Consumer Products and Services

FedEx packages economic pain with bad judgement

16 Sep 2022

A dire profit warning erased nearly a quarter of the company’s market value. The delivery titan sits at the nexus of many secular problems, including changing consumer patterns, inflation and logistical snarls. But UPS’s performance suggests such challenges can be handled better.

Server landlords have plenty more rents to extract

16 Sep 2022

Short-seller Jim Chanos says data centers are overvalued, but buyout shops keep chasing firms like London-based Global Switch with bids over 30 times EBITDA. Tech giants are a threat. But as long as demand outpaces supply and cheap financing is available, the party can roll on.

Starbucks’s high-octane plan has warm impact

14 Sep 2022

The $101 bln coffee firm spent a chunk of its investor day discussing solutions for its restless workforce. They are sure to give incoming CEO Laxman Narasimhan a challenge. But revenue is growing rapidly thanks to automation. Pretty soon, employees won’t have the same effect.

Peloton pack leader has clear road to accelerate

13 Sep 2022

Founder John Foley has exited the $3 bln exercise company, leaving an overhaul in the hands of CEO Barry McCarthy. The subscription business is showing sparks and Peloton is on the path to making cash – again. McCarthy may yet fail, but at least it will be on his terms.

Grocers’ crisis defences look shaky

13 Sep 2022

Morrisons lost its top-four UK position to Aldi, while Ocado’s online sales are under pressure. Competition from discounters means supermarkets have less scope to raise prices and protect margins than in past slowdowns. The bleak outlook has yet to reach stock valuations.

Capital Calls: T-Mobile US transmits clear signal

9 Sep 2022

Concise views on global finance: The telecom carrier is planning a $14 bln buyback program as it beats rivals in shareholder return.

Starbucks CEO brings warm skills to hot problems

2 Sep 2022

The $98 bln coffee chain named Reckitt boss Laxman Narasimhan as its next leader. He’s expected to deliver more and faster Frappuccinos with a restless workforce and rising costs. Narasimhan’s track record is promising. But with Howard Schultz still around, he is under the gun.

Capital Calls: Lululemon stretches inventory logic

2 Sep 2022

Concise views on global finance: The $41 bln company raised annual profit and revenue forecasts, but is a little too relaxed about its growing stockpiles of yoga gear.

China’s test kit stock bubble loses air

2 Sep 2022

Officials have tested citizens for Covid-19 nearly 12 billion times, blowing up sales at firms like Daan Gene, where profit popped 130% in the first half. But rising capacity, price caps and payment delays are making investors anxious. This corporate welfare party is winding down.

CEO exit gives Reckitt suitors a narrow window

1 Sep 2022

Shares in the $55 bln Durex condom maker fell amid Laxman Narasimhan’s sudden departure. Naysayers can cite Reckitt’s half-done rejig and inflation risks. Yet with a valuation lagging the likes of Colgate Palmolive, a bidder could point to other positives to justify a swoop.

Water crisis investing is glass not even half-full

1 Sep 2022

Companies like Danone, Ecolab and Coke paraded some smart, profitable ways to adapt to flood and scarcity at an annual Stockholm confab. But those are often just pilot projects. And funding from VCs to governments is scarce. Preparing for global warming requires opening the taps.

Global economy can thank U.S. consumers

30 Aug 2022

After the 2008 financial crisis, China helped prop up the world. Now, it’s the United States doing the heavy lifting. Despite lockdowns and war, shoppers are buying more foreign goods while booming visits to Europe propel travel close to the sector’s 10% global GDP contribution.

Zendesk’s deal ping-pong favors caution

29 Aug 2022

Hedge fund Light Street is using Icahn-esque tactics to fight the software maker’s $10 bln LBO. It’s pitched as a way for public investors to take part in a turnaround. But financing, governance, growth, and cost uncertainty make the plans look like a pipe dream.

Moderna patent fight about feathers, not goose

29 Aug 2022

The $53 bln biotech firm says Pfizer’s Covid-19 vaccine uses its intellectual property. The drug may bring in $30 bln this year, so it’s potentially a giant suit. Moderna’s direct claim is probably tiny. But mRNA technology is its lifeblood and worth fighting to protect.

Powell gives markets tough medicine they needed

26 Aug 2022

The Fed chair’s Jackson Hole speech came with a blunt message: The U.S. central bank will tame inflation by hook or by crook. That’s a dose of reality for investors searching for dovishness. It’s convincing households and businesses that really matters now.

Richemont finds tolerable way to refocus

24 Aug 2022

The $60 bln Cartier owner has finally sold part of e-commerce unit YNAP to Farfetch. Richemont gets a lower price than it could have last year, but keeps online presence via payment in its U.S.-listed rival’s shares. And cutting its stake helps it focus on more promising sectors.

Chinese consumers catch long-Covid mindset

24 Aug 2022

Results from retailers like JD and Xiaomi show shoppers eschewing discretionary items like smartphones, dashing hopes of a quick rebound. Covid fears and economic malaise could be entrenching a pessimistic reflex. Japan’s example shows such attitudes can take decades to change.

Capital Calls: Food fight

23 Aug 2022

Concise views on global finance: Retailers like E-Mart are cutting food prices amid surging costs, risking a sector-wide race to the bottom.

Once people ditch oil, they won’t come back

22 Aug 2022

The 1973 crisis sent oil prices spiraling and knocked U.S. demand onto a permanently lower trajectory as economic growth became less energy intensive. High prices three decades later caused gasoline demand to stall entirely. This time around the result will be lasting shrinkage.

Musk’s Twitter subpoena storm gets everyone wet

19 Aug 2022

The Tesla boss is dragging Salesforce and others into his $44 bln M&A fight against the social network. It could reveal embarrassing communications. Twitter too has legal requests to Musk co-investors like Larry Ellison. That’s more incentive to settle and part the clouds.