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Tag: Market volatility

  • Sobeys/FreshCo parent company, Empire reports earnings – MoneySense

    Sobeys/FreshCo parent company, Empire reports earnings – MoneySense

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    Growing grocery delivery business and other opportunities

    The company also said it’s hitting pause on a new fulfilment centre to help save costs in its grocery delivery business Voilà, among other changes. 

    “While the market penetration of Voilà continues to be strong, the size and growth of the Canadian grocery e-commerce market is smaller than anticipated, resulting in higher net earnings dilution than originally estimated,” Empire said in its press release. The company says it’s focusing on driving volume and performance at its three existing centres. 

    Empire also prematurely ended its mutual exclusivity agreement with technology provider Ocado, as part of changes it’s made to lower costs and increase flexibility. The changes “are expected to have a significant, positive impact on Voilà’s profitability in fiscal 2025 and 2026,” Empire said.
    The company says its profit amounted to $0.86 per diluted share for the 13-week period ended Aug. 3.

    The result was down from a profit of $1.03 per diluted share in the same quarter last year when its bottom line was boosted by the sale of 56 gas stations in Western Canada.

    Analyst take on Empire’s quarter

    RBC analyst Irene Nattel said Empire’s operating results came in “a tick above forecast as consumer value-seeking behaviour stabilizes.” She said in a note that the company continues to execute on its strategy to maximize revenue in its full-service stores, despite the broader momentum in discount stores, though she added Empire is also growing its discount presence. Nattel has previously said Empire is overly exposed to the full-service part of the grocery sector compared with its competitors, giving it a relative disadvantage amid heightened price sensitivity. 

    Empire earnings highlights

    Here’s a breakdown of the results this week.

    • Empire Company (EMP/TSX): Earnings per share of $0.63 (versus $0.62 predicted). Revenue of $7.41 billion (meeting the prediction).

    Sales for what was the company’s first quarter totalled $8.14 billion, up from $8.08 billion a year earlier. Same-store sales for the quarter were up 0.5%, while same-store sales, excluding fuel, increased 1%.

    Medline said a year and a half after completing the rollout of loyalty program Scene+ across Canada, the program has more than 15 million members, with those members spending on average 55% more than non-members. “Scene+ has significantly boosted our incremental sales and margin compared to our prior loyalty program,” he said. 

    On an adjusted basis, Empire says it earned $0.90 per share in its latest quarter, up from an adjusted profit of $0.78 per diluted share in the same quarter last year. Shares in Empire closed up 5.6% on the Toronto Stock Exchange at $40.62. 

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    The Canadian Press

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  • Why did the stock markets fall? – MoneySense

    Why did the stock markets fall? – MoneySense

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    Anxiety over the U.S. economy

    Despite some signs of cooling, the U.S. economy kept chugging along even with higher rates, outpacing Europe and Asia. Then came last week’s economic reports.

    Weak reports on manufacturing and construction were followed by the government’s monthly report on the job market, which showed a significant slowdown in hiring by U.S. employers. Worries that the U.S. Fed may have kept the brakes on the economy too long spread through the markets.

    Big Tech movements

    A handful of Big Tech stocks drove the market’s double-digit gains into July. But their momentum turned last month on worries investors had taken their prices too high and expectations for their profit gains had grown too difficult to meet—a notion that gained credence when the group’s latest earnings reports were mostly underwhelming.

    Apple fell more than 5% Monday, after Warren Buffett’s Berkshire Hathaway disclosed that it had slashed its ownership stake in the iPhone maker. Nvidia lost more than $420 billion in market value Thursday through Monday. Overall, the tech sector of the S&P 500 was the biggest drag on the market Monday.

    Japan’s rollercoaster

    The Nikkei suffered its worst two-day decline ever, dropping 18.2% on Friday and Monday combined. One catalyst for the outsized move has been an interest rate hike by the Bank of Japan last week.

    The BoJ’s rate increase affected what are known as carry trades. That’s when investors borrow money from a country with low interest rates and a relatively weak currency, like Japan, and invest those funds in places that will yield a high return. The higher interest rates, plus a stronger Japanese yen, may have forced investors to sell stocks to repay those loans.

    What should investors do now?

    The prevailing wisdom is: Hold steady. Experts and analysts encourage taking a long view, especially for investors concerned about retirement savings. “More often than not, panic selling on a red day is generally a great way to lose more money than you save,” said Jacob Channel, senior economist for LendingTree, who reminds investors that markets have recovered from worse sell-offs than the current one.

    Bitcoin was back up to $56,490 Monday morning after the price of the world’s largest cryptocurrency fell to just above $54,000 during Monday’s rout. That’s still down from nearly $68,000 one week ago, per data from CoinMarketCap.

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    The Canadian Press

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  • How Adaptive Leaders Find Success During Market Volatility | Entrepreneur

    How Adaptive Leaders Find Success During Market Volatility | Entrepreneur

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    Opinions expressed by Entrepreneur contributors are their own.

    If there is one thing we know for certain (other than death and taxes) it’s that volatility and the markets go hand in hand. We’ve seen the stock market crash of 1929, the dot-com bubble of the early 2000s, the financial crisis of 2008, the recent surge in blockchain and its related cryptocurrency rise and fall, the Covid-19 pandemic, and global tensions all demonstrate periods of marked volatility.

    My area of specialization, which is the Small-Micro Cap IPO market, has recently been extremely volatile. 2021 emerged as a robust year for initial public offerings, driven by favorable economic conditions, a surge in technological innovation, strong investor appetite and the popularity of SPACs. 2022 and 2023 on the other hand, have been two of the worst years in the IPO sector in past decades, primarily due to significant market corrections influenced by economic factors, geopolitical events and heightened investor caution.

    Throughout my 35-year journey as an entrepreneur, I’ve traversed diverse experiences, from encountering significant hardships — particularly during the tumultuous days of the great recession — to celebrating success. These hardships and setbacks became powerful lessons in resilience, compelling me to explore innovative solutions when adversity was overpowering. In these moments, I gleaned profound insights into the pivotal importance of adaptability.

    In my current role, as the CEO of Exchange Listing, I’ve had the privilege of leading companies through the ever-changing landscape of IPOs, while at the same time scaling my business. Over the years, I’ve learned that in this volatile environment, adaptive leadership is not just a choice; it’s a necessity.

    Related: Adaptive Leadership Lessons For Transformational Growth

    The challenges of making informed decisions during market volatility

    Market volatility refers to the degree of variation in financial market prices over time. It often stems from a combination of factors, including economic data, geopolitical events, investor sentiment and unexpected events like natural disasters or, as we all learned in 2020, global pandemics. Volatility is typically measured using metrics such as standard deviation or beta.

    Navigating the intricacies of making informed decisions during market volatility presents a formidable challenge. Market turbulence, shaped by various factors such as economic data, geopolitical shifts and unexpected events, can trigger emotional responses that lead to impulsive choices. Short-term focus can eclipse long-term objectives, compounded by the overwhelming flood of information. In times of volatility, the natural inclination may be to minimize risk, but this approach could lead to missed opportunities. Successful decision-making in such an environment requires adaptability, resilience and a commitment to remaining well-informed.

    As an adaptive leader, in the small/micro-cap IPO sector, my decision-making process is grounded in gathering real-time market intelligence from diverse sources. This strategy ensures that I maintain a high level of awareness and stay continually informed of the most recent developments in the dynamic, ever-changing IPO financial landscape.

    The importance of triangulating information from trusted and relevant sources ensures that my understanding is comprehensive and reliable. Before implementing any strategies or decisions, I prioritize stress-testing my theories with my advisors and team, valuing their insights and perspectives. I have found that a collaborative approach helps refine and strengthen my choices and avoid making emotion-based decisions.

    Understanding the adaptive leader

    Adaptive leadership is distinct from other leadership theories and styles because it focuses on mobilizing individuals and organizations to adapt to changing environments and address difficult issues. It encourages leaders to view challenges as opportunities for growth and learning rather than simply seeking technical solutions.

    The term “adaptive leadership” was developed by Ronald Heifetz and Marty Linsky at Harvard University’s Kennedy School of Government. Entrepreneurs are naturally adaptive leaders who seek out and thrive in environments characterized by uncertainty, rapid change and multifaceted challenges. Their ability to identify opportunities within chaos, pivot when needed and continuously learn from setbacks positions them as adaptive leaders by nature.

    Entrepreneurs possess the resilience to confront unexpected obstacles head-on, the agility to adjust strategies in response to shifting market dynamics and the willingness to embrace innovation and experimentation as integral parts of their leadership journey. This innate adaptability enables entrepreneurs to navigate turbulent waters, drive innovation and lead their ventures toward success amidst complexity and ambiguity.

    Taking time on the balcony, a concept coined by Heifetz and Linsky provides adaptive leaders with a valuable vantage point to gain perspective and assess complex situations objectively. It allows them to step back from the heat of the moment, observe patterns and make more informed decisions. This reflective practice is a strategic advantage, enabling adaptive leaders to navigate through ambiguity and volatility with greater clarity and insight. I value my time on the balcony, where I look to gain perspective when tackling pressing challenges, looking backward and forward at the same time.

    Related: Why an Adaptive Mindset Matters for Entrepreneurs

    Adaptive leadership in action

    In the throes of market volatility, adaptive leadership takes on even greater significance for entrepreneurs. It’s not just a theoretical concept; it’s a practical necessity for navigating the turbulent waters of today’s business environment. As entrepreneurs, we know that market volatility is the new normal, and adaptive leadership is the compass that helps us chart our course through these challenging times.

    Consider this scenario: Market dynamics are in constant flux, and as entrepreneurs, we’re tasked with making pivotal decisions. Adaptive leadership starts with a deep understanding of ourselves and our teams, allowing us to pivot swiftly when faced with unexpected challenges. It’s about being agile, not just in response to market turbulence but as an integral part of our leadership style. During bouts of market volatility, adaptive leaders see these disruptions as opportunities for innovation and growth. For instance, when faced with economic downturns or supply chain disruptions, adaptive leaders and entrepreneurs might rethink their business models, explore new revenue streams or harness technology to adapt to changing market conditions. This proactive, agile mindset is what sets us apart and helps us thrive even in uncertain market environments.

    Market volatility is a constant presence in business. In recent years, we have seen how market volatility can be influenced by countless factors — and while some may struggle, others flourish amid this turbulence. These individuals, the adaptive leaders, possess a unique skill set that equips them to navigate this volatility and make informed decisions that drive long-term success. The ability to adapt and make informed decisions in an ever-changing financial landscape is a sign of leadership excellence. Adaptive leaders not only survive market volatility but thrive in it, emerging stronger and more resilient with each challenge they face.

    Related: How to Demonstrate Leadership Through Market Volatility

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    Peter Goldstein

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