Wednesday Nov.02, 2022

👕 Fortnite’s fashion Poloverse

Welcome to the Poloverse (Courtesy of Ralph Lauren)
Welcome to the Poloverse (Courtesy of Ralph Lauren)

Hey Snackers,

Trick-or-treaters looking to sweeten their jackpots went home empty-handed Monday after no one won the Halloween Powerball drawing. But the lotto isn't dead and buried: the estimated prize for today's drawing is $1.2B.

Sometimes good news is bad news: stocks ticked down yesterday after fresh labor data suggested the US job market was still piping hot despite aggro rate hikes. Speaking of: investors have eyes on today’s Fed hike decision (expected to be another 75 basis points).

Llama

Ralph Lauren launches a Fortnite fashion collab as retailers turn to “phygital” partnerships to lure younger shoppers

Old money, new digs… Ralph Lauren’s iconic horsey jockey is now riding a cartoon llama. Ralph Lauren and Epic Games’ Fortnite are teaming up on a physical and digital (#phygital) fashion line. The physical Polo Stadium Collection launches today on RL’s site (think: ’90s-themed polos and $70 hoodies). On Saturday, the digital collection is expected to hit Fortnite with avatar outfits priced about $6. Both collections feature Polo’s first redesigned logo (feat. Fortnite llama).

  • For RL: With sales relatively flat over the past decade, the old-school retailer plans to raise prices and focus on new customers for growth. The prep star hopes to tap into Fortnite’s 400M users.
  • For Fortnite: As gamers splurged on “Spider-Man” skins and accessories, Fortnite's “V-Bucks” virtual currency helped drive sales last year to a record $5.8B. Brand partnerships could help supercharge growth.

Pop the collar (in the metaverse)… Ralph Lauren is the latest fashion house to partner with popular online platforms as brands look to capitalize on digi-fashion. Last year Balenciaga became the first major fashion brand to launch a phygital collection with Fortnite (see: $725 hoodies). Meanwhile, Ralph Lauren made its digital fashion debut with “Polo Shops” in Roblox, which let players purchase digi-clothing for their avatars.

Retailers are bridging the “phygital” gap… Virtual-apparel collabs with brands like Disney's Marvel, the NFL, and Nike have already earned tens of millions of dollars for Fortnite. The metaverse allows traditional retailers like Ralph Lauren to reinvent their brands for a fresh audience. The times they are a-changin’: online transactions now make up a quarter of RL’s sales and could reach 33% in the next few years thanks to younger shoppers.

Slick

Oil profits keep gushing as high prices stick, drawing criticism from Biden ahead of midterms

NurPhoto/Getty Images

Not everyone’s pumped… Oil profits are booming and President Biden isn’t pleased. This week oil giants Chevron, BP, Saudi Aramco, Marathon Petroleum, and Phillips 66 posted jaw-dropping profits thanks to rising prices. Exxon tripled its quarterly profit to a record. Though gas prices have fallen from summer peaks, they’re still much higher than when Biden took office.

  • Harsh words: This week Biden accused gas titans of “profiteering” off Russia’s war on Ukraine and threatened them with a windfall tax (a one-time tax on excess profits).
  • Empty promises: Only Congress (which won’t be in session till January) can pass a new tax. Plus, analysts expect Congress to remain divided after next week’s midterms.

You don’t need a meteorologist… to know which way the windfall blows. Biden’s not the only one monitoring oil profits: lawmakers in Greece, Hungary, Italy, Romania, Spain, and the UK have implemented windfall taxes. But some investors are seeing the glass as half full:

  • Buffett’s gas: In recent months Warren Buffett’s Berkshire Hathaway has boosted its massive stake in Chevron and Occidental, making oil one of its largest investments. Berkshire has gained $13B on those holdings in the past few years.

You can’t fill a Camry with stock buybacks… but oil execs insist they’re returning their profits to Americans through stock dividends and share buybacks — and say taxes could cut into investors’ returns. Oil giants Chevron, BP, Exxon Mobil, Shell, and TotalEnergies spent $20B+ on buybacks in the first half of this year and are expected to splurge more in the second half. Their shares have risen an average of 37% this year, while the S&P 500 has fallen 20%.

What else we’re Snackin’

  • ETA: The ride rebound is as real as rush hour: Uber shares popped 13% yesterday after it reported that quarterly revenue surged 72% from last year as users splurged on rides and pad thai deliveries.
  • Bookish: A federal judge blocked Penguin Random House from buying rival publishing house Simon & Schuster for $2.2B. The DOJ challenged the mega literary merger in August, saying it would hurt competition.
  • Swift: Amazon expanded its ad-free music and pod catalog for Prime members (100M songs vs. 2M). It’s a similar selection to Spotify’s free tier, minus ads. That could lure listeners from rivals.
  • Rocket: Twitter isn’t the only thing Elon’s been up to: Musk’s SpaceX launched the world’s most powerful rocket yesterday for a Space Force mission, marking the company’s 50th launch this year.
  • Boost: After stronger-than-expected earnings, Pfizer boosted its 2022 forecast for Covid-vax sales and said its drug pipeline should help offset declines (Covid-vax sales were down 66% year over year).

Wednesday

  • The Fed’s interest-rate announcement
  • Earnings expected from: Qualcomm, CVS, Booking, Estee Lauder, GSK, Humana, MetLife, Ferrari, Allstate, Yum! Brands, and eBay

Authors of this Snacks own: shares of Amazon, CVS, Disney, Exxon, Twitter, Spotify, and Uber

ID: 2569966

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