing their retail travel business in Asia.
- With Chinese tourists becoming less interested in buying, premium department stores like Harvey Nichols in Hong Kong are adapting to the change.
- The pandemic-induced surge in e-commerce, the growing prominence of luxury brands in China, and the closing price gap influence consumers' evolving purchasing habits.
- In the recent Double 11 festival, Alibaba's travel platform Fliggy sold over 400,000 ticket packages, including all-you-can-fly passes, and nearly 2.5 million accommodation packages.
- Approximately 63% of outbound visitors are young Chinese, and they value developing personal travel narratives more than traditional purchasing activities.
| | | |
| 4 | | Uniqlo has succeeded with its self-checkout system, embraced by 70% of customers and reaching 90% adoption in some markets. The system employs RFID readers to automatically identify RFID chips embedded in Uniqlo's product price tags, a crucial technology as the company sells a billion pieces of clothing annually across its numerous global stores. More: - Fast Retailing implemented RFID tags in 2013, introduced self-checkout machines in 2014, and transitioned to the current model in 2019.
- It officially deployed the RFID-enabled self-checkout system across all U.S. Uniqlo stores in 2022 after a trial in 2021.
- Takahiro Tambara, the chief information officer of Uniqlo's parent business in Japan, Fast Retailing, devised a strategy.
- The system has revolutionized the self-checkout process, which uses RFID chips in price tags to make it quick and pleasant for customers.
- Since others in the retail sector are eliminating self-checkout lanes to prevent theft and shoplifting, the Japanese casual wear retailer stands apart due to its investment in RFID technology.
| | | |
| A message from our sponsor, DoiT. |  | | Don’t let cloud costs hold you back. DoiT’s Cloud Growth Accelerator Program gives you access to exclusive AI-based tools and expert support. Focus on innovation while DoiT helps you save on cloud costs and avoid billing surprises. This program will enable you to: - Optimize your cloud spend
- Tackle complex cloud-related issues
- Access unlimited cloud consulting, training, and faster support 24 hours a day, 365 days a year…all at zero cost
Schedule an evaluation today to learn more. Schedule an evaluation | |
|
| |
| 6 | | Luxury goods stocks, such as LVMH, Richemont, and Kering SA, are expected to undergo a two-part shift in 2024, with a slow start followed by a later revival. The initial optimism in early 2023 has faded due to economic indicators signaling a weakened recovery in China, highlighting the importance of a resurgence in demand from Chinese shoppers for a stronger second half in the luxury sector. More: - Approximately 25% of the $397B (€362B) global luxury sector comprises consumers in China.
- Through their enduring appeal and pricing power, luxury brands such as Hermès International have managed to sustain a significant pace during the pandemic.
- With businesses like LVMH and Richemont still more than 15% below their 2023 peak, some investors see the recent decline in luxury stocks as a buying opportunity.
- Despite a tough first-quarter forecast, the luxury market is expected to improve in the second half of 2024, driven by increased Chinese consumer spending and tourism growth.
| | | |
| 7 | | Quick Hits: - Smart investors are generating passive income by selling their shareholder voting rights. Register on Shareholder Vote Exchange*
- Harvard College saw a 17% drop in early applications, accepting 692 students from 7,921 applicants for the Class of 2028, resulting in an 8.7% acceptance rate, up from 7.6% last year.
- The International Energy Agency predicts a peak in global coal demand this year, with a potential 2% decline over the next three years due to China's expanding use of renewable energy sources.
- Handmade sushi kiosks are replacing deli counters and cafes in UK supermarkets amid the inflation crisis, presenting a $7.6B growth opportunity for Hana Group across Europe.
- Teamsters voted to authorize a strike at AB InBev, with 5,000 workers at 12 breweries prepared to strike for a new contract with improved wages and job security.
- 100K companies automate scheduling with Calendly. Teams are seeing 2x conversion rates, 30% increased customer retention, and 323% ROI. Sign up free.*
* 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 | |
| |
 | Developers bring their ideas to life with Docker. Accelerate how you build modern apps. | |
|
 | DoiT delivers the true promise of the cloud with ease, not cost. | |
|
| |
