Tag: E-commerce

Uber and Lyft shares rallied in 2023 but may not go much higher, analysts say

Shares of Uber Technologies Inc. and the ride-hailing giant’s smaller rival, Lyft Inc., have sprinted higher this year. But analysts on Friday suggested there might not be much left in the tank for either stock heading into 2024.

Nomura analysts Anindya Das and Masataka Kunugimoto on Friday downgraded Uber
UBER,
-2.49%
to a neutral rating from buy, arguing that most of the things that could drive the stock higher are already baked into the price. They also downgraded Lyft
LYFT,
-3.54%
to their equivalent of a sell rating from buy, saying the company failed to fully capitalize on the travel industry’s post-pandemic recovery.

Shares of Uber, which closed out the year up 142%, were down 2.5% on Friday. Lyft’s stock gave up 3.4% and finished 2023 up 34.8%.

Uber, the analysts said, had managed to grow this year while occasionally turning a profit, and consolidated its grip on the ride-sharing markets in the U.S. and Canada. Meanwhile, Lyft, they said, had stumbled in its efforts to take advantage of the travel rebound after pandemic restrictions eased, cutting more staff this year after doing the same in 2022.

After years of losing money, they said Uber’s stronger financials this year allowed it to refinance its debt at a lower interest rate and extend the terms of that debt. They noted the company recently joined the S&P 500 Index
SPX
and that the market is expecting more stock buybacks from the company, as well as interest-rate cuts by the Federal Reserve next year.

“Thus, most of the milestones and catalysts that we were anticipating to boost Uber’s stock value have been largely met,” they said.

They added: “At this time, we think most of the catalysts for the stock are already priced in, and Uber is fairly valued at the current price. We therefore downgrade it to Neutral from Buy.”

Lyft has tried to cut its prices to compete with Uber, and has held off on expanding into areas like food delivery. But as travel demand settles, the analysts suggested, the advantages would still flow to its archrival.

“We expect 2024 to be more of a ‘normal’ year, in terms of people’s propensity to travel,” the analysts said. “Once the current rebound in travel subsides, we think Lyft’s subscale market positioning, and lack of cross-selling opportunities (unlike Uber), could constrain topline growth for the company.”

“Offsetting a more moderate pace of ridership growth by raising prices would be challenging for Lyft,” they said, “as we think it would be bound by the actions of its larger and more profitable peer, Uber.”

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December 29, 2023
Nike says 'newness' is crucial to its growth. One analyst says it's not working

As sneaker makers try to stay relevant amid waning demand, Nike Inc. executives on Thursday said they were banking on “newness and innovation” to win over reluctant shoppers. And as sales deals on shoes proliferate, they said interest in its sneakers that cost over $100 is still solid, and that an expansion of its Jordan brand — beyond basketball gear and shoes — represents an opportunity to boost profits.

But one analyst on Friday cast doubt over whether those plans will work for all of Nike’s
NKE,
-11.83%
customers in the long term.

“Nike needs improved marketing outside of basketball, streetwear and lifestyle trends,” TD Cowen analyst John Kernan said in a research note on Friday. “Innovation at the higher end of its assortment is not resonating at scale while . . . Nike faces disruption from smaller competitors in footwear and apparel. Jordan brand moving into lower price points and away from a scarcity model creates risk to the fastest-growing piece of the business.”

That assessment came after Nike’s quarterly results and dimmer outlook after the market close on Thursday sent shares reeling. Management said that consumers were still cautious, as higher prices for essential goods siphon away what they can spend on new sneakers and clothes.

Following the results, TD Cowen analysts on Friday downgraded the stock to their version of a hold rating. CFRA, meanwhile, also lowered its opinion on the stock to sell from hold.

Shares of Nike were down 11.6% on Friday.

During Nike’s fiscal second quarter, sales trends were shaky in both the athletic-gear maker’s digital channels and its markets abroad, executives said Thursday. In North America, sales slipped 4% year over year. For the holidays, sales were softer outside of the big discount days like Black Friday and Cyber Monday. And competition from the likes of Adidas
ADDYY,
-5.55%,
Deckers Brands
DECK,
-1.48%
subsidiary Hoka One One and running-shoe maker On Holding
ONON,
-3.71%
hasn’t gone anywhere.

Nike’s results, Kernan said, were a sign that Wall Street’s profit estimates were too high for Adidas and other competitors like Vans owner VF Corp.
VFC,
-3.23%
and Under Armour
UA,
-3.52%.

On the company’s earnings call Thursday, Nike said it didn’t plan on getting sucked into a “race to the bottom on digital,” where weaker online traffic forced more markdowns. But like Kernan, Raymond James analyst Rick Patel also had questions about Nike’s efforts to push full-priced product.

“Nike noted that it intends to focus on full-price selling and doesn’t want to participate in aggressive discounting,” he said. “Also, it aims to manage inventories for key franchises more carefully going forward in order to avoid the promotional fray, which also limits sales growth. We view these as the right moves to protect the health of the brand, but also acknowledge that it leaves Nike at a near-term competitive disadvantage to drive revenue.”

CFRA analyst Zachary Warring, in emailed commentary, said some of Nike’s other rivals could cut into demand.

“Although Nike maintains a fortress balance sheet with significant capital returns, we believe the multiple will trend back down to pre-pandemic levels as the company faces competition from brands like Hoka and On [Holding] while it looks for new growth drivers and focuses on cutting costs,” Warring said.

Nike executives on Thursday said Jordan-branded clothing and products for golf, soccer and football, along with products for women and children, would bring stronger results. They said the same for bras, leggings, retro-themed running shoes and other offerings in its business geared toward women.

The company also announced plans to save up to $2 billion over the next three years. That savings effort, it said, could include simplifying its product selection, bringing more automation into its operations, and “streamlining” the company by shedding management layers.

Nike has reportedly already begun laying off workers. The company on Thursday said it expected to book pre-tax restructuring charges of around $400 million to $450 million “primarily associated with employee-severance costs.”

Nike plans to reinvest those savings back into the company. But as the company tries to fatten margins, Jefferies analyst Randal Konik said those reinvestments could do the opposite.

“We would expect [management] to reinvest a majority of these cost savings, likely leaving less margin and earnings ‘cushion’ should top-line performance continue to soften over the next 6-12 months,” he said.

In recent years, Nike has been trying to sell fewer items through outside retail chains and more through its own stores and online channels. But executives on Thursday said that multiyear effort had created “complexity and inefficiencies”

Edward Jones analyst Brian Yarbrough told MarketWatch that Nike is likely cutting costs after weighing the broader economic backdrop and weakness in its digital business against its sales and margin goals.

“Combined with a slower revenue-growth environment — and the fact that digital, which is their more profitable channel, is slowing and in some markets declining — I think they probably said, ‘If we’re going to get there, it’s probably going to have to come with some cost cuts,’” Yarbrough said.

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December 22, 2023
Nike shares dive, company eyes $2 billion in cost cuts amid 'softer' outlook

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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December 21, 2023
PDD Stock Soars on Earnings as Alibaba and Amazon Rival Sees Staggering Growth

Shares in PDD Holdings soared Tuesday after the online retailer reported quarterly results that were far ahead of Wall Street’s expectations. The rival to both Alibaba and Amazon revealed staggering growth.

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November 28, 2023
No, Jeff Bezos hasn’t been unloading Amazon stock

A number of Amazon.com Inc. executives have disclosed sales of some of their Amazon stock holdings in recent weeks, but Jeff Bezos, the company’s executive chair and a mega-shareholder, was not among them.

Despite some reports to the contrary, Bezos hasn’t disclosed any sales of Amazon shares AMZN for two years, but he has given some shares away to nonprofit organizations.

There…

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November 27, 2023
Gunfire erupts during Black Friday shopping at Northridge mall, but no injuries reported

Six juveniles were briefly detained after gunshots rang out near Northridge Fashion Center on Friday evening, but no one was injured and no arrests were made, police said.

Los Angeles Police Department Capt. Kelly Muniz said gunfire was reported near the AMC Theater outside the mall around 6 p.m. Police detained six juveniles running from the scene but later released them as none possessed a weapon or had visible injuries.

Shell casings were recovered, Muniz said. Television stations reported that a glass window had been shattered at a sushi restaurant near the theater.

The shooting happened on Black Friday, generally considered to be one of the biggest retail shopping days of the year, though the large crowds that used to descend on malls have decreased in recent years with the rise of E-commerce and the extension of discounts through the weekend by most stores.

James Queally

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November 24, 2023
Adobe: Thanksgiving US online sales nudge up to $5.6B; Salesforce: $31.7B spent globally | TechCrunch

Thanksgiving Thursday, when stores in the U.S. are closed and many are spending time off work, has become the de facto start of the holiday shopping season both for those looking to bargains online, and for online retailers to kick off holiday sales deals to meet that demand. But if there is a message from this year’s Thanksgiving sales, it is that consumers are holding steady, but don’t hold your breath for a growth boom.

Adobe Analytics said that people in the U.S. spent on Thursday spent $5.6 billion online, which it calculates at an increase of just 5.5% on last year.

Salesforce, which also calculates sales based on data collected by its Commerce Cloud division, noted that globally, online sales reached $31.7 billion with its U.S. tally at $7.5 billion — both up only 1%. Salesforce’s calculations of average order value were equally modest. Globally, average orders were up just 2% to $103 per “basket” while in the U.S. they were up a paltry 1% to $119.

Mobile devices had a standout year: Adobe said that some $3.3 billion was spent over mobile devices on Thanksgiving, up 14% and an all-time record for the day.

Salesforce added that online traffic in general to e-commerce sites, which will include browsing, were up too, but again only in single digits of 4% globally and 6% in the U.S.

The two are actively tracking sales for today, Black Friday, and for the whole of the “Cyber Weekend” — which not only kicks off holiday shopping but has a particularly strong showing in online sales due to people travelling to be with family. As a bellwether for the rest of the holiday period — traditionally the biggest period for retail sales in the year — the flat sales speak to another tough year for online retailers.

Adobe Analytics is predicting $37.2 billion in online spend for the full five days, up just 5.4% year on year and accounting for 16.8% of all holiday spend. And Black Friday will see $9.6 billion in sales, up roughly the same, 5.7%, versus figures last year. (The published figures in 2022 were $9.13 billion.) Salesforce has not provided forecasts.

For some context on today’s Thanksgiving figures, last year’s published figures from Adobe were $5.29 billion, which actually represents an increase of just under 4%. (It’s likely Adobe Analytics readjusted its final figures for last year, which is why we see a higher percentage of growth.) Today’s 5.5% rate is definitely an improvement on last year’s 2.9%. But it’s. nothing compared to the years preceding Covid-19, such as 2017, where we were seeing growth of 18% or more.

Inflation is making an impact but not as much as the worry around consumer spending, said Adobe, which said that spending being led actually by more discounts to encourage buying, rather than less buying of more expensive products. That leads one to wonder what kind of impact that’s having on retailers’ margins.

“Cyber Week is off to a strong start with Thanksgiving driving a record $5.6 billion in online spend as consumers took advantage of strong discounts and continued their shopping plans, virtually,” said Vivek Pandya, lead analyst, Adobe Digital Insights, in a statement. “Mobile shopping hit an all-time high, as shoppers took to their smartphones to get the best deals during holiday gatherings, further solidifying mobile’s growing importance in e-commerce.”

Adobe Analytics’ figures are based, it says, on 1 trillion visits to U.S. retail sites, 100 million SKUs, and 18 product categories. Salesforce says it taps data from 1.5 billion consumers in its research. (Both companies work with a number of giant and smaller retailers, so they have the infrastructure to provide this kind of intel to these customers on an ongoing basis.)

Breaking out some of the trends in how people are shopping:

— Overall, desktop sales are still exceeding other kinds of screens when it comes to conversions and number of items purchased, but mobile is the standout device in the evening hours, when it accounted for a whopping 59% of all online sales (likely because people were using that time to socialize and buy on the sly).

— More on mobile: Salesforce said that for the day, mobile accounted for 79% of all online traffic globally and 82% in the U.S., and that mobile wallets were really making a mark for reducing some of the buying friction on the smaller devices. Apple Pay saw transactions up by 47% compared to 44% up for all mobile wallets overall. Social on mobile — think Instagram links, TikTok and Snapchat — has become an influencer in itself. These collectively accounted for 13% of all traffic referrals to sites. Notably, they are not where the purchases are being made for the most part, though.

“Mobile traffic and sales are soaring as people are on the go once again this holiday weekend,” said Salesforce VP and GM, Retail, Rob Garf, in a statement. “Consumers are embracing mobile wallets to break down friction between discovering on social and purchasing on mobile.”

— Retailers are really pushing out discounts to get people more willing to spend money this year. Both Adobe and Salesforce said in the U.S. discounts were up by about 28%. Categories that saw dramatic markdowns included toys, electronics and computers, per Adobe’s figures; respectively these saw sales up by 182% and 113% over last month.

— Buy Now Pay Later (BNPL) remains a popular option for paying up front. BNPL drove $390 million in online spend, Adobe said, up 7.5% on last year.

We’ll update with more data later, and with Black Friday figures as they start to emerge.

Ingrid Lunden

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November 24, 2023
How algorithms determine what you’ll buy for the holidays — and beyond

We’ve all been there: Scrolling through social media and spotting the ads recommending something you never knew you needed, whether it’s the perfect pair of shoes, a gadget to solve an annoying problem or the ideal holiday gift for your mom.

As the holidays approach and shopping ramps up, you’re more likely to see gift ideas inspired by and advertised by algorithms, experts in the field of algorithmic commerce and online shopping say.

Algorithmic commerce essentially means retailers use technology, including artificial intelligence, to track and analyze consumer purchases, and predict or suggest other items to buy, according to Haya Ajjan, the associate dean of the Love School of Business at Elon University. Ajjan said that use of the method is growing, with artificial intelligence “reshaping e-commerce and marketing.”

“When I go to Amazon, I feel like sometimes what it’s recommending to me is exactly what I need to purchase,” said Ajjan, who teaches machine learning and data mining. “It’s even taking away the search that I was about to embark on, but the way that this is done is typically that the algorithm analyzes my online activities, how I browse the web, where I’m searching, and then tries to anticipate my need. Sometimes I think that the websites I’m using are kind of anticipating my need, or even a need that I did not know I had.”

What does this mean for my holiday shopping?

Using algorithms to navigate the endless products for sale on the Internet is like having “a personal shopper for the holidays,” said Beth Ann Kaminkow, the global CEO of the brand agency VMLY&R Commerce.

“If you are buying for people you are close with, communicate with on a regular basis, and you begin your shopping online … chances are pretty good you have some personalized help in the form of an algorithm helping to inspire your gift list!” she told CBS News in an email. “Less creepy than it may sound, the value of our favorite retail sites learning our shopping behaviors, preferences, style, taste — is a major boost when the pressure is on to complete our holiday shopping in (the) days remaining.”

Most people buying holiday gifts do at least some of their shopping online, according to an October poll from Gallup — making it more likely that algorithms will influence their purchases. Ninety-three percent of people told Gallup they would do at least some of their holiday shopping online — just 7% of people said they would not shop online at all.

Social media amplifies the algorithms’ reach. On these sites, other algorithms shuffle relevant videos, photos and other content into your feed. Sites like Instagram and TikTok are only emphasizing the shopability of the content shared, with features that allow people to buy products in-app. And according to Gallup, 33% of shoppers say they will do some of their shopping using social media platforms. Most of those shoppers skew younger, according to the poll, with 48% of people 18-29 years old saying they will do “a little of” or more of their shopping through social media.

Ajjan compared social media to the Christmas windows at New York City’s Macy’s department store.

“Those are really famous, associated with shopping and attracting the audience and driving our purchase intent. It’s exactly the same way we’re interacting with Instagram or TikTok,” said Ajjan. “Research shows 62% of shoppers report interest in a product or brand after actually seeing it on their story or feed. I think that’s really powerful. 49% of consumers rely on influencers … Social media channels are changing the way that we shop.”

TikTok said that since launching its in-app TikTok Shop, more than 200,000 retailers have registered to sell items there. Over 100,000 content creators share products through its affiliate program, where they receive a cut of the sales. Meta, which owns Instagram and Facebook, did not respond to a request for comment from CBS News.

Video content can be particularly compelling, Ajjan said, because it allows shoppers to see how a product works. Sometimes, these videos are edited or altered, but “visual presence plays a big role in driving purchase behavior,” Ajjan said, and videos from influencers that you’ve been following for a long time can sometimes feel like “peer recommendations” from a trusted friend.

Sometimes, videos from influencers are ads, and while there are rules mandating that influencers disclose when they are being compensated for mentioning a product or item, those restrictions aren’t always followed. In 2022, Kim Kardashian was fined more than $1.25 million for not disclosing that she was being paid to promote a cryptocurrency.

Is there any way to avoid algorithms determining my purchases?

Just avoiding shopping online doesn’t mean your shopping isn’t being curated by an algorithm, experts said. The effects of algorithmic commerce can also be seen in physical stores.

“All retail strategies are becoming increasingly data-driven, aiming to provide a very highly tailored and personalized experience for the customer,” Ajjan said. “This is something you see whether you’re on your Amazon account, or whether you go to Nordstrom, or honestly any retailer.”

In these brick-and-mortar locations, retailers use algorithms to determine what people are shopping for, to predict which items will be bestsellers, and even to organize the store in the most efficient, appealing way for shoppers. Ajjan said that these algorithms are educated by the “large amount of data” retailers have collected about their customers, and all retail strategies are taking advantage of the information available.

Despite this, physical shopping is the best way to avoid algorithms influencing your purchases, Kaminkow said. If you’re shopping online and want to avoid that influence, Kaminkow recommends turning off or reducing cookies and tracking across your online activity, but this isn’t a foolproof solution.

“If you are someone who spends time online between search sites, shopping sites, and social sites … your preferences are being tracked” with the goal of companies being better able to show users relevant content and recommendations, Kaminkow said.

How can I use algorithmic commerce to my advantage?

Beyond using algorithm-based recommendations as a “personal shopper,” as Kaminkow said, these suggestions can help consumers find ideal gifts for loved ones or themselves.

“If you are someone who buys for others based on what you are attracted to, what you wish (or) want for yourself … all of your online search, browsing and shopping will be informed by algorithms that are getting smarter behind the scenes on your taste, preferences and shopping habits. If your holiday list includes people you shop for throughout the year, the same applies,” Kaminkow said in an email.

Even if you’re shopping for people outside your normal search behavior, algorithms will still have an impact, Kaminkow said: Recent searches and views will inspire the algorithm, and the algorithms used by retailers and brands will still be used to suggest products and services.

“Beginning your holiday shopping and browsing outside of retail sites, like social platforms, offer good opportunities for algorithm-driven ideas and influence to help form your gift list this holiday season,” Kaminkow said.

Trending News

Kerry Breen

Kerry Breen is a reporter and news editor at CBSNews.com. A graduate of New York University’s Arthur L. Carter School of Journalism, she previously worked at NBC News’ TODAY Digital. She covers current events, breaking news and issues including substance use.

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November 23, 2023
Apple, Microsoft, Nvidia—What Tech Stocks Hedge Funds Are Buying and Selling

It’s filing season for a string of major hedge funds, and big tech names like Apple, Microsoft, and Nvidia were among the most-traded equities in the third quarter.

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November 15, 2023
Amazon offers Prime members primary care for $9 a month

Amazon.com Inc.
AMZN,
-0.58%
said Wednesday that it will offer Prime members primary care for $9 a month through its healthcare business One Medical.

The new One Medical membership includes unlimited round-the-clock virtual care nationwide, Amazon said. Prime members who sign up for the benefit can also schedule same-day or next-day in-person appointments at One Medical primary care offices, but they must use their insurance or pay out-of-pocket for office visits, the company said.

The $99 annual cost of One Medical for Prime members represents a $100 discount off the standard One Medical annual membership fee. Prime membership costs $139 a year.

The new offer comes as the e-commerce giant has been expanding its health services with Amazon Pharmacy and the online healthcare service Amazon Clinic as well as its $3.9 billion acquisition of One Medical, which closed earlier this year. The company’s healthcare efforts could be an important driver of future sales, potentially generating an extra 1 percentage point of revenue growth in 2026, D.A. Davidson analysts wrote in a September research note.

Amazon is among several retailers pushing into the primary care business. Costco Wholesale Corp.
COST,
-0.67%
recently started offering members access to healthcare, including $29 virtual primary care visits, through a deal with online marketplace Sesame. Walmart Inc.
WMT,
-0.51%
has been setting up Walmart Health centers, providing primary care, dental care, labs and other services, inside some of its Walmart Supercenters.

Although One Medical has hundreds of locations scattered across roughly two dozen metro areas, it doesn’t have the same presence as some companies that have established healthcare services in their retail locations. CVS Health Corp.
CVS,
+0.01%,
for example, has more than 1,100 MinuteClinic locations.

Amazon shares were roughly flat Wednesday morning and have gained 70% in the year to date, while the S&P 500
SPX
has gained 14%.

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November 8, 2023
Disney and other entertainment giants report after upbeat results from peers, but investors are getting harsher on companies that don’t deliver

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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November 5, 2023
Amazon Stock Jumps on Earnings Beat. Cloud Results Were Good Enough.

Amazon shares rose in late trading Thursday after the company posted better-than-expected financial results for the September quarter.

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October 26, 2023
Amazon’s focus on speed, surveillance drives higher warehouse worker injuries, study finds

An employee looks for items in one of the corridors at an Amazon warehouse.

Carlos Jasso | Reuters

Amazon warehouse workers are suffering physical injuries and mental stress on the job as a result of the company’s extreme focus on speed and pervasive surveillance, according to a new study.

The study, released Wednesday by the University of Illinois Chicago’s Center for Urban Economic Development, includes responses from 1,484 current Amazon workers across 42 states and 451 facilities, in what the authors are calling the largest nationwide survey of Amazon workers to date.

Nearly 70% of Amazon employees who participated in the survey said they’ve had to take unpaid time off due to pain or exhaustion suffered on the job in the past month, while 34% have had to do so three or more times. The most common injury reported by workers was sprains, strains or tears, and nearly half of respondents said they had moderate or severe pain in the leg, knee or foot in the last three months on the job. More than half of workers said they’re burned out from their work at the company, and that response rate intensified the longer the employee had worked at Amazon.

The data adds to a drumbeat of scrutiny around Amazon’s workplace safety and treatment of warehouse employees. Regulators, lawmakers, rights groups and employees have criticized Amazon — which is the second-largest employer in the U.S., behind Walmart — over its labor record. The researchers estimate Amazon is the largest warehouse employer in the country, accounting for an estimated 29% of workers in the industry.

Amazon had roughly 1.46 million employees globally, as of the quarter ended June 30, and the majority are warehouse and delivery workers.

The Occupational Safety and Health Administration and the U.S. Attorney’s Office are investigating conditions at several warehouses, while the U.S. Department of Justice is examining whether Amazon underreports injuries. In June, a Senate committee led by Sen. Bernie Sanders, I-Vt., also launched a probe into Amazon’s warehouse safety.

Amazon has said it has made progress on lowering injury rates and that the company has made adjustments to working environments in order to reduce strain and repetitive movements. It has begun to automate some tasks and is also rolling out more robotic systems in warehouse facilities that the company claims can improve safety, although that prospect has been debated.

Workers fulfill orders at an Amazon fulfillment center on Prime Day in Melville, New York, US, on Tuesday, July 11, 2023.

Johnny Milano | Bloomberg | Getty Images

About 64% of workers who participated in the survey said they feel the safety of workers is a high priority at Amazon, but that sentiment is lower among those who reported negative impacts to their physical health from the job.

The survey was funded by Oxfam America, and advocacy groups the Ford Foundation and the National Employment Law Project.

Amazon spokesperson Maureen Lynch Vogel disputed the study findings in a statement and said “there’s nothing more important” than employees’ health and safety.

“This is not a ‘study’ – it’s a survey done on social media, by groups with an ulterior motive,” Vogel said. “If anyone actually wants to know the facts, they can read the data that we publish each year and submit to OSHA, which shows that rates in our buildings have improved significantly and we’re slightly above the average in some areas and slightly below the average in others.”

Amazon said musculoskeletal disorders, or problems like sprains and strains are the most common type of workplace injury across all industries, adding that employees get adequate breaks and that the company provides mental health resources for staffers. Amazon also said it informs managers that productivity or speed shouldn’t be pressed at the expense of worker safety.

Role of speed and surveillance

Safety critics have increasingly zeroed in on Amazon’s speedy pace of work and close monitoring of employee productivity as factors that lead to a heightened risk of injuries.

The survey results underscored that point, finding that those who reported injuries on the job while working at Amazon are more likely to say that keeping up is hard than workers who have not been injured.

Approximately 44% of workers surveyed said they couldn’t take breaks when they need to, according to the study. “A key mechanism for workers to maintain a fast pace of work without injury is the ability to take breaks and recover from periods of intense work,” the researchers said.

Amazon packages move on a conveyer belt at a fulfillment center in England.

Nathan Stirk | Getty Images

Employees pointed to “technology-enabled workplace monitoring” as something that reinforces the pace of work, while 53% of respondents said they always or most of the time “feel a sense of being watched or monitored in their work at the company.”

“We see clear evidence in our data that work intensity and monitoring contribute to negative health outcomes,” the researchers said.

Amazon uses a variety of metrics to measure warehouse workers’ activity on the job, the researchers said, including rate, or the number of tasks they’re expected to complete per hour; task time, which measures the average time between scans with a barcode scanner; and idle time, or “time off task,” which measures time a worker isn’t scanning items while on the clock.

Workers have argued that the time off task policy makes working conditions more strenuous and that it’s used as a tool to surveil workers. Amazon in 2021 adjusted its time off task policy so that it averages data over a longer period.

WATCH: Amazon’s worker safety hazards come under fire from regulators and the DOJ

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October 25, 2023
Reën Launches with Release of Sustainable and Waterproof Luxury Jacket

The elevated jacket is Reën’s first product to hit the market and is now available for purchase online.

SEATTLE, October 19, 2023 (Newswire.com)
–
Reën (pronounced /rān/ or “Rain”), a sustainable apparel company specializing in the production of luxury men’s waterproof jackets, has officially launched with the release of its first product. The Reën waterproof jacket is designed to be worn regardless of the weather forecast. With an incredible design and impressive functional versatility, the jacket serves as both a great look and a sustainable outerwear selection.

The Reën waterproof jacket is packed with additional features such as windproof design, large pockets, waterproof zippers, draw cords and cord locks, and arm vents. Constructed with premium Italian and Japanese fabrics, the jacket is both breathable and PFC-free (per- and poly-fluorinated chemicals).

“Reën was founded on the belief that high-quality, stylish clothing should never come at the expense of our planet,” said Marc Undeberg, Reën’s founder. “Sustainability is at the core of our jackets and can be considered the core of our business.”

Reën is also committed to utilizing renewable packaging, as well as to ensuring that fair wages are paid at every stage of the supply chain. The growing brand also hopes to offset carbon emissions, donate a portion of proceeds to environmentally friendly causes, and offer free repairs to all customers.

Reën will be launched on Kickstarter, and the campaign will be live for 30 days. The Reën team has pledged to plant a tree for every jacket purchase.

For more information regarding Reën’s launch and its unique luxury jacket, please visit: https://www.kickstarter.com/projects/marcundeberg/reen-sustainable-luxury-waterproof-jackets and https://www.reenwear.com/

About Reën

There are very few jackets for men that are both waterproof and elevated. Most men opt for the traditional waterproof shell, which works great but doesn’t tie together an outfit.

Reën makes waterproof jackets from premium Italian and Japanese textiles that are not only waterproof but look great regardless of whether or not it is rainy. The best part? Reën is 100% committed to creating a more sustainable fashion industry.

At every turn, Reën set out to create a truly sustainable product, from renewable textiles and packaging to ensuring that fair wages are paid at every stage of the supply chain, to offsetting carbon emissions, to planting trees with every purchase, to donating a portion of proceeds to environmentally friendly causes, and finally, offering free repairs.

Source: Reën

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October 19, 2023

Apple says it will fix app software problems blamed for making iPhone 15 models too hot to handle

Apple Inc. is blaming a software bug and other issues tied to popular apps such as Instagram and Uber for causing its recently released iPhone 15 models to heat up and spark complaints about becoming too hot to handle.

The Cupertino, Calif., company
AAPL,
+0.30%
said Saturday that it is working on an update to the iOS17 system that powers the iPhone 15 lineup to prevent the devices from becoming uncomfortably hot and is working with apps that are running in ways “causing them to overload the system.”

Instagram, owned by Meta Platforms
META,
-1.23%,
modified its social media app earlier this week to prevent it from heating up the device on the latest iPhone operating system.

Read: The Magnificent Seven could be considered the messy seven after a ‘meh’ third quarter

Uber
UBER,
-0.33%
and other apps such as the video game Asphalt 9 are still in the process of rolling out their updates, Apple said. It didn’t specify a timeline for when its own software fix would be issued but said no safety issues should prevent iPhone 15 owners from using their devices while awaiting the update.

“We have identified a few conditions which can cause iPhone to run warmer than expected,” Apple in a short statement provided to The Associated Press after media reports detailed overheating complaints that are peppering online message boards.

The Wall Street Journal amplified the worries in a story citing the overheating problem in its own testing of the new iPhones, which went on sale a week ago.

Read: Here’s what Apple’s iPhone 15 says about the world

It’s not unusual for new iPhones to get uncomfortably warm during the first few days of use or when they are being restored with backup information stored in the cloud — issues that Apple already flags for users. The devices also can get hot when using apps such as video games and augmented reality technology that require a lot of processing power, but the heating issues with the iPhone 15 models have gone beyond those typical situations.

In its acknowledgement, Apple stressed that the trouble isn’t related to the sleek titanium casing that houses the high-end iPhone 15 Pro and iPhone 15 Pro Max instead of the stainless steel used on older smartphones.

Apple also dismissed speculation that the overheating problem in the new models might be tied to a shift from its proprietary Lightning charging cable to the more widely used USB-C port that allowed it to comply with a mandate issued by European regulators.

Although Apple expressed confidence that the overheating issue can be quickly fixed with the upcoming software updates, the problem still could dampen sales of its marquee product at time when the company has faced three consecutive quarters of year-over-year declines in overall sales.

The downturn has affected iPhone sales, which fell by a combined 4% in the nine months covered by Apple’s past three fiscal quarters compared with a year earlier.

Apple is trying to pump up its sales in part by raising the starting price for its top-of-the-line iPhone 15 Pro Max to $1,200, an increase of $100, or 9%, from last year’s comparable model.

Investor worries about Apple’s uncharacteristic sales funk already have wiped out more than $300 billion in shareholder wealth since the company’s market value closed at $3 trillion for the first time in late June.

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September 30, 2023
Blue Apron notches triple-digit percentage gain while Nike rallies after earnings beat and boosts Foot Locker stock

Here are the day’s biggest movers:

Stock gainers:

Blue Apron Holding Inc.’s stock
APRN,
+133.52%
rocketed by 134% after food-delivery start-up Wonder said it would acquire the company for $13 a share or about $103 million, just a fraction of its $2 billion in 2017 when the company went public.

Shares of Nike
NKE,
+5.96%
rallied 7% as the apparel maker, which is also part of the Dow Jones Industrial Average
DJIA,
reported better-than-expected earnings, news that also lifted shares of European rivals including Adidas
ADS,
+6.22%.

Foot Locker
FL,
+2.71%,
which sells athletic apparel, saw its stock rise by 3%.

Walgreens Boots Alliance Inc.‘s stock
WBA,
+6.39%
rose 6.2% as a top gainer among the Nasdaq 100
NDX
as stocks reacted with gains to the latest inflation data.

Stock decliners:

Bionomics
BNOX,
-11.87%,
whose shares jumped 242% on Thursday after reporting positive results from a mid-stage trial of a treatment for post-traumatic stress disorder, fell 8% in regular trade.

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September 29, 2023
Nike stock rises as profit beats estimates and inventories fall

Nike Inc. on Thursday reported a fiscal first-quarter profit that beat expectations, although revenue came up just shy of Wall Street’s estimates, amid a drop in sales for Converse sneakers.

Shares
NKE,
+0.23%
were up 1.4% after hours.

The athletic-gear giant reported fiscal first-quarter net income of $1.45 billion, or 94 cents a share, compared with $1.47 billion, or 93 cents a share, in the same quarter last year. Revenue crept higher to $12.94 billion, compared with $12.69 billion in the prior-year quarter.

Analysts polled by FactSet expected Nike to report earnings per share of 76 cents, on revenue of $13 billion.

Gross margin fell 10 basis points to 44.2%, weighed by higher product costs and a tougher foreign-exchange backdrop, and offset by “strategic pricing actions.” The company’s inventories fell 10%, as Wall Street seeks progress on efforts by businesses to narrow down their stockpiles of unsold goods.

Sales for Converse shoes were $588 million, down 9%, amid weaker demand in North America. Growth in Asia, however, acted as a counterweight to that decline.

Nike reported earnings as stiff competition — from the likes of Adidas
ADDYY,
-0.51%
and On Holding
ONON,
+0.27%
— and weaker demand for sneakers and clothing keeps prices lower. While analysts say Nike stands to benefit from an enduring shift toward more casual gear, recent outlooks from sporting-goods chains like Foot Locker Inc.
FL,
+0.65%
and Dick’s Sporting Goods Inc.
DKS,
+0.38%
have been more downbeat.

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September 28, 2023
TikTok officially debuts shopping platform, TikTok Shop, to U.S. consumers

TikTok is officially rolling out its TikTok Shop marketplace and services to U.S. users this week.

The shopping marketplace, which has been in testing mode since November 2022, is baked directly into the TikTok video app. As of Tuesday, it features a range of items for sale, such as curling irons, T-shirts and headphones from third-party sellers, in addition to products sold by verified American companies like fashion retailer Revolve and cosmetics company Morphe.

“TikTok Shop will now bring shoppable videos and LIVE streams directly to For You feeds across the country — and give brands, merchants, and creators the tools to sell directly through shoppable content on the TikTok app,” the company said on its website.

The U.S. rollout of the TikTok Shop follows its success in South Asian markets such as Indonesia.

Other e-commerce features being rolled out include a dedicated Shop tab, which allows businesses to display their products on the new product marketplace and customers to easily search and discover promotions, a TikTok spokesperson told CBS MoneyWatch.

“In the Shop tab, product recommendations are showcased via product listings and shoppable content, and customers can manage orders, all within a single tab,” the spokesperson said. About 40% of users currently have the Shop tab available in the app, the company said.

TikTok creator Heather DiRocco talks lawsuit over Montana ban

06:54

Challenges within U.S. market

To be sure, the fledgling platform faces a number of challenges in the U.S., not least of which being that lawmakers here see the Chinese-owned social network as a national security risk and favor banning the app. Other concerns include product authenticity and data security, according to Bezinga.com.

But breaking into e-commerce hasn’t been easy for social media platforms in general. Social networks, such as Instagram and Facebook, have pulled back from initiatives to hock goods directly to users, Digiday reported.

TikTok Shop is on track to lose more than $500 million in the U.S. this year, according to an August report from The Information.

Still, TikTok has a massive user base to which to sell. The app has skyrocketed in popularity in the U.S., amassing more than 150 million American users, the company said in a statement earlier this year. It has also become the second-most popular app among teens after YouTube, a Pew Research study from 2022 shows.

TikTok Shop has already experienced massive success in South Asia. In Indonesia alone, TikTok has more than 100 million active users, who spend more than 100 minutes on the app a day, on average, according to Bloomberg.

The shopping platform strives to reach $20 billion in merchandise sales this year, more than quadruple that from last year, Bloomberg reported. The U.S. market, where retail e-commerce sales totaled $871 billion in 2021 and have grown at an average rate of 16% annually since 2011, according to data from advisory firm FE International, could play an essential part in TikTok Shop’s achieving that goal.

More from CBS News

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September 12, 2023
Alibaba CEO warns of being ‘displaced’ if the Chinese tech giant doesn’t keep up in AI

Signage at the Alibaba Group Holding Ltd. booth at the Smart China Expo in Chongqing, China, on Monday, Sept. 4, 2023.

Qilai Shen | Bloomberg | Getty Images

Alibaba needs to be “user first” and “AI-driven,” new CEO Eddie Wu told employees on Tuesday, as he laid out the strategic priorities for the Chinese tech giant.

Wu, who is just three days into the job as Alibaba chief executive, called for the e-commerce firm to “adopt a start-up mindset” as he looks to steer the company back to growth following one of the most tumultuous times in its 24-year history.

“Times are changing, and so must Alibaba! As the world progresses, Alibaba needs to evolve even faster!,” Wu said in a letter to employees that was seen by CNBC.

Wu, one of Alibaba founder Jack Ma’s close confidants, started as CEO on Sept. 10, taking over from Daniel Zhang, who stepped down from the role to focus on heading up the cloud computing business. However, in a surprise move, Zhang this week quit as CEO of the cloud business with Wu taking over in the interim.

It comes months after Alibaba split its company into six different business groups, the biggest shakeup in its history.

Wu said Alibaba’s two main strategic focuses will be “user first” and “AI-driven.” The company will “reinforce” its strategic investments in three areas.

The first it calls “technology-driven internet platforms.” Wu said that Alibaba’s business should “seek out the most open and collaborative relationships,” even with competitors. This is a different approach from Alibaba which has tended to try to keep users within its ecosystem of products.

Wu also touted the need to invest in artificial intelligence. Alibaba’s cloud unit has tried to position itself as a leader in AI inside China as it looks to reignite growth in the business.

“Each of our businesses generates massive numbers of use cases; therefore, we must transform these use cases into applications for AI technology, driving breakthrough user experience and business models through technology innovation,” Wu said.

“If we don’t keep up with the changes of the AI era, we will be displaced.”

Alibaba Cloud has its large language model called Tongyi Qianwen, released earlier this year. An LLM is an AI model trained on huge amounts of data and underpins chatbot applications. It’s the same type of model that OpenAI’s ChatGPT is based on.

Wu also said Alibaba needs to continue to invest in “globalization.”

Alibaba will also look to promote younger talent. Within the next four years, the company will promote those born after 1985 and the 1990s “to form the core of our business management teams,” Wu said.

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September 12, 2023