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| Here's your daily business briefing. - 🛍️ Macy's unveils growth plan after sales decline
- 🌿 Deep Dive: Weed sales surge, Dry January
- 🥩 Beyond Meat surges 100% on global sales
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Macy's ($M) announced a nearly 2% decrease in holiday quarter sales, reporting fourth-quarter adjusted earnings per share of $2.45, surpassing the expected $1.96, and revenue of $8.12B, slightly below the anticipated $8.15B. The company anticipates another year of stagnant sales, projecting net sales of $22.2B to $22.9B for the current fiscal year. More: - Tony Spring, the new CEO, wants to bring the company back to life by emphasizing better product offerings and increasing consumer value.
- Within the next three years, Macy's plans to add at least 30 Bluemercury stores and 15 new Bloomingdale stores to enhance its luxury offerings further.
- Macy's aims to close about 150 unproductive stores, invest in approximately 350 remaining locations, and expand its luxury goods offerings.
- Comparable sales at Macy's banner stores fell by 4.7%, whereas Bluemercury had a 2.3% increase, and Bloomingdale's witnessed a 1.6% fall.
- Macy's witnessed a decline in revenue from $8.26B in the year-ago period, with digital sales decreasing by 4% and brick-and-mortar sales remaining relatively flat.
- In the fourth quarter, Macy's announced a $71B loss, which it blamed on impairment and restructuring charges associated with closing stores.
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What the numbers say: In Q4 2023, North American beer sales are projected to decline by 1.7%, marking the first decrease since pandemic-related closures, potentially reducing revenue by about $150M across major brewers. The growing trend of reduced alcohol consumption among younger Americans since 2016 is anticipated to contribute to around 6% revenue growth for cannabis companies like Curaleaf, Green Thumb Industries, and Tilray in the first quarter, with notable sales increases in states like Oregon and Colorado. Relevance: The liquor industry faces challenges during Dry January as consumers shift toward cannabis consumption, especially with the potential impact on alcohol sales as more U.S. states consider legalizing recreational cannabis. This changing landscape is reshaping consumer behaviors, with a growing interest in cannabis-infused products and non-alcoholic alternatives to traditional alcoholic beverages. More data: Beer volumes in Canada have dropped approximately 2.6% annually since the legalization of recreational cannabis in 2018, signaling a shift in consumer preferences away from alcohol. The growing acceptance of cannabis, especially among younger generations, is driven by its perceived lower harm compared to alcohol, supported by its long-standing medical use and the increasing availability of cannabis-infused edibles. | | | |
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| 3 | | Beyond Meat Inc.'s ($BYND) stock surged to 106% in late trading after reporting higher-than-expected fourth-quarter sales. The company's Q4 revenue of $73.7M surpassed the average analyst estimate of $66.8M, driven by strong international sales that offset declines in the U.S. market. More: - CEO Ethan Brown presented the company's goals for profitability in 2024, which included cutting costs, changing prices, and introducing a new, healthier Beyond Burger.
- The company terminated the Beyond Meat Jerky brand, which was first introduced in a joint venture with PepsiCo Inc.
- In the U.S., food service sales decreased by 26% and retail sales by 23%, even with discounts.
- Globally, discounts helped drive a 22% increase in retail sales and a 34% increase in food service sales.
- The alternative protein maker's operational budget for 2023 was significantly cut to $107.8M from $320.2M in the prior year, resulting in $205.9M in cash and $1.1B in debt.
Zoom Out: | | | |
| 4 | | Millennials and Gen Zers are transforming wedding traditions, as revealed by a survey of over 9,000 couples in the U.S. conducted by The Knot. The study highlights a shift away from conventional practices, with declining trends including gender-divided wedding parties, matching attire, ceremonies in religious institutions, and the use of wedding hashtags. More: - Paperless communication is becoming more popular among couples; QR codes for wedding websites and RSVPs have increased by 18%.
- In 2023, kid-free receptions gained an 8% increase in popularity, while average wedding spending climbed to $35,000, up from $30,000 the previous year.
- Ed Sheeran's "Perfect" was supplanted by Elvis Presley's "Can't Help Falling In Love" as the leading choice for the first-song wedding dance, influenced by pop culture trends.
- The average guest count held steady at 115 people, with adjustments made to cope with escalating costs, including simplifying decor and eliminating gifts.
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| 5 | | Lowe's ($LOW) exceeded fourth-quarter earnings and revenue estimates, reporting earnings per share of $1.77 (surpassing the expected $1.68) and revenue of $18.60B (higher than the anticipated $18.45B). Additionally, the firm reported a decline in sales and anticipates reduced revenue for the current fiscal year; nonetheless, its shares rose 1.8%, reaching a 52-week high. More: - CEO Marvin Ellison observed a decline in DIY project demand due to a slower rate of home sales and a movement in consumer spending towards services.
- Comparable sales fell 6.2% YoY; the bad January weather and low demand for do-it-yourself projects were identified as contributory causes.
- During the fourth quarter, the business distributed $633M in dividends and repurchased $404M worth of shares.
- Lowe's will introduce a national DIY customer loyalty program in March to improve customer retention and customize incentives.
- For the current fiscal year, Lowe's expects overall sales of $84B to $85B, with a 2%–3% fall in comparable sales.
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| 6 | | According to a recent report by the Financial Times, an undisclosed source has revealed that Apple has abandoned its electric car project, "Project Titan," opting to prioritize generative artificial intelligence to diversify beyond the iPhone, which still represents around half of its global sales. The project, which spanned a decade and aimed to rival companies like Tesla and Rivian, was never officially confirmed by Apple.
More: - Apple's move aligns with its strategy to increase its market share in the generative AI space.
- The business has been increasing its R&D expenditure, which came close to $30B in the previous year.
- With a nearly 24% gain over the previous 12 months, Apple's shares increased by 0.8% after the news.
- Investors are keenly awaiting the introduction of new features on Apple's smartphones as the tech giant strives to stay competitive against rivals like Samsung and Google.
- Canceling the project means some of its 1,400 employees will move to Apple's AI projects, while others have 90 days to find another role in the company or be let go.
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- Sony is set to reduce its PlayStation workforce by 8%, involving 900 job cuts globally, affecting all regions of Sony Interactive Entertainment, with the closure of its in-house London studio, known for the singing video game "Singstar."
- Samsung introduced its latest wearable, the Galaxy Ring, featuring health-tracking capabilities such as heart rate and sleep monitoring, along with a readiness score for users, marking the company's entry into the smart ring category.
- A study indicates that leading AI chatbots are not yet prepared for election-related tasks, as questions posed to them often yield inaccurate answers, prompting tech companies and startups to focus on implementing safeguards.
- Nasdaq-listed tech company Grab, which recently achieved a quarterly profit for the first time, is focusing on organic growth and the integration of AI tools in its path to profitability.
- Visa and Mastercard have come to a historic $5B settlement, marking a pivotal moment for small business owners. If your business accepts Visa/MC, claim your share today*
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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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