Hey Snackers,
Dave & Buster’s, the Chuck E. Cheese of the adult world, wants you to sleep over. D&B is giving away a one-night stay in a custom arcade suite feat. Pac-Man and a private bartender.
Stocks rebounded to kick off the short week, with the S&P 500 rising 2.5% after its worst week in two years. Today, Fed Chair Powell is due on Capitol Hill for his semiannual congressional testimony. Investors will have their ears peeled for any July rate-hike updates.
Pringle and ready to mingle… Frosted Flakes and Pringles are breaking up. Cereal icon Kellogg said it’s splitting into three publicly traded companies: snacks, cereal, and plant-based meat (think: MorningStar patties). Kellogg became a snack giant thanks to faves like Cheez-Its and RxBars. Now it’s spinning off categories in hopes that specificity will boost profitability. The three biz lines are expected to go solo next year.
Cereal killer… Kellogg’s cereal sales have been slipping for years as Americans ditch Fruit Loops for less neon-colored options. But snacking is on the up and up after spiking during lockdowns. Now:
Broader isn’t always better… Sometimes cereal problems should stay in the cereal aisle. With the split, Kellogg hopes to boost cereal margins (by fixing supply issues), expand plant-based market share (by attracting pure-play investors), and boost snack profits (by investing in new varieties). The strategy’s taking off: GE and Johnson & Johnson are breaking up biz categories in an attempt to boost profits, and Ford and Volvo plan to spin off their EV businesses.
Camping out at the airport Starbucks... Your plane might not arrive, but at least there are cake pops. A new federal holiday + Father's Day + national labor shortage = the perfect recipe for a travel-pocalypse. US airlines have canceled or delayed 35K+ flights since Thursday, a #fail that’s becoming a theme as travel rebounds.
Postponed till next summer... Yesterday was the first day of summer, but airlines have been feeling the heat for a while. Back in April 2020, airlines got $25B in bailouts from the US gov't so they could continue paying their hundreds of thousands of employees. Under the terms, airlines couldn't make any job cuts until October 2020. Cue October, and tens of thousands were furloughed or cut.
Ramping up’s harder than ramping down… When demand was corona-crushed, airlines skimmed their workforces too much. Now they’re offering incentives to get people back: American has offered rounds of raises and bonuses to regional employees, while Alaska and United are offering aspiring pilots financial aid at newly opened flight-training schools. But it could be too little too late: airline staff shortages could last well into next year.
Authors of this Snacks own: shares of Starbucks, Snap, Tesla, GM, Amazon, Walmart, Ford, Twitter, Delta, and Uber
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