Hey Snackers,
It's National Avocado Day. Prices of "the good fat" from Mexico have more than doubled from last year, but some spot near you probably has a "free guac" situation right now. Take advantage.
Markets barely budged Tuesday despite the biggest week of earnings of this quarter.
Sweat
Under Armour drops 14% because it ignored the athleisure life
Home court advantage is over... Under Armour's sales abroad are up, but its share of the US activewear market has slipped from 6.4% to 5.6%. Its share of footwear fell, too. The stock had been up 55% this year, but just suffered its worst day in 2 years. Someone please protect this house.
Too much “ath” not enough “leisure"... Under Armour doubled-down on super technical apparel to dominate the sweat-wicking athlete lifestyle. But consumers want more fashion weaved into their workout gear so that they're brunch-ready. Now analysts think UA is a “long way” behind its rivals. Here's what they're up to:
- Lululemon: Launching experiential stores and adding branded shampoos.
- Puma: Selena Gomez landed her own collaboration collection.
- Nike: Taking stands on social issues.
- Adidas: Beyoncé is designing sneakers.
Time to rebrand Under Armour... We noticed this quote from founder/CEO Kevin Plank: Under Armour's marketing needs to get "louder." Actually, it's the opposite — UA needs to get smarter. Perfect case: Under Armour's relationship with women. It's invested in female-focused marketing, but brand equity among women has barely budged. More isn't always more.
Evolved
Apple is no longer an iPhone company — and the stock jumped 4%
'Siri, what am I?'... Not an iPhone company. After years of dominating Apple's financial statements, a milestone was just hit: The iPhone now makes up less than 50% of Apple's sales for the first time since 2012. Big moment. Let it sink in. And the next iPhone coming this fall probably won't have the futuristic 5G internet-of-everything network (it's not coming until 2020 for Apple).
Apple is now a 2-part company... iPhones vs. everything else.
- iPhone sales fell 12%: ⬇️That number is way down because the price has surged to "should-I-just-get-a-laptop" levels, and people don't feel the need to iUpgrade as often.
- Everything else (especially accessories) jumped 17%: ⬆️ Mac, iPad, wearables, and services (Apple Music, Apple News+) are helping drive recurring revenues.
- Fun fact: That wearables biz? It includes AirPods and Apple Watch. And the whole wearables division is now the size of a Fortune 200 company.
Apple has 1 innovative new thing right now... (and we already kinda knew about it). The joint credit card with Goldman Sachs. We now know the titanium-clad (there's also a digital version) humble-brag collaboration will arrive in August. In Apple's world of slowing iPhones and growing services, it's creatively focused on privacy:
- There's no card number — it updates with a new one every transaction so even Goldman can't track your shopping.
- And it doesn't sell that data to anyone else.
- Plus, it's all 2-factor authenticated — aka finger or facial recognition.
Pricing
Shaving just cost Procter & Gamble $8B because Gillette couldn't keep up
Your sink cabinet has a soul... and it's filled with Tide, Febreeze, Bounty, and Tampax. They're some of the VIP brands behind Procter & Gamble. The stock rose 4% after its earnings were released, but P&G also reported one huge number: a $5.4B loss — that's because it reevaluated and adjusted the value of its Gillette razor brand big-time:
- 2005: P&G acquires Gillette for a smooth $57B.
- Right now: P&G has adjusted Gillette's valuation down by hefty $8B.
Blame beards... P&G claims "lower shaving frequency" is behind Gillette's decline, jumping on the "because Millennials" bandwagon. Shaving happens less often (down 11% in the last 5 years) and with cheaper razors — Dollar Shave Club (now owned by Unilever) and Harry's (acquired by Edgewell Personal Care) have snagged Gillette's market share. Sophisticated, "Mach-filled," 20-blade razors are out.
Pricing is power... Despite #GilletteProblems, we mentioned P&G's stock rose 4%. That's because sales surged 7% — the biggest jump in over a decade. Half that rise comes from P&G charging higher prices from detergent to tampons (the other half is just selling more of them). The conglomerate has been raising prices, but consumers keep paying. That's power you can't buy.
What else we’re Snackin’
- Recycled: Coke and Pepsi are quitting the plastics lobby that pushes the stuff
- Cover-up: L'Oréal's sales slowed as the influencer-powered makeup boom loses its mojo
- Security: United Airlines invests in speed-up airport security startup Clear (fun fact: Delta's already an investor)
- Moving: Compass, the tech-ish real estate platform, raises $370M to hit a $6.4B valuation on the way to an IPO
- #$&!: Ryanair's CEO tells Boeing to get its 's--- together'
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