ReportWire

Tag: Consumer Goods

  • Nike shares dive, company eyes $2 billion in cost cuts amid 'softer' outlook

    Nike shares dive, company eyes $2 billion in cost cuts amid 'softer' outlook

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    Shares of Nike Inc. tumbled after hours Thursday after the athletic-gear giant warned of a “softer second-half revenue outlook” on its quarterly earnings call, and said it is targeting up to $2 billion in cost cuts over the next three years as it looks to shed management and focus on women customers and its Jordan brand.

    Nike
    NKE,
    +0.91%
    said that the savings could come from simplifying its product selection and using more automation and technology. But the athletic-gear giant has also reportedly begun to lay workers off, and said it expected to book pre-tax restructuring charges of around $400 million to $450 million, much of it in the company’s fiscal third quarter, “primarily associated with employee-severance costs.”

    Nike did not immediately respond to questions about job cuts at the company, or how many staff have been or could be laid off. But on the company’s earnings call, management said its plans included “reducing management layers.”

    In Nike’s earnings release, Chief Financial Officer Matthew Friend said the company’s fiscal second quarter — in which per-share profit beat expectations while sales were roughly in line — marked “a turning point in driving more-profitable growth.”

    But investors appeared skeptical after hours on Thursday, as shares slid more than 11%.

    Nike announced the cost-cutting drive as clothing and shoe brands try to steer through weaker demand overall and a broader price-cutting battle in retail stores for inflation-battered customers. Those customers have had to set aside more money to cover the costs of ever-pricier essential goods, at the expense of things like sportswear and sneakers.

    “We are seeing indications of more cautious consumer behavior around the world in an uneven macro environment,” Friend said during the call.

    Nike executives said consumer demand was strong through the back-to-school season, Black Friday and Cyber Monday, but lagged in between. Demand wobbled online, and in China and Europe.

    They also said that the money they planned to save would be reinvested into helping Nike become more nimble and more responsive to consumer preferences, after years of shifting away from selling shoes and gear through traditional retail chains in favor of doing business through its own stores and e-commerce channels. They added that those efforts “added complexity and inefficiencies” as competition grew steeper.

    Chief Executive John Donahoe said on the call that the Nike-brand women’s segment was already a $9 billion business. But he said new products — like bras, leggings, retro-themed running shoes and other offerings that span both sports and lifestyle — would help draw more women customers.

    Within the Jordan category, Donahoe cited opportunities beyond basketball sneakers. Clothing and golf-, soccer- and football-related products, along with offerings targeted toward women and children, would also help drive growth, he said.

    But for the rest of its fiscal year, Nike’s expectations were dimmer. The company said it forecasted “slightly negative” sales growth for its fiscal third quarter. For its fourth quarter, executives expect low-single-digits sales gains. And they said they now anticipate Nike’s full-year sales to increase around 1%, compared to an outlook in September for mid-single-digits gains.

    In its fiscal second quarter, which ended on Nov. 30, Nike reported net income in the period of $1.58 billion, or $1.03 a share, compared with $1.33 billion, or 85 cents a share, in the same quarter last year. Revenue rose 1% year over year, to $13.4 billion.

    Analysts polled by FactSet expected adjusted earnings per share of 84 cents, on sales of $13.39 billion.

    Gross margin rose to 44.6%, helped by price increases and lower costs for ocean-freight shipping.

    Outlooks this year from athletic-gear retailers like Foot Locker Inc.
    FL,
    +1.89%
    and Dick’s Sporting Goods Inc.
    DKS,
    +0.78%
    have also been cautious, and Nike has faced competition from the likes of Adidas
    ADDYY,
    +1.01%
    and On Running
    ONON,
    -1.05%    .

    Nike management also said in their previous earnings call in September that they aimed to do more to attract women and running-shoe customers. However, they noted that demand for the company’s products remained solid and they were “cautiously planning for modest markdown improvements for the balance of the year,” as the company tightens up its supplies of sneakers and clothing in stock.

    On Thursday’s call, executives said that demand for higher-priced products had been “resilient,” and that they didn’t have to cut prices as much as their rivals. And they said new releases — like the Sabrina 1 and Luka 2 sneakers — were the best way to stand out in a sea of discounts.

    “We know in an environment like this, when the consumer is under pressure and the promotional activity is higher, that it’s newness and innovation which causes the consumer to act,” Friend said.

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  • Nike Beats Profit Expectations, Sees $2 Billion of Cost Cuts

    Nike Beats Profit Expectations, Sees $2 Billion of Cost Cuts

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    Nike beat expectations for second-quarter profit and announced a $2 billion cost-cutting plan, as it sees sales softening for the second half of its fiscal year.

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  • 'Smidcap' companies are becoming a big deal. Here's a look at some of the best.

    'Smidcap' companies are becoming a big deal. Here's a look at some of the best.

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    The stocks of long-neglected small companies are finally showing signs of life as the market rally broadens. But these tiny companies still remain vastly undervalued. So, they are one of the best buys in the stock market right now.

    Small- and medium-cap companies, or smidcaps, have not been this cheap since the Great Financial Crisis 15 years ago. “Smidcaps relative to large caps look very attractive,” says says portfolio manager Aram Green, at the ClearBridge Select Fund LBFIX, which specializes in this space.  “Over the long term you will be rewarded.” 

    Green is worth listening to because he is one of the better fund managers in the smidcap arena. ClearBridge Select beats both its midcap growth category and Morningstar U.S. midcap growth index over the past five- and 10 years, says Morningstar Direct. This is no easy feat, in a mutual fund world where so many funds lag their benchmarks. 

    The timing for smidcap outperformance seems about right, since these stocks do well coming out of recessions. Technically, we have not recently had a recession. But there was an economic slowdown in the first half of the year, and the U.S. did have an earnings recession earlier this year. So that may count. 

    To get smidcap exposure, consider the funds of outperforming managers like Green, and if you want to throw in some individual stocks, Green is a great guide on how to find the best names in this space. 

    I recently caught up with him to see what we can learn about analyzing smidcaps. Below are four tactics that contribute to his fund’s outperformance, with nine company examples to consider.  

    1. Look for an entrepreneurial mindset: Green’s background gives him an edge in investing. He’s an entrepreneur who co-founded a software company called iCollege in 1997. It was bought out by BlackBoard in 2001. He knows how to understand innovative trends, identify a good idea, secure capital and quickly ramp up a business. This experience gives him a “private market mindset” that helps him pick stocks to this day. 

    “Founder-run companies regularly outperform.”

    Green looks for managers with an entrepreneurial mindset. You can glean this from company calls and filings, but it helps a lot to meet management — something most individual investors cannot do. But Green offers a shortcut, one which I regularly use, as well. Look for companies that are run by founders. This will give you exposure to managers with entrepreneurial spirit. 

    Here, Green cites the marketing software company HubSpot
    HUBS,
    +0.79%    ,
    a 1.9% fund position as of the end of the third quarter. It was founded by Massachusetts Institute of Technology college buddies Brian Halligan and Dharmesh Shah. They’re on the company’s board, and Shah is chief technology officer. 

    Academic studies confirm founder-run companies regularly outperform. My guess is this is because many founders never lose the entrepreneurial spirit, no matter how easy it would be to quit and sip Mai Tai’s on a beach after making a bundle.  

    In the private market, Green cites Databricks, a data management and analytics company with an AI angle. This competitor of Snowflake
    SNOW,
    -0.92%
    is likely to go public in 2024. If you feel like an outsider because you lack access to private market investing, note that Green says he typically buys more exposure to private companies on the initial public offering (IPO), and then in the market.  “We like to spend time with them when they are private so we can pounce when they are public,” Green says.

    2. Look for organic growth: When companies make acquisitions their stocks often decline, and for good reason. Managers make mistakes in acquisitions because they overestimate “synergies.” Or they get wrapped up in ego-enhancing empire building. 

    “We favor entrepreneurial management teams that do not make a lot of acquisitions to grow, but use their resources to develop new products to keep extending the runway,” says Green. 

    Here, he cites ServiceNow
    NOW,
    +2.62%    ,
    which has grown by “extending the runway” with new offerings developed internally. It started off supporting information technology service desks, and has expanded into operations management of servers and security, onboarding employees, data analytics, and software that powers 911 emergency call systems. Green obviously thinks there is a lot more upside to come, given that this is an overweight position, at 4.6% of the portfolio (the fund’s biggest holding).

    Green also puts the “Amazon.com of Latin America” MercadoLibre
    MELI,
    +0.17%
    in this category, because it continues to expand geographically and in areas such as logistics and payment systems. “They have really morphed into a fintech company,” Green says. He puts HubSpot and the marketing software company Klaviyo
    KVYO,
    -5.73%
    in this category, too. 

    3. Look for differentiated business models: Green likes companies with offerings that are special and different. That means they’ll take market share, and face minimal competition. They’ll also enjoy pricing power. “This leads to high margins. You don’t have someone beating you up on price,” he says. 

    Green cites the decking company Trex
    TREX,
    +0.10%    ,
    which offers composite decking and railing made from recycled materials. This gives it an eco-friendly allure. Compared to wood, composite material lasts longer and requires less maintenance. It costs more up front but less over the long term. Says Green: “The alternative decking market has taken about 20% of the market and that can get to 50%.”

    Of course, entrepreneurs notice success, and try to imitate it. That’s a risk here. But Trex has an edge in its understanding of how to make the composite material. It has a strong brand. And it is building relationships with big-box retailers Home Depot and Lowe’s. These qualities may keep competitors at bay. 

    4. Put some ballast in your portfolio: Green likes to keep the fund’s portfolio balanced by sector, size, and business dynamic. So the portfolio includes the food distributor Performance Food Group
    PFGC,
    -1.69%    .
    The company is posting mid-single digit sale growth, expanding market share and paying down debt. Energy drinks company Monster
    MNST,
    -0.85%
    also offers ballast. Monster’s popular product line up helps the company to take share and enjoy pricing power, Green says.

    It’s admittedly unusual to see a food companies in a portfolio loaded with high-growth tech innovators. But for Green, it’s all part of the game plan. “Rapid growth, disrupting businesses are not going to work year in year out. There are times they fall out of favor, like 2022. So, having that balance is important because it keeps you invested in the equity market.” 

    In other words, keeping some ballast means you’re less likely to get shaken out by sharp declines in high-growth and high-beta tech innovators when trouble strikes the market.

    Michael Brush is a columnist for MarketWatch. At the time of publication, he owned AMZN, TSLA and MELI. Brush has suggested AMZN, TSLA, NOW, MELI, HD and LOW in his stock newsletter, Brush Up on Stocks. Follow him on X @mbrushstocks

    More: Nvidia, Disney and Tesla are among 2023’s buzziest stocks. Can they continue to sizzle in 2024?

    Also read: Presidential election years like 2024 are usually winners for U.S. stocks

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  • Activision Blizzard to pay $55 million to settle California civil-rights lawsuit

    Activision Blizzard to pay $55 million to settle California civil-rights lawsuit

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    Videogame maker Activision Blizzard has agreed to pay nearly $55 million to settle a California civil-rights lawsuit brought over complaints of sexual harassment, discrimination and pay disparities by women employees that helped trigger the company’s acquisition by Microsoft.

    The settlement, announced by the California Civil Rights Department on Friday evening, resolves the lawsuit filed against the “Call of Duty” videogame studio by the agency in 2021 over claims that it “discriminated against women at the company, including by denying promotion opportunities and paying them less than men for doing substantially similar work,” CRD said.

    The agreement, subject to court approval, will see Activision pay nearly $46 million into a settlement fund dedicated to compensating women employees and contract workers at the company, plus more than $9 million in attorneys’ fees and costs. Additionally, Activision will take steps “to help ensure fair pay and promotion practices at the company,” including retaining an independent consultant to evaluate its compensation and promotion policies.

    Yet the settlement also sees CRD withdraw its initial claims alleging a culture of widespread, systemic workplace sexual harassment at Activision, according to a copy of the agreement provided to MarketWatch. The document notes that the department is filing an amended complaint that removes the sexual-harassment allegations against the company and focuses on the gender-based pay and promotion claims.

    CRD made no note of its prior sexual-harassment claims against Activision in its announcement Friday. A spokesperson for the department said the statement “largely speaks for itself with respect to the historic nature of this more than $50 million settlement agreement, which will bring direct relief and compensation to women who were harmed by the company’s discriminatory practices.

    Representatives for Activision declined to comment.

    The Wall Street Journal first reported the news of the settlement Friday.

    The California agency’s complaint was one of several high-profile investigations by both state and federal regulators in recent years into alleged workplace misconduct at Activision and failures by its leadership to respond appropriately. 

    While Activision repeatedly denied the allegations, they ramped up pressure on the Santa Monica, Calif.-based company and its CEO, Bobby Kotick, and eventually led to a $68.7 billion takeover bid by Microsoft
    MSFT,
    +1.31%
    in January 2022. The acquisition closed this October after receiving approval by U.K. and E.U. antitrust regulators, though the U.S. Federal Trade Commission continues to challenge the deal in court. Kotick is expected to leave the company, which he led for more than three decades, at the end of this year.

    The settlement would be the second-largest ever for the California Civil Rights Department, according to the Journal, after its $100 million agreement with another Los Angeles-area videogame developer, Riot Games, to resolve gender-discrimination allegations in 2021. The agency had initially sought a much-larger settlement with Activision, the publication reported, citing how the state had estimated the company’s liability at nearly $1 billion to some 2,500 employees with potential claims.

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  • This family just bumped Walmart’s Waltons as the richest in the world 

    This family just bumped Walmart’s Waltons as the richest in the world 

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    The Walton family’s five-year rule as the world’s richest dynasty has come to an end. 

    The House of Nahyan, rulers of oil-rich Abu Dhabi in the United Arab Emirates, comes in at No. 1 on Bloomberg’s world’s richest families list for 2023, bumping the third-generation Walmart
    WMT,
    -1.05%
    heirs that have long topped the rankings

    The report released this week said that petroleum fortunes are “reshaping global business as never before,” and noted that the three Gulf families who made Bloomberg’s latest list of family fortunes are probably even wealthier than these “conservative estimates.” 

    The Al Nahyans of Abu Dhabi rule the list with $305 billion to their name, according to the report, which notes that the United Arab Emirates capital is home to most of the country’s oil reserves. 

    The Al Nahyan family holds $45 billion more than the Walton family, which owns 46% of Walmart — the world’s largest retailer by revenue. The Waltons have ruled the rankings for the past several years, but are now No. 2, worth $259.7 billion in the most recent fiscal year.

    Rounding out the top three is the Hermès family, whose fortune can be traced to the French luxury house. The founding family is worth $150.9 billion, as they still own a two-thirds majority in the company. 

    As far as other Americans on the list, the Mars family’s confectionary collection of chocolate brands such as M&Ms, Milky Way and Snickers bars — not to mention pet products — land them in fourth place with $141.9 billion. And the Koch family, behind Koch Industries, is in sixth place with $127.3 billion. 

    The report added that the richest families have certainly gotten richer this year, with the world’s ultra-rich clans collectively adding $1.5 trillion — yes, trillion — to their wealth in the past year, a 43% increase over their already considerable fortunes in 2022. 

    So here are the world’s 10 richest families of 2023, as reported by Bloomberg. 

    1. Al Nahyan, ruling family of the United Arab Emirates, $305 billion

    2. Walton, owners of Walmart in the U.S., $259.7 billion 

    3. Hermès, owners of Hermès in France, $150.9 billion 

    4. Mars, owners of Mars, Inc. in the U.S., $141.9 billion 

    5. Al Thani, ruling family of Qatar, $133 billion 

    6. Koch, owners of Koch Industries in the U.S., $127.3 billion

    7. Al Saud, ruling family of Saudi Arabia, $112 billion

    8. Ambani, owner of Reliance Industries in India, $89.9 billion 

    9. Wertheimer, owner of Chanel in France, $89.6 billion 

    10. Thomson, owner of Thomson Reuters in Canada, $71.1. million

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  • Cigarette Giant BAT Sees $31.5 Billion Write-Down on U.S. Brands

    Cigarette Giant BAT Sees $31.5 Billion Write-Down on U.S. Brands

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    Updated Dec. 6, 2023 5:14 am ET

    British American Tobacco expects a one-off impairment of $31.5 billion this year due to pressure on some of its traditional cigarette brands in the U.S., as it shifts focus to smokeless products.

    The FTSE 100 cigarette maker—which houses the Kent, Dunhill and Lucky Strike brands among its portfolio—said macroeconomic pressures on its traditional cigarette business performance in the U.S. and investments in its noncombustibles business would lead to an accounting noncash adjusting impairment charge of around GBP25 billion.

    Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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  • Americans did a record amount of shopping on Thanksgiving. Here’s what they bought.

    Americans did a record amount of shopping on Thanksgiving. Here’s what they bought.

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    Americans opened both their mouths and their wallets on Thanksgiving, doing a record amount of shopping on the annual day of giving thanks.

    Consumers spent an all-time high of $5.6 billion shopping online on Nov. 23, up 5.5% compared with last year’s Thanksgiving, according to Adobe Analytics ADBE, which tracks ecommerce and mobile shopping.

    That’s…

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  • Walmart, Nvidia, Novo Nordisk, Vista Outdoor, GM, and More Stock Market Movers

    Walmart, Nvidia, Novo Nordisk, Vista Outdoor, GM, and More Stock Market Movers

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    Stock futures pointed higher Friday as Wall Street returned for a shortened trading session following the Thanksgiving holiday. Retailers will be in focus on Black Friday, which marks the unofficial start to the Christmas shopping season.

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  • S&P 500 futures stall near four-month highs as traders eye Nvidia earnings

    S&P 500 futures stall near four-month highs as traders eye Nvidia earnings

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    U.S. stock futures on Tuesday showed the November rally stalling ahead of results from AI chipmaker Nvidia.

    How are stock-index futures trading

    On Monday, the Dow Jones Industrial Average DJIA rose 204 points, or 0.58%, to 35151, the S&P 500 SPX increased 33 points, or 0.74%, to 4547, and the Nasdaq Composite COMP gained 159 points, or 1.13%, to 14285.

    What’s driving markets

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  • How Starbucks Lost the Top Spot in China’s Coffee Race

    How Starbucks Lost the Top Spot in China’s Coffee Race

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    Starbucks is losing its prime spot among chains racing to meet China’s growing thirst for coffee.

    Luckin Coffee has surpassed Starbucks as China’s biggest coffee chain by sales and units, company reports show, a comeback for the Chinese company after an accounting scandal that stalled its growth.

    Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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  • Dow ends nearly 400 points higher as tech rally leads stocks to highest close since September

    Dow ends nearly 400 points higher as tech rally leads stocks to highest close since September

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    U.S. stocks ended sharply higher Friday, more than shaking off weakness seen the previous session in the aftermath of a poor Treasury bond auction and fresh signs that interest rates may stay higher for longer.

    Technology stocks drove the bounce, with the Nasdaq Composite leading major indexes to the upside as it and the S&P 500 logged their highest finishes since September.

    What happened

    • The Dow Jones Industrial Average
      DJIA
      rose 391.16 points, or 1.2%, to close at 34,283.10.

    • The S&P 500
      SPX
      ended with a gain of 67.89 points, or 1.6%, at 4,415.24.

    • The Nasdaq Composite
      COMP
      advanced 276.66 points, or 2%, to finish at 13,798.10.

    The rally left the Dow with a weekly gain of 0.7%, while the S&P 500 advanced 1.3% and the Nasdaq booked a rise of 2.4%. The Dow saw its highest close since Sept. 20, while the S&P 500 ended at its highest since Sept. 19 and the Nasdaq at its highest since Sept. 14.

    Market drivers

    Tech was in the driver’s seat. Shares of Microsoft Corp.
    MSFT,
    +2.49%
    jumped 2.5%, with the Dow component scoring its third record close in four sessions. Intel Corp. shares
    INTC,
    +2.80%
    rose 2.8% to lead Dow gainers.

    Meanwhile, the S&P 500 tested important chart resistance at the 4,400 to 4,415 level, which marks the confluence of previous resistance and the 61.8% Fibonacci retracement of the July-October drop, according to Matthew Weller, global head of research at Forex.com, in a note (see chart below).


    Forex.com

    “From a bigger picture perspective, bulls will need to see the index conclusively break above 4415 before declaring that the post-July streak of lower lows and lower highs is over,” Weller wrote.

    The S&P 500 and Nasdaq Composite ended their longest winning streaks since November 2021 on Thursday, after a poorly-received $24 billion sale of 30-year Treasury bonds.

    A calmer bond market may have helped set the tone for stocks. The yield on the 30-year Treasury bond
    BX:TMUBMUSD30Y
    fell 3.2 basis points to 4.733%, after it nearly notched its biggest one-day jump since June 2022. The yield still saw a weekly decline, its third straight.

    It was unclear whether the Treasury auction had been affected by a reported ransomware attack against the U.S. unit of the Industrial & Commercial Bank of China that apparently disrupted the U.S. Treasury market.

    See: How ransomware attack on ICBC rattled the Treasury market and shook up a 30-year bond auction

    Thursday’s setback was also tied to comments from Federal Reserve Chairman Jerome Powell, who told an International Monetary Fund panel on Thursday that the central bank was wary of “head fakes” from inflation, and the “2% goal was not assured.”

    Much of Powell’s language was nearly identical to remarks he made on Nov. 1, when investors rallied stocks and bonds after the Fed chair didn’t explicitly commit to a further interest rate hike. But the subsequent rally for stocks after the Nov. 1 Fed meeting, with the S&P 500 jumping more than 6% over eight days, and a 50 basis point drop in the 10-year Treasury yield were “overdone and not governed by facts,” said Tom Essaye, founder of Sevens Report Research, in a note.

    “Meanwhile, if we think about what the Fed said last week, namely that the rise in the 10-year yield was doing the Fed’s work for it and as a result they may not have to hike rates, then the short/sharp decline in the 10-year yield we’ve seen could essentially remove the reason for the Fed not having to hike rates — and that could put a rate hike back on the table!” he wrote. “That’s essentially what Powell reminded us of yesterday and that, along with the poor Treasury auction, pushed yields higher,” setting up pressure on stocks.

    U.S. consumer sentiment fell in November for the fourth month in a row due to worries about higher interest rates as well as war in the Middle East. The preliminary reading of the sentiment survey declined to 60.4 from 63.8 in October, the University of Michigan said Friday. It’s the weakest reading since May.

    Investors were also tuning into more comments by Fed officials Friday, including San Francisco Fed President Mary Daly, who said she didn’t know if rates were high enough to bring inflation back down to the central bank’s 2% target.

    Companies in focus

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  • Plug Power, Trade Desk, Doximity, Unity Software, Illumina, Wynn, and More Stock Market Movers

    Plug Power, Trade Desk, Doximity, Unity Software, Illumina, Wynn, and More Stock Market Movers

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    These Stocks Are Moving the Most Today: Plug Power, Trade Desk, Doximity, Unity Software, Illumina, Wynn, and More

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  • Unity Software’s stock skids 12% on revenue miss, uncertain outlook

    Unity Software’s stock skids 12% on revenue miss, uncertain outlook

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    Unity Software Inc.’s stock fell about 12% in extended trading Thursday after the company reported a revenue miss and withheld from offering guidance.

    “Our results in the third quarter were mixed,” Unity
    U,
    -3.15%
    said in a letter to shareholders. “While revenue came in within guidance, we believe we can do better.”

    The beleaguered game-engine software company has been whipsawed by a series of missteps and departures. In September, it announced new fees based on the number of people who install games built with Unity’s editor software — only to backtrack and revamp its plan following a chorus of complaints that dented the stock. Last month, John Riccitiello announced he was retiring as chief executive, effective immediately.

    Also read: Opinion: Unity Software has a fleeting moment to win back developers — and investors

    “While we did not expect the introduction of the fees to be easy, the execution created friction with our customers and near-term headwinds,” Unity said in the letter. “We expect the impact of this business-model change to have minimal benefit in 2024 and ramp from there as customers adopt our new releases.”

    Unity executives are mulling several new strategies that include layoffs, a reduction in office space and product discontinuations, but it did not offer timing or guidance, according to the shareholder letter.

    Unity reported a fiscal third-quarter net loss of $125.3 million, or 32 cents a share, compared with a net loss of $250 million, or 84 cents a share, in the year-ago quarter.

    Revenue was $544.2 million, up from $322.9 million a year ago.

    Analysts surveyed by FactSet had expected revenue of $554 million.

    Shares of Unity have dipped 12% this year. The broader S&P 500 index
    SPX,
    -0.81%
    is up 13% in 2023.

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  • Adidas 3Q Net Pft EUR259M

    Adidas 3Q Net Pft EUR259M

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    By Andrea Figueras

    Adidas on Wednesday posted a decline in net profit and sales for the third quarter while it continued to reduce high inventory levels.
    

    The German athletic apparel and footwear company confirmed its third-quarter preliminary figures and said that net profit fell 25% on year to 259 million euros ($277.1 million).
    

    

    As reported last month, revenue declined 6.4% to EUR6 billion, although currency-neutral revenue increased 1%, it said.
    

    Operating profit fell to EUR409 million from EUR564 million and the operating margin was 6.8%, down from 8.8% in 2022.
    

    Results for the third quarter were better than expected, but the current performance isn’t good enough, the company said.
    

    Inventory levels decreased more than expected and were down 23% on year, it said. During the first nine months, inventories fell by more than EUR1.1 billion.
    

    Adidas backed its recently updated guidance for 2023, which was raised thanks to Yeezy inventory reductions and a better-than-expected underlying business, it said.
    

    It continues to expect currency-neutral revenues to decline at a low single-digit rate and underlying operating profit–excluding any one-offs related to Yeezy and the underway strategic review–at around EUR100 million.
    

    Adidas also sees an operating loss of around EUR100 million this year.
    

    Write to Andrea Figueras at andrea.figueras@wsj.com
    

    

    

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  • 
		
		
    
			
    Disney and other entertainment giants report after upbeat results from peers, but investors are getting harsher on companies that don’t deliver
    
			
    Disney and other entertainment giants report after upbeat results from peers, but investors are getting harsher on companies that don’t deliver
    
			
     [ad_1]
    

    

    Last month, Netflix Inc.
    
        NFLX,
    
        +1.80%
    
       stock jumped after it reported big subscriber gains and hiked prices. Last week, results from Paramount Global
    
        PARA,
    
        +15.44%
    
       beat expectations, sending shares of the streaming and entertainment giant on its best percentage gain in nearly a year, and Roku Inc.
    
        ROKU,
    
        +8.58%
    
       also offered an upbeat outlook. 
    

    This week — as Walt Disney Co., Warner Bros. Discovery Inc., Lions Gate Entertainment Corp. and AMC Entertainment Holdings Inc. all report results — we’ll get a deeper sense of whether the entertainment industry is starting to make investors happy again, even if they make viewers less happy in the process.
    

    

    Those companies will report as the streaming industry, under pressure from investors to turn a better profit, consolidates and as platforms charge more to watch and cram more advertisements into shows and films. 
    

    Cable TV providers and movie theaters, too, are trying to figure out a way forward as streaming becomes more prevalent. Even as Hollywood’s writers come back to work following a strike that shut down production, its actors are still striking, with issues surrounding AI usage to portray actors, streaming payments and other issues in the balance. 
    

    Disney
    
        DIS,
    
        +2.14%    ,
    
       which reports results on Wednesday, faces questions about losses at Disney+, efforts to cut billions in costs and stamp out streaming-account sharing, its planned takeover of the streaming platform Hulu and speculation over which of its large media properties it might sell. BofA analysts recently estimated that ESPN, which Disney has leaned on for years, could be worth around $24 billion. Meanwhile, activist investor Nelson Peltz has been angling for seats on Disney’s board, and its fight with Florida Gov. Ron DeSantis continues. 
    

    Elsewhere, Warner Bros. Discovery
    
        WBD,
    
        +6.23%
    
       — the parent company of the streaming service Max, Warner Bros. Pictures, Discovery Channel, CNN and other channels — reports on Wednesday, as it tries to turn its reserves of intellectual property into franchise films. Meme-stock theater chain AMC
    
        AMC,
    
        +2.19%    ,
    
       which also reports Wednesday, following upbeat results from rival Cinemark Holdings Inc.
    
        CNK,
    
        -2.43%    .
      
    

    Sales at the theater chains have been lifted in recent months by “Barbie” and “Oppenheimer.” While both were original films, analysts have said the avalanche of sequels and remakes in theaters is unlikely to stop.  
    

    The pressure to boost profits will ultimately affect what TV shows and films get made, and what viewers actually consume. And a report from FactSet on Friday found that investors have been more unkind than usual to companies whose results come up short of Wall Street’s expectations. 
    

    That report found that through the third-quarter earnings season, companies whose earnings miss expectations have seen an average stock-price drop of 5.2% during the two days before the publication of the results through the two days after. If that figure holds, it would be the stock market’s biggest adverse reaction to an earnings miss since the second quarter of 2011. 
    

    This week in earnings
    

    Among S&P 500 companies, 55 including one from the Dow, will report quarterly results during the week ahead. 
    

    EV startup Rivian Automotive Inc.
    
        RIVN,
    
        +0.68%
    
       reports amid concerns about EV demand. Following Ticketmaster parent Live Nation Entertainment Inc.’s
    
        LYV,
    
        +3.53%
    
       blowout quarterly results last week, results from Madison Square Garden Entertainment Corp.
    
        MSGE,
    
        +1.03%
    
       will shed more light on people’s appetites for live entertainment. Results from digital marketing platform Klaviyo Inc.
    
        KVYO,
    
        +3.86%
    
       and fast-casual chain Cava Group Inc.
    
        CAVA,
    
        +5.49%
    
       — both recent IPOS — will offer a deeper look at digital ad budgets and a competitive restaurant backdrop, respectively. 
    

    The New York Times Co.
    
        NYT,
    
        +0.91%
    
       also reports during the week. So do Planet Fitness Inc.
    
        PLNT,
    
        -0.09%    ,
    
       Gilead Sciences
    
        GILD,
    
        +0.44%    ,
    
       eBay Inc.
    
        EBAY,
    
        +3.98%
    
       and Take-Two Interactive Software
    
        TTWO,
    
        +1.03%    .
       
    

    The call to put on your calendar
    

    Cybersecurity drama: Cyberattacks are getting more severe, and customers are starting to feel their effects more acutely. Against that backdrop, casino and resort operator MGM Resorts International
    
        MGM,
    
        +5.27%
    
       will report quarterly results on Wednesday, in the wake of a cyberattack that took down some of its systems. MGM has said that attack, which the company disclosed in September, would cost them roughly $100 million. 
    

    The company said the fallout of that attack — which disrupted hotel bookings and put hotels on manual operations, resulting in long lines — was largely contained to September. But the SEC last week accused software company SolarWinds Corp.
    
        SWI,
    
        +1.74%
    
       of failing to disclose its purported cybersecurity vulnerabilities, potentially leaving other companies wondering whether they’re vulnerable to similar legal action. 
    

    The numbers to watch
    

    The gig economy and delivery demand: Rival ride-hailing platforms Uber Technologies Inc. and Lyft Inc. report results on Tuesday and Wednesday, respectively. Maplebear Inc.
    
        CART,
    
        +0.94%    ,
    
       better known as the grocery-delivery platform Instacart, also reports on Wednesday. 
    

    Analysts have been kinder to Uber
    
        UBER,
    
        +2.73%    ,
    
       the larger of the two ride-hailing companies. But Lyft has tried to cut its prices and roll out new services, including one that tries to match women and non-binary riders and drivers. The financials from all three companies will land after strong results from food-delivery platform DoorDash Inc.
    
        DASH,
    
        +5.35%    ,
    
       which has expanded its services into retail an effort to compete with Instacart and other delivery providers. And they’ll fill in the picture of rider demand following the back-to-school season and a bigger push to get workers back into offices.
    

    Beyond ride-sharing, results from Uber and Instacart will narrow the lens on delivery demand, as some analysts question whether higher prices for basics and the return of student-loan payments might make food delivery more dispensable. Analysts also seem likely to zero on in those companies’ high-margin digital-ad businesses, as more e-commerce platforms try to turn their apps and websites into online billboard space.   
    

    

    

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    Orange-juice futures suffer their biggest weekly decline in over 6 years after hitting record
    
			
    Orange-juice futures suffer their biggest weekly decline in over 6 years after hitting record
    
			
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    Orange-juice futures posted a drop of nearly 11% for the week on Friday, the largest such percentage decline since late March 2017, just days after settling at their highest price on record.
    

    “The weather is good and the hurricane season is almost over,” Jack Scoville, vice president of The Price Futures Group and author of the Grains and Softs Report, told MarketWatch on Friday. 
    

    

    The Atlantic hurricane season runs from June 1 through Nov. 30. It can impact crops in the region, and Florida is among the top orange growing states. The season started off strongly but was relatively quiet in October.
    

    The speculators in the market tried to take profits and “found out that there was no buying interest under the market, so it went down hard,” said Scoville. 
    

    The most-active January contract for frozen concentrated orange juice posted a weekly loss of 10.6% on Friday, the worst weekly performance since the week ended March 31, 2017, according to Dow Jones Market Data. It settled Friday at $3.4925 a pound on the ICE Futures U.S. exchange, down 1.4%, for the session, after dropping 5.2% Thursday.
    

    The big mover among the futures contracts is November, said Darin Newsom, Barchart senior market analyst. 
    

    That contract was down around 14% from this past Tuesday’s high of $4.3195, he said. The first notice day, the day buyers of futures contracts receive a notice that a seller intends to make delivery of a commodity, was Nov. 1, he said. 
    

    Given that, anyone holding long futures who didn’t want to take delivery had to get out of their position — leading to a sharp selloff, Newsom explained. The January contract saw some “spillover selling” from the November contracts. 
    

    Prices for frozen orange juice had marked a record high settlement of $4.008 a pound on Oct. 30. They trade a whopping 71% higher year to date, on track for the best year since 2009.
    

    It’s “hard to buy when a market goes to new all-time highs,” said Newsom. 
    

    Key reasons for the rally are post-COVID demand for vitamin C, and the worst Florida citrus crop since the 1920s, due to a disease called citrus greening, said James Roemer, publisher of WeatherWealth newsletter.
    

    However, the lack of Florida hurricanes this fall and a potentially large 2024 orange crop in Brazil, the world’s largest producer, are “potentially bearish longer term,” he said.
    

    

    

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    Carlsberg CEO says the Putin regime stole brewery operations in Russia
    
			
    Carlsberg CEO says the Putin regime stole brewery operations in Russia
    
			
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    “There is no way around the fact that they have stolen our business in Russia, and we are not going to help them make that look legitimate.”
    

    That’s new Carlsberg CEO Jacob Aarup-Anderson, according to a Reuters account of a journalist call on Tuesday, after Russian President Vladimir Putin this summer ordered the seizure of Carlsberg’s stake in its Baltika subsidiary. Earlier this month, Carlsberg ended license agreements that allow for its beers to be produced in the country.
    

    According to the presidential decree, Carlsberg retains title to the shares in Baltika Breweries but no longer has any control or influence over the company.
    

    

    From the archive (March 2022): Carlsberg and Heineken both say they will exit the Russian market
    

    Carlsberg reported a 3% decline in organic volume growth, as a 6.3% slide in Central and Eastern Europe and a 5.2% decline in Western Europe was partly offset by a 1.5% rise in Asia.
    

    The brewer said two-thirds of the volume decline was due to bad weather and another one-third to consumer sentiment.
    

    Organic revenue, however, rose by 5.8%, on price hikes. It kept its operating-profit guidance for the year unchanged at 4% to 7% growth, and launched a new stock-buyback program valued at 1 billion Danish crowns.
    

    Carlsberg said comparisons in the fourth quarter will be positive in China, in light of the year-ago lockdown, but the weak macro environment in Southeast Asia will continue to impact markets.
    

    Carlsberg shares
    
        CARL.B,
    
        -0.83%
    
       were steady on Tuesday but have dropped 8% this year.
    

    

    

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  • 
		
		
    
			
    Big Tech earnings have been strong, but Apple is about to answer the thousand-dollar question
    
			
    Big Tech earnings have been strong, but Apple is about to answer the thousand-dollar question
    
			
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    While the stock market reactions may not prove it, Big Tech is four-for-four so far this earnings reporting season. 
    

    Alphabet Inc.
    
        GOOG,
    
        -0.03%
    

            GOOGL,
    
        -0.09%    ,
    
       Amazon.com Inc.
    
        AMZN,
    
        +6.83%    ,
    
       Meta Platforms Inc.
    
        META,
    
        +2.91%
    
       and Microsoft Corp.
    
        MSFT,
    
        +0.59%
    
       all beat earnings and revenue expectations for the latest quarter, showing, among other things that the advertising market was healthy in the latest quarter and that software spending is holding up.
    

    

    But one more major test looms in the week ahead. Apple Inc.
    
        AAPL,
    
        +0.80%
    
       is due to deliver September-quarter results on Thursday and those earnings will answer a key question: Are consumers still so willing to purchase thousand-dollar iPhones in the current economy?
    

    Results from other companies in recent weeks have painted a mixed picture of consumer spending. Visa Inc.
    
        V,
    
        -0.87%    ,
    
       Mastercard Inc.
    
        MA,
    
        -0.14%
    
       and American Express Co.
    
        AXP,
    
        -1.42%
    
       say that spending remains resilient, but there are also signs that cracks are starting to form in categories deemed non-essential. Just look at Align Technology Inc.
    
        ALGN,
    
        +0.20%    ,
    
       the maker of Invisalign orthodontic aligners, which saw its stock plunge last week after noting that people seem to be putting off dental and orthodontic visits. 
    

    Read: Invisalign maker’s stock craters after soft earnings, but analysts still say it’s a buy
    

    Granted, some might say that iPhones are glorified necessities these days for Apple fans, even with their high price tags. But Apple conducted an effective price increase on its iPhone 15 Pro model when it rolled out its new phones in September, all while delivering a mostly incremental suite of feature upgrades across all its latest models. Will the new phones prove enticing enough in a period of stretched budgets?
    

    Just judging by S&P 500
    
        SPX
    
       results so far in the aggregate, the odds would seem to be in Apple’s favor for a beat this quarter. About half of index components have already reported, and 78% have posted earnings upside, while 62% have surprised positively on the top line, according to FactSet.
    

    Revenue will be the key item for Apple, as consensus expectations call for a small decline on the metric, which would mark the fourth consecutive year-over-year drop. It’s also worth noting that companies on the whole haven’t been topping revenue estimates by their usual margin. S&P 500 components in aggregate have reported revenue 0.8% above expectations, which compares with a five-year average of 2.0%, FactSet Senior Earnings Analyst John Butters wrote in a recent report.
    

    Apple’s report could also highlight the impact of currency on corporate results, as the company generates more than half of its revenue internationally. 
    

    “Given the stronger U.S. dollar in recent months, are S&P 500 companies with more international revenue exposure reporting lower (year-over-year) earnings and revenues for Q3 compared to S&P 500 companies with more domestic revenue exposure?” Butters asked. “The answer is yes.”
    

    This week in earnings
    

    Many U.S. investors in financial-technology companies likely hadn’t heard of European payments player Worldline SA
    
        WLN,
    
        +9.06%
    
       before last week, but a warning from the French company about deteriorating conditions in Europe helped send shares of PayPal Holdings Inc.
    
        PYPL,
    
        -2.63%
    
       and Block Inc.
    
        SQ,
    
        -3.98%
    
       sharply lower Wednesday, in a selloff one analyst deemed an overreaction. Those companies will look to reassure Wall Street about the health of their businesses with their own reports this week. Plus, while not a payments name, SoFi Technologies Inc.
    
        SOFI,
    
        -0.43%
    
       will provide another read on the fintech sector. Investors will be watching to see how the end of the student-loan moratorium impacted student lending volumes. 
    

    The week ahead will also shed light on how consumers’ dining preferences have evolved in the current economy. Starbucks Corp.
    
        SBUX,
    
        -0.70%    ,
    
       Dine Brands Global Inc.
    
        DIN,
    
        -0.12%    ,
    
       Cheesecake Factory Inc.
    
        CAKE,
    
        -0.47%
    
       and Sweetgreen Inc.
    
        SG,
    
        +0.59%
    
       are among names on the docket. Plus, amid concerns about the impact of GLP-1 drugs such as Ozempic and Wegovy on eating habits, Kraft Heinz Co.’s management will be in the spotlight.
    

    Don’t miss: What exactly are patients taking new weight-loss drugs eating and what are they avoiding? Bernstein asked them.
    

    The call to put on your calendar
    

    You can’t spell Advanced Micro Devices without AI (sort of): Nvidia Corp.
    
        NVDA,
    
        +0.43%
    
       has been ruling the chip world this year thanks to its dominance with the sort of hardware needed to power the corporate AI fervor. Investors will be watching Tuesday afternoon to see how quickly Advanced Micro Devices Inc.’s
    
        AMD,
    
        +2.95%
    
       own AI story is coming together. “The AMD narrative feels all about their data center (and, particularly, their AI story) right now,” Bernstein analyst Stacy Rasgon wrote in a note to clients. “In the near term the achievability of their 2H data-center growth (guided to 50% half-over-half) will be the question.” Rasgon expects AMD to discuss recent customer wins for its MI300X chip, though he thinks it will take time for the company to see “real volume.”
    

    The number to watch
    

    PayPal transaction margins: Shares of the one-time investor darling are trading at their lowest levels since May 2017, and the latest source of anguish for Wall Street is the company’s transaction margins. PayPal’s lower-margin unbranded checkout business has been growing more quickly than its higher-margin branded checkout product, a trend that’s been weighing on overall transaction margins. Barclays analyst Ramsey El-Assal expects the third quarter to mark a bottom on the metric before trends stabilize in the fourth quarter. “We do not believe the stock is crowded on the long or short side into earnings, as investors lack conviction regarding the magnitude of transaction margin headwinds in Q3,” he wrote in a recent preview. “In any case, we view Q3 as a potential clearing event.” PayPal posts results Wednesday afternoon.
    

    

    

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    No, you don’t need to buy Costco’s $4,500, 157-piece Le Creuset cookware set
    
			
    No, you don’t need to buy Costco’s $4,500, 157-piece Le Creuset cookware set
    
			
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    No, you don’t need to spend $4,500 on that 157-piece Le Creuset cookware set from Costco
    
        COST,
    
        -0.83%    .
      
    

    The pricey package has become an everyone-is-talking-about-it sensation, owing largely to social media. A post about the set on X, the platform formerly known as Twitter, that has now been viewed some 21 million times seems to have been the initial source of the buzz. It noted that the Costco offering has “probably every kitchen item you will ever need.”
    

    

    In turn, that post generated more social-media chatter, along with articles in publications including the New York Post and the Delish website.
    

    Now the set is apparently so popular, you can’t even get it. In several parts of the country, the Costco site doesn’t even list it as being available. MarketWatch reached out to the retailer for details but did not receive an immediate response.
    

    Perhaps it’s just as well that home cooks won’t be tempted to spend all that money. When MarketWatch spoke with several prominent New York chefs and restaurateurs, they all said the set was overkill, even if it represented a savings compared with buying the items individually.
    

    If anything, these culinary pros noted that purchasing so many pieces not only poses a storage issue, but it can also create confusion in the kitchen, especially for the home cook.
    

    “I don’t even have one-tenth of that set,” says veteran chef Konstantinos Kvasilava, who works at Kyma, a high-end Greek restaurant in New York, and who previously was at Geranium, a Michelin-starred establishment in Copenhagen.
    

    So what are the items you should buy for your kitchen? Here are five rules chefs say you should keep in mind.
    

    Stick with the basics
    

    The Costco Le Creuset set includes several pots and pans, plus bakeware, dinnerware and more. Let’s presume you already have some plates and utensils in your kitchen. Beyond that, chefs generally recommend a small number of pieces — think in terms of as few as four and as many as 10, says Franklin Becker, chef and owner of the Press Club Grill and Point Seven restaurants in New York. His must-have list includes 8-inch and 10-inch nonstick pans, a high-sided stainless-steel sauté pan and 1-quart, 4-quart and 8-quart pots. “Those are the essentials,” says Becker, explaining that such items will cover your needs depending on what you’re cooking — the nonstick pans are great for eggs, he notes — and how many people you’re cooking for. The 8-quart pot will work if you’re entertaining a crowd and need to make a big dish.
    

    Other chefs’ must-haves include a cast-iron pan, often a preferred method for cooking steaks; a casserole dish, which is good for casseroles, naturally; and a Dutch oven. It’s always best to think of items that can be used in multiple ways. Rose Noel, executive chef at New York’s Peak restaurant, likes a cast-iron pan, for example, because it can go into the oven and can also be used on an outdoor grill. “It carries everywhere,” she explains. And, she says, a decent-sized casserole dish can double as a roasting pan for, say, cooking a chicken.
    

    Add extras, depending on what you eat
    

    One you have those basics, look at your daily diet and buy items that fit your own needs. Simon Kim, proprietor of Cote Korean Steakhouse, which has locations in New York and Miami, says he doesn’t make eggs at home for breakfast, but he always makes smoothies, so a powerful blender is a must for him. And he eats a lot of rice, so he has a rice cooker, which he says is much better than an everyday pot when it comes to preparing that staple.  
    

    Buy quality
    

    It’s always tempting to go the cheap route, but chefs say you’ll pay for it in the end by having cookware that doesn’t last as long and doesn’t cook as well. Becker notes that aluminum cookware, which typically costs less, should be avoided at, well, all costs.
    

    In terms of brand preferences, chefs mention many higher-end names, such as T-fal , All-Clad and Le Creuset. And when it comes to that blender for his morning smoothies, Kim says he swears by his Vitamix.
    

    Avoid sets
    

    The problem with buying any cookware set, even one with as few as 10 pieces, is that it often means duplicating items you already have, chefs say. Plus it doesn’t allow you to mix and match brands and take advantage of the fact that certain brands may be better than others for certain items.
    

    Noel suggests you purchase cookware for your kitchen the same way you purchase clothes for your wardrobe. “Buy pieces to fill in what you’re missing or need to update,” she says.
    

    Take care of what you own
    

    Even the best cookware won’t measure up if you don’t treat it properly. Becker says it’s important to wash pots and pans pretty much immediately after each use so that food and grease don’t harden and become difficult to remove. And when it comes to that cast-iron pan, Becker suggests that it be seasoned and cleaned with salt before being oiled lightly to seal it. 
    

    Now read: Americans are sick and tired of tipping. Here’s why we need to tip more — not less.
    

    

    

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    Intel cheers foundry wins, AI traction, and its stock is roaring after earnings
    
			
    Intel cheers foundry wins, AI traction, and its stock is roaring after earnings
    
			
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    Intel Corp. shares were popping nearly 8% in Thursday’s extended session after the chip maker delivered a rosy forecast, while talking up new customers for its foundry business and traction related to artificial intelligence. 
    

    For the fourth quarter, Intel
    
        INTC,
    
        -0.94%
    
       anticipates $14.6 billion to $15.6 billion in revenue, whereas analysts were looking for $14.4 billion. The company is also modeling 44 cents in adjusted earnings per share, while the FactSet consensus was for 33 cents. 
    

    

    “While the industry has seen some wallet share shifts between CPU and accelerators over the last several quarters, as well as some inventory burn in the server market, we see signs of normalization as we enter Q4,” Chief Executive Pat Gelsinger said on the earnings call. 
    

    Gelsinger expressed confidence about Intel’s positioning — and the future of central processing units — as AI becomes more dominant in the technology world.
    

    “Training of these large models is interesting, but the deployment of those models, the inferencing use of those models is what we believe is truly spectacular for the future,” he said. “And…some of that will run on the accelerators, but a huge amount of that is going to run, right, on Xeons.”
    

    He also shared that Intel now has three customers for its 18A foundry process technology that have made commitments. The company previously disclosed one customer made prepayments, but Gelsinger added Thursday that Intel has two other customers. 
    

    “The other thing that we saw this quarter, which was a little bit unexpected, was this huge surge in interest for AI customers and Intel’s advanced packaging technology,” he said. 
    

    Intel is in the midst of a big push to build a foundry business through which it would manufacture chips for other companies, though not all on Wall Street are sold yet on the move. 
    

    The company also delivered an upbeat third-quarter report, easily clearing Wall Street’s bar on profit and topping expectations on revenue as well.
    

    The company reported net income of $297 million, or 7 cents a share, compared with $1.0 billion, or 25 cents a share, in the year-earlier period. On an adjusted basis, Intel earned 41 cents a share, down from 59 cents a share a year prior, while analysts were looking for 22 cents a share. 
    

    Revenue dropped to $14.2 billion from $15.3 billion, while the FactSet consensus called for $13.6 billion.
    

    The company saw revenue from its personal-computer segment, known as client-computing, drop 3% to $7.9 billion, whereas analysts were looking for $7.3 billion. Data-center and AI revenue fell 10% to $3.8 billion, narrowly missing the FactSet consensus, which was $3.9 billion.
    

    Intel recorded a 45.8% adjusted gross margin, compared with 39.8% in the second quarter. The company’s forecast had been for about 43%.
    

    Intel shares have climbed 24% so far this year, as the Dow Jones Industrial Average
    
        DJIA
    
       has lost about 1%.
    

    

    

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