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| Here's your daily business briefing. - 📈 Under Armour shares soar despite sales dip
- 🏈 Deep Dive: Super Bowl and the star-studded commercials
- 🌍 HSBC, Google partner for $1B climate tech goal
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Under Armour ($UA) reported mixed results for its 2023 holiday quarter, with slow sales in its wholesale channel and soft demand in North America. The company reported adjusted earnings per share of $0.19, exceeding expectations of $0.11, and revenue of $1.49B, slightly below the expected $1.50B. More: - Despite a 6% revenue decline, Under Armour improved its gross margin by 1% to 45.2%, raising full-year expectations by 1.2 to 1.3 percentage points.
- Thursday morning trading saw a 3% increase in the company's shares.
- While direct sales increased by 4% to $741M, primarily due to improvements in retail (5% increase) and internet sales (2% increase), wholesale revenue fell by 13% to $712M.
- Retail partners like Dick's Sporting Goods, Kohl's, and JD Sports reduced orders amid industry-wide challenges, reflecting a broader trend in the apparel sector to streamline order books amid economic uncertainty.
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| 2 | | 
What the numbers say: Last year's Super Bowl saw over 40% of commercials featuring multiple celebrities, a nearly sixfold increase from 2010. Celebrity-free ads during recent games are now rare, constituting less than a third of all commercials, while the price for 30 seconds of airtime has surged to around $7M, a substantial rise from the $42,000 paid during the inaugural Super Bowl in 1967. Relevance: Brands utilize celebrities in Super Bowl ads for visibility and social media impact, leveraging attention and engagement. Multiple celebrities in ads aim to broaden reach, tapping into their wide audience and influence, while Super Bowl commercials remain a reliable method, drawing over 100 million viewers annually. More data: Candy and snack-food brands, including Oreo, Drumstick, Reese's, Nerds, M&Ms, and Lindt, dominate Super Bowl advertising in 2023, seeking viewer attention. These commercials generate significant pre-game buzz, amassing 1.3 million interactions on social media platforms ahead of the game. | | | |
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| 3 | | HSBC ($HSBC) has collaborated with Google ($GOOG) to finance climate technology firms, with a target of reaching $1B. The partnership entails HSBC providing funding to companies chosen by Google as part of its Google Cloud Ready-Sustainability program, where Google evaluates technology solutions, and HSBC offers financing to support these partners in expanding their operations. More: - HSBC has surpassed internal goals with its objective to invest $1B in climate tech businesses by 2030.
- Through collaborations, HSBC seeks to expedite the transition of 1.3 million clients to net zero by 2050, such as its partnership with Google.
- The venture debt deals facilitated by the partnership include LevelTen Energy as the first startup to benefit.
- It is estimated by the International Energy Agency that presently unscaled technologies will be responsible for about half of the emissions reductions required by 2050.
- This strategic initiative involves 30 cloud-based tech companies providing carbon emission reduction solutions, with the bank facilitating connections between clients and these climate tech firms.
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| 4 | | CVS Health ($CVS) adjusted its 2024 projections downward due to heightened medical costs affecting its Medicare insurance business, with earnings per share at $2.12 compared to the expected $1.99 and revenue reaching $93.81B against the projected $90.41B. Despite solid fourth-quarter earnings, increased healthcare service utilization by members of its Medicare plans prompted the company to revise its guidance. More: - CVS Health downgraded its 2024 earnings guidance with a revised earnings-per-share projection of at least $7.06 (from $7.26) and adjusted earnings of at least $8.30 per share (from $8.50).
- CVS projects that healthcare costs will remain high until 2024, with an additional $400M in spending.
- The insurance unit's fourth-quarter medical loss ratio of 88.5% was a little higher than the 88.2% predicted by analysts.
- Revenue for the company's health services division came in at $49.15B for the quarter, up 12.3% from the same period in 2022.
- The company's consumer wellness and pharmacy segments brought in $31.19B during the quarter, an 8.6% increase over the same period last year.
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| 5 | | Hawaiian Airlines ($HA) becomes the first major U.S. airline to provide complimentary Wi-Fi onboard using SpaceX's Starlink, with CEO Peter Ingram commending SpaceX's technology for its high-quality connectivity. JetBlue Airways ($JBLU) and Delta Air Lines ($DAL) have also introduced free Wi-Fi onboard, with Delta extending the service exclusively to its loyalty program members. More: - Hawaiian Airlines offers flights to the continental U.S., Japan, Australia, and New Zealand, among other destinations across the Pacific Ocean.
- Hawaiian Airlines and SpaceX inked a contract in April 2022 for Hawaiian Airlines to use the Starlink network, which has 2.3 million users globally and more than 5,000 satellites.
- SpaceX has received FAA certification for Starlink installations on various aircraft types, having secured deals with airlines including airBaltic, Zipair, and Qatar Airways.
- SpaceX's vice president of Starlink business operations, Chad Gibbs, emphasizes the exceptional connectivity available to travelers on commercial flights.
Zoom Out: - Alaska Airlines reached a $1.9B deal to acquire its rival Hawaiian Airlines last year.
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| 6 | | L'Oreal's 2023 sales and profits fell short of analysts' expectations, affected by geopolitical tensions, inflation, and a sluggish beauty market in China. In Q4, L'Oreal's global sales rose 2.8% to $11.44, leading to an 8.4% increase in annual net profit to $6.67B and a 9.2% growth in operating profit to $8.78B. More: - For the second year in a row, L'Oreal's sales in Europe increased by 13.7% in reported terms to $14.03B, making it the single biggest growth driver.
- Revenue increased by 9.7% to $12.06B in North America, driven by the impressive results of the L'Oreal Luxe and dermatological beauty divisions.
- Latin America saw a 22.8% increase in sales to $3.15B, while North Asia saw a 5.8% decline in revenue to $11.50B, mostly from mainland China.
- The proposed dividend at the annual general meeting is $7.12 per share, which represents a rise from the previous year's $6.47.
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- Hershey introduced a two-year restructuring program targeting $300M in pre-tax savings after reporting sales and profit below Wall Street expectations.
- Wilson Sporting Goods will release its first 3D-printed basketball, the Wilson Airless Gen1, on Feb. 16, following the success of its airless basketball prototype.
- Google has rebranded its Bard chatbot to Gemini, introducing a new AI and offering consumers the option to pay for enhanced reasoning capabilities as it competes with Microsoft for subscriptions.
- Delta, grappling with overcrowding in its popular Sky Club lounges, intends to open "premium" lounges in New York, Los Angeles, and Boston this year.
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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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