| |
| Here’s your daily business briefing. - 🏥 Q2 2024: Walgreens beats revenue expectations
- 🍫 Deep Dive: Hershey, Mondelez boost Easter amid cocoa crisis
- 🏡 Home Depot acquiring SRS for $18.25B
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Walgreens surpassed analyst forecasts, with second-quarter sales reaching $37.05B, beating expectations of $35.85B. However, despite adjusted earnings per share of $1.20, the company reported a significant net loss of $5.91B, primarily attributed to a substantial goodwill impairment charge linked to VillageMD. More: - Walgreens revised its fiscal 2024 adjusted earnings outlook to $3.20 to $3.35 per share, slightly decreasing from the prior range of $3.20 to $3.50 per share.
- The adjusted earnings guidance revision was attributed to challenges in the U.S. retail environment and an early wind-down of sales-leaseback programs.
- Walgreens reported growth in sales despite obstacles in every business, with its U.S. healthcare division seeing a 33% increase in revenue.
- The retail pharmacy segment reported $28.86B, an almost 5% gain in revenue in the U.S., while the company's international segment saw a more than 6% increase.
- Including vaccinations, the total number of prescriptions filled during the quarter was 305.7 million, representing a YoY increase of more than 2%.
- Quarterly retail sales dropped by 4.5% compared to the previous year, with comparable retail sales seeing a 4.3% decline.
|     | |
| 2 | | 
What the numbers say: Cocoa prices have soared more than $10,000 per metric ton due to adverse weather in West Africa, and have increased costs for chocolate manufacturers. Despite Easter candy sales in the U.S. expected to reach around $5.4B, driven primarily by price hikes rather than increased sales volumes, everyday chocolate, and candy purchases have declined by 3.6% compared to last year, while those for seasonal occasions like Easter have only slightly risen by 0.1%. Relevance: Hershey and Mondelez are grappling with reduced profits amid surging cocoa prices, prompting them to raise consumer prices. With Easter sales vital to offset dwindling impulse buys, chocolate companies are expanding their Easter offerings beyond cocoa-based treats to cater to changing consumer preferences. Retailers are upping discounts on chocolate brands this Easter compared to last year to entice budget-conscious shoppers. More data: Chocolate makers are resorting to "shrinkflation" to tackle rising input costs, while premium brands like Lindt may withstand price increases better. Mainstream manufacturers like Mondelez are diversifying into non-cocoa products to counter cocoa price surges. | | | |
| A message from our sponsor, Amplitude. |  | | Increase conversions—and keep shoppers happy Did you know that 79% of shoppers shop online at least once a month—using websites and apps across various devices? 🤔 Complex journeys can make it difficult to drive effective campaigns and measure impact across channels. The good news? The right digital analytics platform can help you: - Generate personalized campaigns
- Understand and optimize the path to purchase
- Grow revenue and customer lifetime value
Explore six ways your company can get visibility into the impact of your marketing efforts—even when customer journeys get complicated. Get The Guide  | |
|
| 3 | | Home Depot's acquisition of SRS Distribution for $18.25B represents the company's largest purchase, aligning with its objective to enhance sales among professional clientele like contractors and roofers. With professionals contributing 50% of its revenue, Home Depot seeks to broaden its market share by leveraging this acquisition. More: - SRS Distribution spans landscaping, pool, and roofing supplies, operating 760 branches across 47 states with about 11,000 employees.
- The purchase comes after Home Depot's prior professional purchases, such as HD Supply, which it acquired in 2020 for around $8B.
- Home Depot intends to finance the acquisition using cash reserves and debt, anticipating it to impact earnings per share due to amortization, yet bolster cash earnings per share within the initial year.
- As of the end of the fiscal year in late January, Home Depot operates 2,335 stores across the U.S., Mexico, and Canada, with about 465,000 employees, and its stock is up approximately 11% YTD, closing at $385.89 on Wednesday.
| | | |
| 4 | | Amazon's $2.75B investment in Anthropic, its most significant venture investment to date, supplements the initial $1.25B fund. Anthropic, valued at $18.4B, specializes in generative artificial intelligence and has secured approximately $7.3B in funding through five deals in the past year, competing with firms like OpenAI and ChatGPT. More: - The investment coincides with a spike in AI spending, totaling a record $29.1B across nearly 700 deals in 2023.
- Cloud providers such as Amazon, Microsoft, and Google are investing substantially in AI technology to stay ahead in the market.
- Claude 3, the newest model suite from Anthropic, aims to compromise capacity and safety by emphasizing multimodality without producing visuals.
- According to Pitchbook, in 2023, Big Tech invested $24.6B in AI and machine learning, up from $4.4B in 2022.
| | | |
| A message from our sponsor, Conveyor. |  | | We surveyed 275+ infosec/presales teams on the security review impact on sales and here’s what we found. We all know customer security reviews can make or break the sales cycle, but now we have the data to back it up. See these insights and more: - 64% of infosec teams are part of the revenue process today, meaning these teams will have to report on their impact.
- Teams can increase win rates by 42% when they position trust & security early in the sales cycle
- 55% of teams have already adopted AI into their security review process or plan to this year
Dig Into The Data | |
|
| 5 | | Kimberly-Clark plans to streamline its operations by restructuring into three business units, expecting around $1.5B in costs over the next three years, half of which will be in cash costs related to job cuts. This move addresses challenges like diminishing returns from price increases and decreased demand for higher-priced items amid inflation. More: - Kimberly-Clark, Procter & Gamble, and Unilever face growing competition from less expensive private-label products.
- The revamped structure will comprise three segments: North America, international personal care, and international family care and professional businesses.
- Over $3B in gross productivity and $500M in working capital savings for growth initiatives are anticipated from the planned supply chain overhaul.
- By the end of 2024, the new organizational structure should be fully implemented, saving the company an estimated $200M in sales, general, and administrative expenses over the next few years.
| | | |
| 6 | | SingularityNET, Fetch.ai, and Ocean Protocol, three blockchain-based AI firms, have announced plans to merge their cryptocurrency tokens to establish a unified token called ASI, targeting a combined value of $7.6B. Approval from the respective communities of each company is required for the merger to proceed. More: - The merger seeks to democratize access to artificial general intelligence (AGI) and offer an alternative to the dominance of large corporations in the AI sector.
- The combined token network will be managed by the Artificial Superintelligence Alliance, a governing body, even though the platforms will continue to function as independent businesses.
- Ben Goertzel, Humayun Sheikh, Bruce Pon, and Trent McConaghy are the merging companies' founders and CEOs that will spearhead the alliance.
- The move illustrates the competition between smaller AI platforms and tech giants like Alphabet Inc. and Microsoft Corp., emphasizing the race to develop decentralized AI on blockchain.
| | | |
| 7 | | Quick Hits: *This is a sponsored listing. | | | |
| Upcoming Events | * This is a sponsored event | | | |
 | 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 Shriram Jeevakumar | |
| |
 | Amplitude provides the best purchasing experience for your customers with the leading ecommerce analytics solutions. | |
|
 | Conveyor: Instant answers to security questionnaires with market-leading AI. Don’t settle for <90% accuracy. | |
|
| |
