Attention retail shoppers: Walmart is different 15 Aug 2024 The $600 bln company’s sunny financial results and outlook shined brightly, lifting stock prices across an industry darkened by spending and recession fears. Its size and breadth make it a highly imperfect bellwether, however. There are better guides for consumption trends.
Pringles’ $36 bln deal comes with a pinch of salt 14 Aug 2024 Candy maker Mars is acquiring snack rival Kellanova for $83.50 per share in an all-cash deal. Strategically it’s a fit: adding potato chips to M&M’s rounds out the buyer’s offerings. But a whopping $29 bln financing and a hostile regulatory environment add a dose of uncertainty.
Hong Kong faces China’s other consumption slump 14 Aug 2024 Spending is weak on the mainland, but retail sales in the financial hub have fallen for four months in a row. That's due to a double whammy of locals and tourists buying less. The city's once resilient landlords are cutting dividends - an ominous sign of more pain to come.
Starbucks CEO starts with venti expectations 13 Aug 2024 The coffee chain added over $20 bln in market value as it named former Chipotle chief Brian Niccol as its new boss. Niccol has useful skills, from digital marketing to steering founder-led companies. Starbucks is bigger, though, as are the personalities he will have to navigate.
Starbucks has too many baristas in the boardroom 12 Aug 2024 The $90 bln coffee chain’s US sales are down as growth in China flags. Add a newish CEO and it seems a tasty brew for rabble-rousers like Elliott. But the complex interplay between former boss Howard Schultz, angsty labor reps and even more activists threatens a bitter finish.
Apple loses China price battle, but will win war 12 Aug 2024 Big discounts by Huawei and other local rivals have eaten into the iPhone maker’s market share. Boss Tim Cook is fighting back, to preserve nearly a fifth of revenue. In a region that often beguiles tech outfits, the $3 trln company’s resilience is impressive – and sustainable.
Pringles would make a tasty M&A bite for Mars 5 Aug 2024 Recession fears and weight-loss drugs loom over indulgent snack makers. Yet the M&Ms owner is mulling a bid for $24 bln Kellanova. Even a 30% premium would only match rivals’ valuations; so long as cost savings materialize, taking a bigger piece of a tougher market makes sense.
L’Oréal’s tardy skin care facelift may backfire 5 Aug 2024 After sitting out its IPO, the cosmetics giant is buying 10% of $19 bln dermatology specialist Galderma, which it sold in 2014. The Swiss firm’s fast-growing injectable business is attractive. Yet the move risks making a potential full takeover overly expensive.
China’s luxury push paves way for sin tax rejig 5 Aug 2024 Beijing unveiled a 20-point plan targeting consumption of things like yachts and cruise ships. It looks underwhelming as spending remains anaemic in the $17 trln economy. Yet local governments have incentive to step up: a potential luxury goods and services tax windfall.
Volkswagen’s restart faces further roadblocks 1 Aug 2024 The bloated $56 bln German carmaker is cutting costs further, as it tries to hit bold profit targets. CEO Oliver Blume’s 6.3% operating margin is better than it looks. But Chinese competition and stringent carbon targets make for a tricky road ahead.
China looks to the little guy for spending boost 31 Jul 2024 Beijing wants to raise wages for low- and middle-income groups to lift consumption. Combined with higher taxes on the wealthy, that's wise. Yet those policies are unlikely to deliver immediate growth. Officials will have to lean on fiscal expansion to hit their GDP target.
Diageo’s succession hangover has fuzzy duration 30 Jul 2024 The $67 bln drinkmaker’s 2023 promotion of CEO Debra Crew was seamless. But Diageo’s share price has slumped since, and some of the problems are self-inflicted. Crew’s future may hinge on a rebound of US consumer sentiment, rather than any bold change of strategy.
Posh UK wealth group flaunts takeover credentials 30 Jul 2024 St. James’s Place is drawing in new client money and cutting costs. That eases concerns that well-heeled Brits would abandon its high-priced service after a recent fee overhaul. Even after a 25% stock pop, the 3.8 bln pound group is cheap. A takeover or buyout looks plausible.
Rose-colored Ray-Bans shade brand rehab realities 26 Jul 2024 EssilorLuxottica is paying $1.5 bln for Supreme, whose cachet suffered under Vans owner VF. Streetwear strays from the buyer’s eyewear expertise and the imputed return on capital looks modest. American Apparel also serves as one of many cautionary tales on fashion after it frays.
Hyundai’s extra gear is short on staying power 26 Jul 2024 Earnings at Korea’s largest carmaker jumped 23% last quarter, bucking a trend that had rivals from Tesla to GM to Nissan stalling. Yet investors have wiped almost 6% off the share price. Robust hybrid and SUV sales may not offer lasting protection as consumer confidence falters.
Consumer titans have Covid-era issue, in reverse 26 Jul 2024 In the pandemic, Nestlé and Unilever’s higher prices were accompanied by falling sales. Now they are tempting consumers to buy more products, but prices are harder to budge. One issue hasn’t changed: the giants’ vulnerability to cheaper and healthier eating habits.
Carmakers drive efficiency hopes into a ditch 25 Jul 2024 The shares of carmakers Nissan and Stellantis fell around 7% after weak results. The tough US market is hurting sales, erodes the European group’s high margins and hinders its Japanese peer’s turnaround. Unsold cars and cautious consumers mean any recovery will take time.
UMG pays steep price for platform addiction 25 Jul 2024 The $42 bln music group’s shares sank by more than 25% on Thursday, falling below their 2021 IPO. Lower-than-expected growth in subscription revenues underlines the company’s painful dependence on pricing decisions made by big players like Amazon or Apple.
Ford and GM cushioned by economic safety features 24 Jul 2024 Detroit’s $100 bln automaking duo hit some bumps, but they’re mostly humming along. Even so, delinquent loans and growing inventories have spooked investors about vehicle prices. Bloated dealer profit, ageing cars and lower borrowing costs should smooth out the road ahead.
Reckitt gives weak scrub to valuation stain 24 Jul 2024 The $40 bln Dettol maker is selling cleaning brands and pledging to exit its baby milk unit. The result should be a leaner company and less depressed share price. But the lack of a clear timeline limits the benefit and leaves investors fretting over infant formula litigation.