| Here's your daily business briefing. - 🍔 Shake Shack surges 26% on strong Q4, 2024 outlook
- 🕵️ Deep Dive: Lyft's misprint obscures upbeat earnings
- 🍺 Molson Coors targets market share as consumers shift
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Shake Shack's ($SHAK) shares jumped 26% on robust Q4 earnings, with total revenue reaching $286.2M, exceeding expectations, and earnings per share at $0.02, surpassing the anticipated $0.01. The firm posted a net income of $6.8M, a significant improvement from the previous year's loss of $8.1M. More: - A notable 20% rise in revenue was observed year over year, coinciding with the inauguration of 15 new restaurants in the quarter.
- Shake Shack wants to open 80 more locations and expects its overall sales to climb by 11% to 15% by 2024.
- The company is targeting another year of robust growth and margin expansion, with plans to double its size from five years ago and increase its footprint to approximately 600 locations.
- In 2024, CEO Randy Garutti predicted the business would develop and increase its margins.
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| 2 | | What happened: Lyft initially reported a plan to enhance adjusted earnings margins by 500 basis points in 2024, causing a surge in stock to over $20, but later clarified that the increase would be 50 basis points, leading to a 15% gain. 
What the numbers say: Despite the correction, Lyft's positive performance indicates progress in boosting ridership and competing with Uber. Lyft outperformed expectations in the fourth quarter with a 17% YoY increase in gross bookings to $3.72B while reporting a net loss of $26.3M; the company anticipates first-quarter adjusted earnings of up to $55M, surpassing analysts' estimates of $49.5M. Relevance: A clerical error in Lyft's press release inflated its earnings outlook, causing a stock surge, but CEO David Risher took responsibility, emphasizing it as a one-time mistake. Despite this setback, Lyft's robust earnings report signals progress in boosting ridership and challenging competitors like Uber, underlining the importance of accurate financial reporting for investor trust. More data: Lyft's active riders grew by 10% to 22.4 million in Q4 2023, facing tough competition from Uber, which holds about 70% of the US rideshare market. Despite a 35% increase in rides from events like concerts, driver concerns prompted a Valentine's Day strike by Lyft and Uber drivers over low pay and poor treatment. | | | |
| 3 | | Molson Coors ($TAP), the parent company of Coors Light and Miller Lite, posted robust fourth-quarter earnings, driven by a 9.3% growth in net sales for 2023. The return to profit was influenced by consumer preferences shifting away from AB InBev's Bud Light products, with a reported net income of $103.3M for the quarter, compared to a loss of $590.5M in the same period last year. More: - CEO Gavin Hattersley is confident in retaining market share gains, asserting that changes in the U.S. beer industry are lasting.
- The Canadian-American multinational drink and brewing company maintained its profits in the fourth quarter by increasing spending on marketing and administrative expenses by about 19%.
- During the quarter, the corporation spent more than $50M on marketing to attract new customers and retain current ones.
- Analysts differ on the longevity of Molson's gains from the Bud Light boycott, with TD Cowen's Robert Moskow optimistic about the company retaining most of the acquired share.
Zoom Out: - Molson Coors invested significantly in Super Bowl advertising, showcasing a commercial with LL Cool J and the iconic Coors Light train.
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| 4 | | DoorDash Inc. ($DASH) surpassed expectations in Q4 as total delivery orders rose 23% to 574 million, while the gross value of orders increased 22% to $17.6B, surpassing Wall Street estimates. The top U.S. food delivery service diversifies into various sectors, such as flowers, alcohol, and groceries, expands internationally, and develops an advertising arm. More: - DoorDash Inc. reported a 27% increase in Q4 revenue to $2.3B, slightly beating estimates, but its shares declined by up to 12% in after-hours trading, almost a two-year peak.
- In addition to increasing average order frequency, DoorDash witnessed a record number of monthly users, topping 37 million.
- The number of monthly active users for subscription services like Wolt+ and DashPass increased by almost 20% to over 18 million.
- Over 100,000 new merchants have joined DoorDash's marketplaces, and there are now over 150,000 non-restaurant vendors.
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| 5 | | January Consumer Price Index data reveals a notable disparity in the cost of dining out versus eating at home, with restaurant food prices rising by 5.1% yearly, compared to a 1.2% increase in grocery prices. The ongoing inflationary trend impacts Americans' daily lives, keeping prices significantly elevated compared to pre-pandemic levels. More: - While the inflation rate for food from restaurants and grocery stores has decreased, the difference in price rises between them has increased.
- The increasing demand for services, such as eating out, has increased wages and resulted in price increases.
- The cost of fresh produce, especially tomatoes, has increased significantly, whereas the cost of gammon, shelf-stable fish, and shellfish has decreased.
- Apples, lettuce, and eggs have had the most significant yearly price decreases, with eggs leading the pack at -28.6%.
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| 6 | | Japanese chip maker Renesas Electronics is set to acquire Altium for $5.91B, causing Altium shares to spike 31% to a record high. The deal values Altium at $44.46 per share, a 33.6% premium over its Wednesday closing price, and the acquisition is anticipated to be completed in the second half of 2024, subject to shareholder and regulatory approval. More: - The acquisition represents another case of an Australian technology firm transitioning into foreign ownership.
- Renesas intends to use cash on hand and bank borrowing to finance the transaction.
- For its most recent fiscal year, Altium reported sales of $263.3M, of which 77% was recurring revenue.
- Aram Mirkazemi, the CEO of Altium, will keep running the company as a Renesas subsidiary.
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- The U.K. has entered a recession ahead of a general election, experiencing a 0.3% GDP decline in Q4 2023, following a 0.1% contraction in the previous quarter, according to the Office for National Statistics.
- K2 Space, a Los Angeles-based startup, secured $50M in fresh funding as it endeavors to develop large satellites compatible with the emerging generation of massive rockets.
- Nike plans to reduce its workforce by over 1,600 jobs, constituting about 2% of its total employees, as part of cost-cutting measures amid declining demand for its footwear products.
- Continental intends to eliminate 7,150 jobs in its auto unit, exploring site consolidation in Germany amid challenges posed by the shift to electric vehicles and digital transformation.
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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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