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| Here's your daily business briefing. - 🏈 Amazon fuses football and shopping
- 👖 Deep Dive: Gap turns the tide with Old Navy revival
- 💻 Nvidia rides AI boom to record sales
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Shriram
p/Shriram | |
| 1 | | Amazon and the NFL are teaming up to stream the inaugural "Black Friday" game on Amazon Prime Video, leveraging the New York Jets vs. Miami Dolphins matchup to create a significant digital shopping event with exclusive deals and "shoppable ads." Including "shoppable ads" during the game lets viewers make instant purchases via QR codes, blending advertising with commerce. More: - To bridge the gap between holiday NFL games and Saturday college football, the NFL saw the Black Friday game as a chance to increase its visibility throughout the Thanksgiving weekend.
- Amazon's efforts, which combine retail and advertising revenue with Prime video content, align with its plan to increase revenue during the holiday season.
- As an extension of its $1.2B annual deal for "Thursday Night Football" spanning 11 years, Amazon has included a Black Friday game in its agreement, added after the initial season in 2022.
- A significant potential for Amazon to interact with consumers and establish brand touchpoints over the Christmas season is presented by the shoppable advertisements during the game.
- The NFL expects the Black Friday game to become a regular fixture on the calendar, supporting the league's ambitions to produce more stand-alone national contests.
Zoom Out: - Amazon faces growing competition from Chinese-affiliated e-commerce firms like Temu and Shein, which, despite longer delivery times, have successfully captured budget-conscious consumers in the U.S.
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What the numbers say: One of Gap's brands, Old Navy, showed a 1% rise in comparable-store sales against forecasts that indicated a 7.6% decline. Gap exceeded expectations with a 2% decline in comparable sales for the quarter ending Oct. 28, reporting net income of $218M, over three times the estimated figure, and an improved gross margin of 41.3%, up 3.9 percentage points from the previous year. Relevance: Gap's rebound under CEO Richard Dickson, marked by Old Navy's success with a women's marketing campaign and on-trend products, is evident in the improved gross margin, reflecting better profitability and a more favorable product assortment. However, the recovery has been uneven, with Athleta and Banana Republic facing challenges. More data: Gap's trimmed inventory by 22%, minimizing the need for discounts, and with a strengthened balance sheet holding $1.4B in cash, nearly double from a year ago, its shares are considered cheap at 0.39 times forward 12-month revenue, a 43% discount to its 10-year average. | | | |
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| 3 | | Nvidia's fiscal third-quarter sales hit a record $18.1B, outpacing expectations, and profits surged to $9.2B from $680M a year ago. The strong performance is credited to a shift in computing trends, particularly the rise of generative AI like OpenAI's ChatGPT, with anticipated sales for the current quarter exceeding predictions at around $20B. More: - Late last year saw the beginnings of the generative AI boom, which increased demand for Nvidia's chips and resulted in a scarcity.
- Nvidia intends to fulfill the expanding AI prospects by expanding chip supply and accelerating the release of new chip types.
- Despite the competition, Nvidia's sales of AI chips increased to over $14.51B in the most recent quarter from roughly $3.8B in the previous year.
- One of the difficulties is that the U.S. does not allow the sale of sophisticated chips to China; Nvidia is developing new chip lines specifically for the Chinese market.
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| 4 | | Nordstrom reports a nearly 7% YoY decline in sales, citing weaker demand and budget-pressed consumers, and reiterates its full-year sales outlook with an expected revenue decline of 4% to 6%. The fiscal third-quarter net income rises to $67M, or $0.41 per share, compared to a year-ago loss of $20M, or $0.13, with adjusted earnings per share at $0.25, surpassing the expected $0.13, while revenue comes in at $3.32B, missing the expected $3.40B. More: - After three years of sales at or below pre-pandemic levels, Nordstrom focuses on Nordstrom Rack and merchandise revamps to achieve growth.
- Improved trends in categories, including beauty, accessories, and activewear, have countered the 11.3% decline in digital sales, which are attributed to soft customer visits.
- Eleven new Rack stores have opened, indicating that Nordstrom Rack has improved during the quarter.
- Amidst fluctuations in inflation, elevated interest rates, and the restart of student loan repayments, the corporation continues to exercise caution regarding consumer spending.
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| 6 | | United Airlines is exploring using passenger data for targeted ads on its in-flight entertainment system and booking app. The goal is to enhance United's advertising business, utilizing its substantial customer base of 148 million U.S. passengers, with personalized ads designed around individual preferences and travel history to suggest relevant products or services. More: - This program continues a trend in which businesses that haven't always been into advertising—like Walmart, Uber, Instacart, and Home Depot—use consumer data to create tailored advertisements.
- Data from retail stores with access to customer information indicates that U.S. marketers would likely spend $46.4B on "retail media" advertising this year.
- Marriott has introduced an ad business, enabling advertisers to purchase personalized ads across various channels, including hotel room TVs, the Marriott app, and emails, using customer data.
- Executives at United are planning to provide opt-out alternatives to comply with privacy laws, but they are cautious about deploying personalized advertisements to make sure they won't irritate or worry travelers.
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| 7 | | Quick Hits: - Raising capital? Fundingstack gives you fundraising super powers. Access a DB of 200k investors + CRM, pitch hosting, investor updates, and more. Sign up here to get priority access.*
- Ford is reducing plans for a $3.5B battery plant in Michigan due to a slower-than-expected shift to electric vehicles, rising labor costs, and cost-cutting measures.
- The average interest rate on the most popular U.S. home loan dropped to its lowest level in two months last week, influenced by declining Treasury market yields amid easing inflation and economic softening.
- Popeyes is introducing five new permanent chicken wing flavors, including Honey BBQ, Roasted Garlic Parmesan, Signature Hot, Ghost Pepper, and Sweet' N Spicy, building on the success of its popular chicken sandwich.
- Last week, Timber Pharmaceuticals filed for Chapter 11 bankruptcy protection after LEO Pharma terminated a merger agreement that lacked sufficient stockholder support.
- Experience exciting new stories of innovation from prominent brands like LEGO, Ben and Jerry's, Delta, and VMware on Season 2 of Adobe's The Power of Teamwork podcast.*
*This is sponsored content. | | | |
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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 Vibha Chapparike | |
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