Today - Sunday, April 26, 2015
- Coca-Cola (NYSE:KO) says it has no plans to change the sweetener for Diet Coke away from aspartame.
- PepsiCo and other beverage sellers have shifted some focus to the use of natural sweeteners and increased their investment in vegetable and protein drinks.
- Sales of Diet Coke fell 6% Y/Y in Q1 to trail the pace seen by the Sprite, Coke, and Fanta brands.
- During the earning call last week, Coca-Cola execs said finding the right path to grow Diet Coke sales was still a "work in progress" amid shifting consumer tastes.
- Some beverage industry analysts have noted millennials tend to hop around new upstart brands (energy/protein/fruit) in the same way they prefer sampling craft beers instead of locking in on cases of Bud Light and Budweiser.
- Coca-Cola earnings call transcript
- Related: PepsiCo rethinks sweeteners (April 24)
Saturday, April 25, 2015
- Airline stocks continue to outperform in 2015 as Q1 reports show strong efficiency gains and significant fuel expense savings.
- Investors get a crack at a sector ETF this week with the launch of the U.S Global Jets ETF (Pending:JETS) on April 30.
- A few tidbits from the fund company on the airline industry are listed below.
- Global ancillary revenue is a major source of growth in the the sector. The add-on sales (a la carte food/drink, advertising, frequent flyer programs, service commissions, baggage fees) are up to $31.5B after airlines only took in about $2.5B in 2007.
- Fleet upgrades and technology initiatives continue to boost efficiency.
- A shortage of pilots could reel in some of the concerns on capacity increases.
- Previously: Fuel savings and earnings give lift to airline stocks (April 24)
- Airline stocks: AAL, UAL, DAL, RYAAY, OTCPK:CPCAY, OTCPK:SINGY, CEA, ZNH, CPA, GOL, LFL, OTCPK:DLAKF, OTCPK:QUBSF, ALK, HA, OTCPK:AIRYY, OTCPK:MLYAF, OTCPK:AFLYY, VLRS, LUV, OTC:RYAOF, RJET, VA, LFL, SAVE, ALGT, CEA, OTC:EJTTF, OTCQX:ESYJY, AVH, OTC:AFRAF, OTCPK:ICAGY, AVH, OTCPK:JAPSY.
- Volkswagen (OTCQX:VLKAY) Chairman Ferdinand Piech resigned from the company today in an unexpected twist to the leadership crisis at the automaker.
- Deputy Chairman Berthold Huber will take on the chairman position until the board can elect a replacement.
- Previously: Volkswagen board backs CEO (April 17)
- Previously: VW looks to flatten leadership crisis (April 20)
- Starbucks (NASDAQ:SBUX) reports all stores are operating as usual after a national sales register outage disrupted functions last night and led to thousands of stores closing early.
- The point-of-sale crash struck after a daily system refresh.
- The Starbucks outage created a stir on Twitter on widespread reports of stores giving away free food and drinks.
- Earlier this week, tech initiatives were a focal point of Starbucks earnings report and conference call presentation and Q&A.
- Shares of Starbucks were up 8.86% last week to close at $51.84.
- Previously: Powerful comp lifts Starbucks (April 23)
- Previously: Tech initiatives at Starbucks gain momentum (April 23)
Friday, April 24, 2015
- Ford (F) issues a recall for 390K vehicles under both the Ford and Lincoln brand.
- The issue is with faulty door latches that could lead to an unsafe driving condition.
- The recall covers 2012- 2014 Ford Fiesta, Ford Fusion, and Lincoln MKZ vehicles made in Mexico.
- The last little part is sure to catch the attention of the UAW.
- Related: UAW reacts to production shift to Mexico (Apr. 23 2015)
- Shares spiked briefly for Charter Communications (NASDAQ:CHTR) this hour -- and Time Warner Cable has leapt up to +5.9% -- on word that Charter's advisers have already started pursuing friendly talks with TWC for a speedy acquisition.
- Executives haven't spoken yet and so there's no price or structure to debate. Though one source reports TWC is already balking at the debt level of the combined entity.
- Charter's hostile bid for Time Warner failed before, but to make a friendly deal, it may have to come with more than Comcast's ~$158.82/share offer to make it work.
- Previously: Comcast, TWC move higher premarket on merger's end (Apr. 24 2015)
- Previously: It's over: Comcast officially ends $45B pursuit of TWC (Apr. 24 2015)
- Shake Shack (SHAK +6.6%) is up 7% on strong volume to carve out yet another all-time high.
- Traders think the momentum run-up in shares today is tied to a broader rally in restaurant stocks after Starbucks, Chipotle, Domino's Pizza, and Dunkin' Brands all reported strong growth.
- The market cap of Shake Shack and its 64 stores now exceeds the valuation level of Denny's and Red Robin Gourmet Burgers combined.
- Callaway Golf (ELY -0.9%) trades lower after revenue fell 19% Y/Y in Q1.
- Wood sales fell off 28% as the launch of a new Big Bertha was pushed back.
- F/X swings also impacted the company negatively by a larger degree in the quarter.
- During the earnings call, execs disclosed lowered revenue guidance for the year, but said increased golf exposure this month should be a positive factor.
- Earnings call transcript
- Previously: Callaway Golf beats by $0.11, misses on revenue (April 23)
- Guggenheim Partners thinks expectations are running a bit hot on Costco (COST +0.6%).
- The investment firm takes its estimate for FY16 EPS down to $5.55 from $5.70 after working out the impact of shrinking gas margins and F/X pressure.
- Guggenheim acknowledges the benefit of Costco's new deal with Visa and Citi, but thinks share price has more than factored in the cost savings.
- Costco's FQ3 report is due out on May 27.
- Shareholders with Wynn Resorts (WYNN +1.7%) picked John Hagenbuch and J. Edward Virtue to fill the two board seats up for election in a development that leaves Elaine Wynn on the outside looking in.
- Vote totals haven't been disclosed yet.
- Elaine Wynn is the 2nd largest shareholder of the company.
- Wynn Resorts annual meeting materials
- Luxottica (LUX +0.8%) co-CEO Massimo Vian says it will partner with Google on a new version of Google Glass.
- The exec also tipped off that the company is still moving ahead with its partnership with Intel on a new smart glasses product for 2016.
- Shares of Luxottica are up 19.3% YTD with the potential for wearable technology revenue down the road helping to give them some momentum.
12:00 PM| Comment!
- The early read on Netflix's (NFLX +0.2%) launch in Australia looks favorable, according to The Hollywood Reporter.
- Broadband execs in the nation cite an "absolutely amazing" impact on traffic levels from the Netflix launch last month.
- Local competitors have benefited from the increase in awareness in streaming and are playing nice with Netflix on the promotional front.
- The penetration rate for streaming services in Australia is expected to explode this year.
- A long-term projection from Credit Suisse on Australia calls for the streaming industry to generate $544M a year with Netflix holding a 40% market share.
- The pizza and donut rally is still on a day after Domino's Pizza (DPZ +3.4%) and Dunkin' Brands (DNKN +5.6%) dazzled with their Q1 reports.
- While Dunkin' received the extra jolt of inclusion in the S&P 400, both stocks are being identified by retail analysts as benefiting from shifting consumer trends toward on-the-go and mobile.
- Krispy Kreme Doughnuts (KKD +2.9%), Rave Restaurant Group (RAVE +11.3%), and Papa Murphy's (FRSH +1.4%) are catching some sympathy bids as well.
- Previously: Sizzling comps at Domino's Pizza in Q1 (Apr. 23 2015)
- Previously: Dunkin' Brands +7% after earnings beat and guidance lift (Apr. 23 2015)
- Previously: DNKN +2.3% on S&P 400 addition; WD +3.1% on S&P 600 addition (Apr. 23 2015)
- Shares of DeVry Education (DV -12.2%) crumble after the company reported a drop in revenue during FQ3 and unveiled a plan to convert 14 DeVry locations to online only.
- The company's string of acquisition helped it boost total enrollment compared to a year ago, but net income fell 15% during the quarter.
- Previously: DeVry Education beats by $0.02, misses on revenue
- The airline stocks sector is active today as oil prices retreat and the first batch of Q1 earnings reports come in promising.
- Fuel costs at American Airlines (AAL +2.7%) fell 42% during Q1, while the expense was down 34% at Hawaiian Holdings (HA +11.4%).
- Efficiency metrics in the sector have also impressed for the most part if F/X swings are backed out.
- United Continental (UAL +3.1%), Alaska Air Group (ALK +2.8%), Delta Air Lines (DAL +1.9%), and Virgin America (VA +2.2%) are all showing strength.
- PepsiCo (PEP -1%) says it will remove aspartame from Diet Pepsi beginning in August.
- The company is making the move to adapt to consumer tastes, not out of safety concerns.
- Sucralose and acesulfame potassium will be used in the U.S. to sweeten Diet Pepsi.
- Pepsi True is a relatively new product out from the beverage seller using the natural sweetener stevia.
- PepsiCo CEO Indra Nooyi tackled the question of changing consumer dynamics during the company's earnings call yesterday (transcript).
- She noted perception on what is "good for you" has changed from diet sodas to organic non-GMO.
- Perhaps with an eye on millennials she mentions different corridors of fruit and vegetable, protein, grains, and carbs in the soda category. Rival Coca-Cola still stacks its brands under calorie counts.
10:15 AM| Comment!
- B&G Foods (BGS +9.3%) rallies following a vibrant Q1 earnings report.
- The company cited positive volume and pricing trends during the quarter across a wide swath of its brands.
- Gross margin slipped 160 bps to 31.0% due in part to the Ortega and Las Palmas recalls which occurred.
- 2015 EPS guidance was reaffirmed by the company at $1.48 to $1.55 vs. $1.51 consensus.
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