| Here's your daily business briefing. - 🍔 McDonald's Q4 sales drop amid Middle East conflict
- 🚗 Deep Dive: Hyundai, Kia challenge Tesla in U.S. EVs
- 💼 Novo Holdings buys Catalent for $16.5B
Thanks for reading! Shriram
p/Shriram | |
| 1 | | McDonald's ($MCD) reported Q4 results, exceeding earnings estimates with adjusted earnings per share of $2.95 (versus $2.82 expected) but missing on revenue at $6.41B (versus $6.45B expected). The company acknowledged a negative impact on sales and revenue in regions affected by ongoing conflicts and is closely monitoring the situation. More: - Due to difficulties in the Middle East, the rise in global same-store sales in Q4 was 3.4%, shy of forecasts of 4.7%.
- All other markets in the sector reported positive same-store sales growth for the quarter, including China and Japan.
- The Israel-Hamas conflict affected Middle Eastern sales, resulting in boycotts and brief closures in the area.
- Domestic same-store sales increased 4.3% due to growing digital sales and efficient marketing.
- McDonald's has also been rolling out an upgraded version of its burgers nationwide to emphasize the value of its prices.
- The chain aims to open over 2,100 new locations worldwide this year as part of an extensive strategy to expedite its expansion and broaden its customer reach.
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| 2 | | 
What the numbers say: In 2023, Hyundai ($HYMTF) and Kia claimed the second spot in U.S. electric vehicle sales, trailing behind Tesla. The combined sales of Hyundai, Genesis (Hyundai's luxury brand), and Kia, which offer nine electric models, made up 8% of the U.S. electric-car market, challenging Tesla's dominance as it saw a slight decline in its market share. Relevance: Hyundai and Kia are strong Tesla competitors in the U.S. electric vehicle market, boasting rapid growth, strategic EV investments, and a diverse model lineup that appeals to mainstream buyers. Competitive pricing, attractive lease deals, and early investments in purpose-built electric vehicles drive their success. More data: Hyundai and Kia are expanding their U.S. EV presence with plans for a new plant and battery facility in Georgia and a $200M investment in an existing factory for increased EV production. Despite losing a $7,500 tax credit, they've seen EV sales growth, but now they face heightened competition as the number of available EV models is set to double in the coming year. | | | |
| 3 | | Novo Holdings, the controlling shareholder of Novo Nordisk ($NVO), is acquiring Catalent ($CTLT) for $16.5B at $63.50 per share in cash, representing a 16.5% premium. Concurrently, Novo Nordisk will purchase three sterile drug fill-finish manufacturing sites from Novo Holdings for $11B to enhance production capacity and strengthen their existing collaborations. More: - Novo Nordisk wants to increase production capacity for current and upcoming medications, particularly for obesity and diabetes.
- The success of Novo Nordisk's obesity medication Wegovy has prompted the company to invest more than $6B in boosting manufacturing.
- After the merger is completed, which is expected to happen by the end of 2024, Catalent will go private, and its shares will no longer be traded on the NYSE.
- Wegovy supply has been restricted in the U.S. since May to protect access for current patients, but Novo Nordisk has been attempting to raise supplies in response to the growing demand.
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| 4 | | Luxury automakers, including Lamborghini, Ferrari, Bentley, and Rolls-Royce, are thriving due to the growth of the ultra-wealthy population. The focus on customization and personalization has contributed to better-than-expected earnings in the niche market, where around 400,000 individuals globally have at least $30M in potential spending money. More: - In 2023, Lamborghini sold over 10,000 specially customized automobiles, setting a record for the company.
- With Lamborghini's Ad Personum program, customers can select exclusive paint colors and effects, providing unprecedented personalization.
- The vehicle customization program at Ferrari, which generated $6.46B in sales and a $1.36B profit in 2023, is partly responsible for the company's rising profits.
- Custom options increased the price of a Bentley car by around $75,000, while requests for them increased by 43% for Bentley.
- According to Rolls-Royce's Bespoke program, custom options such as distinct paint colors, engravings, and customized interiors are added to three-quarters of the cars sold annually.
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| 5 | | Bristol Myers Squibb ($BMY) outperformed in Q4 with adjusted earnings per share of $1.70 (compared to the expected $1.53) and revenue of $11.48B (surpassing the expected $11.19B). The sales boost was driven by higher sales of new drugs, including Reblozyl and Opdualag, contributing $1.07B, up 66% from the previous year. More: - The New Jersey-based firm was under pressure to introduce new medications as less expensive substitutes for popular therapies like Revlimid and other medications became more competitive.
- Revlimid reported quarterly sales of $1.45B, marking a 36% decline from the previous year.
- Forecast for the entire year 2024: Bristol Myers projects low single-digit growth in revenue and adjusted profits per share of $7.10 to $7.40.
- Opdivo brought in $2.39B, up 8% from the previous year, and Eliquis provided $2.87B in sales during the fourth quarter.
- Reblozyl and Opdualag were two new medications that outperformed revenue projections; however, Abecma and Zeposia did not meet projected sales targets.
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| 6 | | LVMH (MC.PA) aims to capture a portion of the global luxury watch market, valued at approximately $30B in 2023 and projected to exceed $37B by 2032. The luxury conglomerate, with sales of $11.8B in its jewelry and watch division in 2023, seeks to tap into Generation Z's and millennials' growing interest in high-end mechanical watches and increase global wealth. More: - LVMH Watches CEO Frederic Arnault is anticipated to infuse innovation and creativity across the brand group, including TAG Heuer, Hublot, and Zenith.
- Analysts predict the three brands' combined revenues in the prior year were close to $2B.
- About one-third of all sales are in the category of watches for women, which is a focused growth market due to increased visibility on social media and the availability of more models specifically made for women.
- Brands owned by LVMH, like Zenith and TAG Heuer, continuously innovate regarding materials, designs, and complications, emphasizing desirability and reinvention.
- The luxury market is resilient because LVMH brands are reaching out to super-spenders and VIP collectors with limited editions and more expensive models.
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- Spotify has unveiled a new multi-year agreement with comedian and podcaster Joe Rogan, aiming to leverage the popularity of his show for increased advertising revenue.
- Yandex's owner plans to sever ties with Russia in a $5.2B sale, marking the biggest corporate exit since Moscow's invasion of Ukraine.
- Merck is set to acquire Elanco Animal Health's aqua business for $1.3B, enhancing its presence in the animal health sector.
- The 30-year fixed mortgage rate reached 7.04% on Monday, experiencing fluctuations since summer and briefly reaching a 20-year high of 8% in October.
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 | 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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