Last week Kentucky Fried Chicken (NYSE:YUM) got sued for frying foods in oils and now the Center for Science in the Public Interest is planning to campaign against Starbucks (NASDAQ:SBUX) because of the high-calorie, high-fat products it sells. A 20-ounce Venti banana mocha Frappuccino contains 720 calories and 11 grams of saturated fat, and a banana cream crunch bar weighs in at 630 calories and 25 grams of saturated fat. By comparison, a Big Mac has 560 calories and 11 grams of saturated fat.
Circuit City (CC) swung to a profit and backed its sales and profit forecast for the year. The companyt earned $6.4 million versus losing $13.1 million last year in the same period. Net sales rose 17.5% to $2.62 billion, while sales at stores open at least one year rose 14.6%. Domestic segment Web-originated sales grew 85%. Gross profit margin declined 57 basis points. Circuit City forecast fiscal year net sales growth of 7% to 11%, and domestic same-store sales growth of 5% to 7%. The forecast is based on continued sales of items such as flat panel television sets, notebook computers, portable music players and related accessories.
Federated Department Stores (FD) will end its bridge financing used to acquire May Department Stores in August 2005. Federated also resumed its $670 million share buyback program.
Thomans Weisel downgrades Michaels Stores (MIK-OLD) to Peer Perform based on the uncertainty surrounding investigations into the company's stock option grant practices, which they believe may hinder the sale process.
Susquehanna maintains their outlook for eBay (NASDAQ:EBAY) to have a seasonally weak 2nd quarter results due July 19. The firm is citing: 1) a mix shift to store inventory format listings, which historically convert to sales at lower rates and prices than core listings; and 2) potential conversion declines for store inventory relative to 1st quarter. However, firm believes that any near-term lumpiness in results as EBAY gets poised to launch its new products represents an attractive entry point, saying the combination of the eBay Express product cycle, synergies from the acquisition of VeriSign's payment gateway, and new advertising rev should make EBAY a strong second-half story.