Consumer Products and Services

Italy loafer buyout is a bet on a higher price tag

3 Aug 2022

Two decades after listing shoemaker Tod’s, founder Diego Della Valle is taking it private at the same 40 euro share price. His hope, with partner LVMH, may be that the group is worth more split up than his 1.4 bln euro bid implies. Weary investors may take the cheap offer anyway.

Airbnb dodges inflationary roach motel

2 Aug 2022

The cost of hosting tourists – and being one – is rising. But not for Airbnb, which unlike Marriott and Hilton has managed to ensure price hikes remain other people’s problems. Meanwhile, travelers are willing to pay more, which cushions both the hosts and the company itself.

Capital Calls: Uber’s cash starts to flow

2 Aug 2022

Concise views on global finance: The $56 billion car-hailing service is growing rapidly and has started generating positive cash flow. It’s still overvalued, though.

Inflation drives a wedge between consumer giants

29 Jul 2022

P&G’s gross margin – a sign of pricing power – fell faster in the last quarter than rivals Unilever and Nestlé. Rising input costs are a threat; a bigger one is cheaper substitute products. That favors posh ice cream over, say, toilet paper, which leaves P&G relatively exposed.

Amazon’s brick-and-mortar vision is still blurry

28 Jul 2022

The $1.2 trln tech giant’s purchase of Whole Foods was meant to transform the grocery business. Instead, sales at physical stores have languished and without e-commerce profits, it’s hard to see how one benefits the other. Investors waiting for a revolution will keep waiting.

JetBlue buckles up for long, turbulent M&A flight

28 Jul 2022

After a near-four-month tussle, the U.S. budget airline clinched a $3.8 bln deal with rival Spirit. It stacks up if hoped-for extra profit results. The price is still high: If the merger fails – as it might – JetBlue may have to pay Spirit one-fifth of its market value.

Walmart inflation alarm, Unilever’s pricey remedy

28 Jul 2022

America’s largest private employer’s market value fell $35 bln amid a profit warning. In this Viewsroom podcast, Breakingviews columnists discuss how customers shifting to low-margin food is a harbinger for rivals. Also, the Dove maker is pushing quality versus quantity sales.

Meta Platforms, like wine, gets better with age

27 Jul 2022

Sure, advertising is under threat, Facebook’s user growth is slowing, and Mark Zuckerberg’s metaverse risks becoming a kind of corporate midlife crisis. But maturity brings financial advantages, like profitability. Even if revenue falls, Meta’s valuation is on solid ground.

Capital Calls: Spotify hums along

27 Jul 2022

Concise views on global finance: The music service led by Daniel Ek added more subscribers and revenue in the quarter outperforming Netflix and Twitter.

Unilever’s price-hike gamble pays off, for now

26 Jul 2022

The $120 bln maker of Knorr stock cubes lifted its guidance for sales growth after beating analyst forecasts. CEO Alan Jope is getting ahead on price rises. But with 2022 profitability at the bottom of his guide range and volumes falling, he can’t afford further inflation shocks.

Capital Calls: Shopify’s mea culpa

26 Jul 2022

Concise views on global finance: A memo from the e-commerce company’s CEO spells out how they miscalculated the "new normal."

Walmart’s pain will be problem shared widely

26 Jul 2022

The giant grocer lost about 10%, or $35 bln, of its market value after saying it would need to slash prices as customers rethink how to spend. The decline suggests more than just a fallow year. If the mighty retailer didn’t see this coming, there’s scant hope for smaller peers.

Twitter and Snap could be M&A birds of a feather

22 Jul 2022

Both social networks are luring new users, but each is too small to go to the mat with Alphabet or Meta over advertisers, who will get more discerning as the economy slows. With both companies similarly valued, a merger has merit – if Twitter can tie up loose ends with Elon Musk.

Fintech crash is an M&A opportunity for bold banks

21 Jul 2022

Financial technology groups like $8 bln Affirm, Klarna and Robinhood have plunged in value. Heavy losses and obstinate founders make them tough takeover targets. But lenders like Goldman Sachs could in theory run them more profitably – and boost their own growth in the process.

Netflix only partly dressed for ad auditions

19 Jul 2022

The $90 bln streaming service’s subscribers grew faster than expected, boosting revenue and sending shares up 7% after Tuesday’s close. But cash flow is still under pressure. As the ads business kicks in, Netflix can’t rely just on lazy users. Eyeballs on content matter more.

GE’s new branding is appropriately pedestrian

18 Jul 2022

It took six months and thousands of conversations to name the $69 bln firm’s post-split divisions: GE Healthcare, GE Aerospace, and – the creative bit – GE Vernova. The separation is an effort to help shareholder value. With those names, GE is setting expectations low.

Goldman Sachs revamp gets a pre-recession shove

18 Jul 2022

Earnings halved in the second quarter as deals dried up. Sprightly trading made up for it, but that won't last. Beneath the noise, Goldman's pivot to being a fee-and-interest machine is accelerating. That's good for its valuation - and for closing the gap with Morgan Stanley.

GSK spinoff boost may be as good as it gets

18 Jul 2022

The drugmaker’s Haleon consumer unit started trading at 40 bln pounds including debt – below the 50 bln pound offer it rejected from Unilever. The Sensodyne maker has hefty borrowings and two big investors eager to sell. But its valuation mostly prices in a healthier future.

GSK split gives CEO fresh M&A test

15 Jul 2022

Emma Walmsley is hiving off the $102 bln drugmaker’s consumer unit. What’s left is currently valued at a discount to pharma peers, despite fast-growing vaccines sales, due to loss of exclusivity on key drugs. Walmsley needs to show she can buy businesses as well as break them up.

New York City is losing its real estate swagger

14 Jul 2022

Global investors are eyeing alternative destinations, like Atlanta. Meanwhile high mortgage rates and market jitters are chilling Manhattan’s residential sales. The Big Apple relies on property for half of its taxes, and its economy is slowing to a crawl. A downturn could smart.