Consumer Products and Services

Dollar Tree rejig is tale of haves and have nots

5 Jun 2024

The $26 bln discount chain’s main brand is attracting shoppers with deeper pockets, a similar pattern to Walmart. The more downmarket Family Dollar, acquired in a takeover battle a decade ago, is struggling. Cutting it loose could help shareholders uncover a bargain.

Salesforce 2.0 benefits will download soon enough

30 May 2024

The software developer lost nearly $50 bln of market value after its revenue outlook fell short of what analysts were expecting. Chasing growth, which has been around 20% for a decade, would be a bad idea, though. Boss Marc Benioff’s profitability quest is a solid update.

Royal Mail deal defies nationalist anti-M&A trend

29 May 2024

Czech tycoon Daniel Kretinsky agreed a $4.6 bln buyout of the UK postal service’s parent group. Britain’s likely next government seems OK with it despite the chance of jobs cuts and a breakup. As countries pull up the drawbridge on sensitive takeovers, there are still exceptions.

CEO pay is hidden factor in US relisting trend

29 May 2024

Plumbing supplier Ferguson almost doubled its boss’s compensation after moving to New York, while $55 bln CRH is reviewing its remuneration after switching too. It’s not something boards like to talk about. But investors might support US-style pay if it attracts the best talent.

Big Macs are pricing out American shoppers

23 May 2024

The driving force of the world’s largest economy, US consumers, may be buckling under higher costs on everything from lattes to burgers. In this Viewsroom podcast, Breakingviews columnists debate whether Main Street stalwarts like Starbucks or McDonald’s face a reckoning.

JAB’s Buffett impression is a work in progress

22 May 2024

The private European conglomerate, whose $50 bln portfolio includes Pret A Manger and Panera Bread, hired an executive for an insurance push. It makes sense as a funding source, as investors from Warren Buffett to KKR and Apollo proved. The snag is JAB’s patchy investment record.

Manufacturing’s re-heating leaves consumers cold

21 May 2024

Goods makers are ramping up production, with global new orders expanding for the third month in a row in April. That may lead to an industrial rebound following the services-driven post-pandemic recovery. But getting cash-poor consumers to buy the merchandise will be a challenge.

Nestle’s royalty rebuke is a sign of the times

20 May 2024

Shareholders rejected a proposal by the food giant’s Indian unit to hike fees paid to its $280 bln Swiss parent. Scrutiny over payments to foreign affiliates for brands and know-how will grow. Domestic owners are increasingly assertive. New Delhi will be watching closely too.

Buyers will keep springing for fancy Walmart wares

16 May 2024

Price increases hurt companies from Starbucks to McDonalds. But the $510 bln superstore, with thinner margins, is doing just fine. Decisions to pass cost increases to consumers might be to blame. With inflation still uncomfortably high, conscientious companies will benefit.

Oscar Mayer offers peek at how M&A sausage is made

16 May 2024

Kraft Heinz may offload the hot-dog and bologna maker as it refocuses on faster-growing fare in its pantry. The 140-year-old brand, potentially worth some $5 bln, already has been processed and repackaged by multiple owners. It’s largely a tale of changing financial tastes.

Czech tycoon gets a red-letter day, second class

16 May 2024

Daniel Kretinsky hiked his offer for the owner of Royal Mail to $4.4 bln. The board is minded to accept, even though International Distributions Services may be worth more. Yet IDS shares trade far below the bid, suggesting the UK government may find a way to block the deal.

Crypto’s virtuous cycle is more of a spiral

15 May 2024

Bitcoin ETF approvals have boosted the cryptocurrency, helping FTX customers recover funds and prompting firms like $44 bln Block to hoard more of the digital coins. But it also fuels a new type of speculation. With companies getting deeper into crypto, a new bubble is inflating.

ECB risks tripping over euro zone’s green shoots

14 May 2024

Europe’s economy is showing signs of life. Services are expanding faster than in the US. If consumers start spending, GDP could grow by more than the 0.6% forecast by the European Central Bank. That, though, would make it hard for policymakers to embark on a series of rate cuts.

China stock rally leaves Alibaba out in the cold

13 May 2024

The e-commerce giant’s shares are up less than 5% this year despite Tencent’s surging by a quarter. Boss Eddie Wu is promising stock buybacks and dividends. But investors are sceptical on Alibaba's growth prospects and whether it can unlock value after a botched restructuring.

Peloton buyout would involve both pain and gain

10 May 2024

The exercise company might struggle to get funding for an LBO given it has little cash flow. But if lenders believe a turnaround story, decent returns are possible. Plus Apple might be a ready buyer in a few years. For private equity firms, returns and exits are a welcome rarity.

EQT strikes a deal for post-Covid tech hangover

9 May 2024

Despite a 75% premium, the buyout shop’s take-private of IT consultancy Perficient values it on par with peers thanks to a sagging share price. The collapse of giddy Covid-era tech valuations and deals has lingered enough for some buyers to swoop back in without overstretching.

Arm encounters the AI bubble’s ups and downs

9 May 2024

The $110 bln chip designer reported record revenue in the fourth quarter, but investors disliked a less punchy outlook. Big Tech’s AI-fuelled data centre land grab is powering Arm’s revenue and margins. But its toppy valuation means any perceived upset gets punished.

Inditex’s golden era is coming to an end

3 May 2024

Asian disruptor Shein is threatening the $142 bln Zara owner’s fast-fashion crown with ultra-cheap wares. Dismissing the risk may threaten its market share. To protect the Spanish giant’s business, CEO Óscar García Maceiras has plenty of cash but no obvious M&A solution.

Unilever and Nestlé offer two flavours of India

2 May 2024

Weak rural demand ate into earnings at the $63 bln local unit of the Dove soap maker. By contrast, its smaller and more-richly valued Swiss rival grew profit thanks to a larger share of urban customers. The divergent fortunes point to the limits of the Indian consumer’s wallet.

Anti-obesity drugmakers savor pandemic leftovers

1 May 2024

The main obstacle to Eli Lilly and Novo Nordisk selling more weight-loss treatments is the ability to produce them. It turns out Covid-vaccine infrastructure has useful capacity. Quickly solving supply concerns gives both a shot at bigger slugs of the potential $100 bln market.