Consumer Products and Services

Capital Calls: DraftKings, Shake Shack, Fanatics

18 Feb 2022

Concise views on global finance: The online gambling firm predicts fast growth but heavy losses; the U.S. burger chain had disappointing earnings yet its valuation is sky-high; the sports merchandiser teams up with Jay-Z to buy a streetwear firm for a song.

Walmart’s trusty talent is less use in new domain

17 Feb 2022

The $375 bln company’s stronger-than-expected sales and profit are testament to its ability to manage inflation and supply chain pressures. A push into advertising and subscriptions is taking the retailer closer to Amazon’s turf. It will be harder to shine in this territory.

Reckitt baby food is problem child best kept home

17 Feb 2022

Offloading the sluggish Enfamil unit would boost the Nurofen maker’s growth. But rivals Nestlé or Abbott would face regulatory hurdles, while a buyout group would probably pay less than the unit’s 5.4 bln pound book value. CEO Laxman Narasimhan is better off holding on.

Capital Calls: Continental split

17 Feb 2022

Concise views on global finance: The $20 bln German auto supplier is eyeing a four-way separation, according to a report.

Paramount’s streaming revamp is an uphill struggle

16 Feb 2022

ViacomCBS is rebranding to emphasize the media group’s Paramount+ service, which has 33 mln subscribers. Content costs are ballooning just as investors grow skittish about leader Netflix’s growth. A 20% share price drop on Wednesday widens the valuation gap with larger rivals.

Rich stocks have yet to feel cost-of-living crisis

16 Feb 2022

Rising inflation and higher energy bills are hitting consumers. UK punters in particular look vulnerable, given uneven savings and tax hikes. Mass belt-tightening could mean fewer holidays and less spending on luxuries like streaming, hurting companies from Ryanair to BT.

The Exchange: Consumers have the retail whip hand

15 Feb 2022

From Saks Fifth Avenue to Target, U.S. retailers are under intense pressure to change their businesses to meet consumers’ needs. Alix Partners’ Joel Bines tells Jennifer Saba it’s about more than just a shift in shopping habits. He argues that consumers now hold all the power.

Capital Calls: Crypto hangs up Super Bowl placard

11 Feb 2022

Concise views on global finance: Cryptocurrency firms have lined up for ads on the U.S. football championship, much like dotcoms did in 2000. They are paying up to $7 mln per spot, or twice as much, adjusted for inflation.

Viewsroom: Spotify, Peloton and failed chip deals

10 Feb 2022

Neil Young’s podcast protests have shone a light on a potential flaw in Spotify’s business model, says Liam Proud. Peloton highlights the danger of giving company founders too much voting power, Rob Cyran argues. And semiconductor M&A gives global antitrust regulators agita.

Capital Calls: ABB’s car chargers, Airport M&A

10 Feb 2022

Concise views on global finance: The Swiss engineering group’s listing plans come at an unfortunate moment; Britain’s John Menzies takes a risk with rejection of “opportunistic” approach from Kuwaiti air services group NAS.

Unilever’s Plan B invites unflattering comparisons

10 Feb 2022

After a failed 50 bln pound bid for GSK’s consumer arm, CEO Alan Jope intends to focus on more promising brands in personal care and beauty. That unit’s revenue grew 4% last year, lagging glossier rivals like L’Oréal. Higher sales will also come at the expense of lower margins.

Yum China’s strategic recipe adds too much spice

10 Feb 2022

The KFC and Pizza Hut owner plans to open as many as 1,200 new stores across the country despite a 93% fall in quarterly profit. Starbucks is similarly confident. Both may be underestimating the extent of consumer weakness. Hotpot chain Haidilao provides a cautionary tale.

Disney closes gap with Netflix in value, not risk

9 Feb 2022

The Magic Kingdom’s streaming service Disney+ now has 130 mln subscribers, narrowing the gulf with its bigger rival. Investors value the two firms’ earnings on a similar multiple. Yet even though Netflix is now a smaller company by market value, it’s Disney that’s the greater gamble.

Toyota’s armour plating takes some ill-timed dents

9 Feb 2022

Supply-chain crises have caught up with the Japanese marque. Now it’s cutting production as quarterly earnings fall 21%. It’s the most profitable of peers, but Honda, Ford and GM are slated to grow faster and Toyota lags on electric cars. Boss Akio Toyoda needs to drive hard.

Peloton gear-change starts with stock, not CEO

8 Feb 2022

Drafting in ex-Spotify executive Barry McCarthy may help the fitness company tone up. But founder John Foley’s voting power limits Peloton’s options. Other firms fared better after ditching supervoting stock. Foley could revive Peloton and his fortune by doing likewise.

Amazon could get Peloton at garage-sale price

7 Feb 2022

The workout firm’s shares surged after suggestions the $1.6 trln e-commerce giant may buy it. Peloton isn’t an obvious fit, but the ability to sell subscriptions to even a sliver of Amazon’s user base is valuable. With the right regime, Peloton’s value could conceivably double.

Facebook $250 bln slump punctures antitrust case

7 Feb 2022

That’s how much Mark Zuckerberg’s firm Meta Platforms lost in value after growth stalled. Competition from TikTok specifically is getting tough, but U.S. antitrust regulators who are fighting Facebook have said the Chinese-owned app isn’t a rival. The market begs to differ.

Clorox shrinks in violent profit spin-cycle

4 Feb 2022

The bleach-maker is now worth less than it was before the pandemic. A boost to sales of wipes and bleach is being negated by rising costs, and overzealous production puts Clorox in a worse place than where it started. It won’t be the only one left hanging on the clothesline.

Snap investors have too many stars in their eyes

4 Feb 2022

The messaging app’s shares soared 50% even though it warned ad privacy changes could hit revenue – something that clobbered Meta Platforms. They share risks, including an ascendant TikTok. Snap looks extra pricey given it lacks peers’ ability to hurl money at new problems.

Amazon has a unique inflation problem

3 Feb 2022

Like peers, the $1.4 trillion giant dominates markets and has businesses that are growing rapidly. Yet Amazon has about 10 times as many workers, and a vast network of infrastructure vulnerable to rising prices. Yet it’s valued as if it does not.