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| Here's your daily business briefing. - 🎬 Paramount surprises with profit, robust streaming
- 🔍 Deep Dive: Amazon Prime Video ads
- 🛍️ TJX beats earnings, offers cautious outlook
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Paramount Global ($PARA) announced a surprise profit in Q4 with earnings per share at $0.04, surpassing the anticipated loss of $0.01, despite missing revenue expectations at $7.64B compared to the projected $7.85B. The company's quarterly profit surged to $514M, a substantial increase from the previous year's $21M. More: - Paramount, housing brands like CBS, Showtime, BET, Nickelodeon, and its namesake movie studio, experienced a 6% YoY revenue dip but made significant progress in its streaming segment.
- Paramount+ achieved a subscriber base of 67.5 million during the period, witnessing a net growth of 4.1 million.
- Paramount+ saw a 69% increase in revenue from the previous year and projects profitability by 2025.
- Revenue from its direct-to-consumer division increased 34%, while subscription revenue increased 43%, partially due to pricing increases.
- The company reported a 12% YoY decline in TV media revenue, citing a 15% drop in advertising revenue due to global advertising market softness and a 5-percentage point impact from reduced political advertising.
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Amazon Prime Video introduced ads in the U.S. starting in February, offering viewers the choice to pay extra for an ad-free experience. What the numbers say: Amazon Prime Video's entry into the connected TV advertising market makes it the third-largest seller in the U.S., and it is projected to rise to the second position by 2025, following Hulu. Amazon expects Prime Video ads to reach 115 million U.S. viewers monthly, generating an annual revenue of $5B, with $3B from ad sales and $1.8B from subscribers opting for the ad-free service. Relevance: Amazon aims to transform TVs into shopping platforms, leveraging its extensive customer data and delivery network. The success of Prime Video ads is crucial for Amazon's continued revenue growth as it seeks to capitalize on the growing shift toward streaming services and digital advertising. More data: Amazon's Prime Video ads are luring brands with competitive rates and minimal spending requirements, although the challenge remains in establishing TV-based shopping habits. Leveraging its expertise in online advertising and deep customer insights, Amazon is well-positioned to succeed as it aims to reshape consumer behavior. | | | |
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| 3 | | TJX Companies ($TJX) reported a 13% increase in holiday quarter sales but guided Wall Street expectations, citing anticipated challenges in upcoming YoY comparisons and uncertainty in the growth trajectory. The strong performance was driven by TJX's off-price retail brands, such as T.J. Maxx, Marshall's, Sierra, and HomeGoods, resonating with value-seeking shoppers amid inflation. More: - TJX reported slightly higher-than-expected revenue of $16.41B and earnings per share of $1.22 for the fourth quarter of its fiscal year.
- Marmaxx, including T.J. Maxx, Marshall's, and Sierra, reported a 5% rise in comparable sales, while HomeGoods saw a 7% increase, driven by consumer interest in enhancing existing spaces.
- TJX forecasts Q1 earnings per share of $0.84 to $0.86, falling below the upper limit of Wall Street's estimate range of $0.82 to $0.93, and projects full-year earnings per share of $3.94 to $4.02, compared to estimates of $3.88 to $4.40.
- The American multinational off-price department store corporation guidance shows worries about maintaining growth in the face of more difficult competition and unpredictability in the retail market.
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| 4 | | Disney ($DIS) and Reliance have entered into a binding agreement to merge their media operations in India, forming a powerhouse valued at $8.5B. Under the deal, Reliance will have a 36.84% stake and invest $1.4B for growth, Disney will hold 16.34%, and Viacom18 Media Pvt. Ltd. will retain the remaining 46.82%, with the completion anticipated in Q4 2024 or Q1 2025. More: - The joint venture will have access to over 30,000 Disney content assets and the unique right to distribute Disney projects and films in India.
- The sports broadcasting expertise and content inventory of Disney-Star India will be beneficial to Reliance's Jio Cinema streaming business.
- The merger enhances the joint venture's competitiveness against global rivals such as Netflix Inc. and Amazon Prime Video in India's entertainment market.
- The American multinational mass media received financial advice from Raine Group and Citi Group, while Goldman Sachs advised Reliance and Viacom18.
Zoom Out: - Reliance outbid Disney for the streaming rights of the Indian Premier League in 2022 and secured a multi-year pact in April to broadcast Warner Bros Discovery Inc.'s HBO shows that were previously with Disney.
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| 5 | | Wolverine World Wide Inc. ($WWW) recorded a Q4 revenue drop of 20.8%, reaching $526.7M, with the full fiscal year 2023 reporting a 16.5% YoY decrease at $2.24B. The recent sale of Sperry to Authentic Brands Group and the Aldo Group contributed $130M to Wolverine's Q1 2024 finances. More: - Brands Merrell, Saucony, Wolverine, and Sweaty Betty experienced double-digit declines in revenue, with Merrell dropping by 16.6%, Saucony by 13.4%, Wolverine by 27.9%, and Sweaty Betty by 7.6%.
- The corporation projects further revenue declines in the 2024 fiscal year, with a 12.2% to 14.7% decline in revenue expected to fall between $1.7B and $1.75B.
- In the fourth quarter, DTC revenue decreased by 17.6% to $186.9M, while international revenue decreased by 5.1% to $267.2M.
- The company ended Q4 with $373.6M in inventory, a dramatic fall of over 50% from the prior year.
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| 6 | | Fidelity Investments reported a 41% YoY increase in the number of 401(k) millionaires for the entire year. In the fourth quarter alone, the number of 401(k) accounts with balances exceeding $1M grew by 20%, reaching a total of 422,000 accounts. More: - By the end of the fourth quarter, all members' average 401(k) balance had increased to $118,600, representing a 14% annual growth.
- Additionally, these millionaires' average account balance was $1,551,300.
- The average 401(k) balance among Gen Xers — those who have been saving for at least 15 years straight — surpassed $500,000.
- Strong market performances, consistent savings rates, and employer-provided matching contributions were among the factors that led to increased balances.
- Fidelity highlighted that 27% of plan participants raised their contribution rate independently, and 78% contributed enough to qualify for their employer's full matching contribution.
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- Wendy's clarified in a blog post that its trial of dynamic pricing on menus, where prices change throughout the day, is not intended to increase costs for customers.
- Citigroup plans to lay off 286 employees in New York across its primary banking subsidiary, broker-dealer unit, and technology arm as part of its significant restructuring.
- Reckitt reported a 1.2% decline in fourth-quarter sales, falling short of expectations, leading to a decrease in its stock value amid easing inflation, while the company anticipates more modest growth in 2024.
- Universal Music plans to cut costs and reduce headcount as part of a strategic restructuring, with the organizational redesign aimed at achieving $270M in annual savings by 2026.
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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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