Wednesday Jul.24, 2019

Starbucks wants to sell its app brains

"_Don't touch my toys, brah_"
"_Don't touch my toys, brah_"

Hey Snackers,

$475,500. Nike's “waffle shoe” just became the most expensive sneaker ever auctioned.

Stocks popped after another hearty serving of earnings reports – now Facebook and Tesla are due up today.

Play

Hasbro surges 10% (it's not just The Avengers)

Save me, Spiderman... Or send Hasbro. The Rhode Island-based toy legend jumped 10% Tuesday after its 2nd quarter earnings. It announced it's shifting some of its toy production to India and Vietnam to avoid tariffs — it aims to reduce the amount made in China from 67% to 50%. But let's talk about its toy collection.

Hasbro's, like, a HUGE Marvel fan... For over 10 years, it's been the exclusive toymaker of Marvel superheroes. The 23 movies made since '08 have helped fill the piggy bank. Now that Avengers: Endgame happened, Marvel has announced "Phase 4" of its superhero content, tailored for Disney+ (which launches in November). Here's a preview of what Hasbro will turn into toys:

  • Black Widow, a spy/assassin film with Scarlett Johansson.
  • The Eternals, a movie with Angelina Jolie and Salma Hayek about a (wait for it) alien race that protects Earth from annihilation.
  • Blade, with Oscar-winner Mahershala Ali as a sunglass-loving vampire hunter.

Hasbro doesn't just borrow Disney's characters... It's expected to extend its Disney deal that includes all Star Wars and Marvel toys (expiring in 2020). But licensing other companies' characters is only 22% of Hasbro's revenue. Its OG characters are actually doing better — franchise sales rose 14% last quarter compared to just 3% for licensed. Give some extra allowance to Play-Doh, Transformers, My Little Pony, and Magic The Gathering.

Commit

Starbucks may start selling its mobile app knowledge to restaurants

Technically... the coffee chain reports earnings tomorrow. But we thought this storyline was more interesting: Starbucks wants to turn its app brilliance into a monetized revenue stream. It just invested in tech startup Brightloom with plans to build a software service that covers all the back-end mobile needs of a restaurant.

"Waiter, we'll take it all to-go"... That's the idea for Starbucks — mix together all the core elements of a successful mobile app into a single product, then serve that up to other chains through Brightloom. Here's what the service could include (and who it could replace):

  • Loyalty program: LevelUp is the app currently handling your fast-casual loyalty points with some chains, including Just Salad and Pokéworks.
  • Mobile payments: Square is the preferred payment enabler of your local fancy-bean coffee shop.
  • Customer relationship management: Salesforce is the global giant of CRM software so your go-to spot knows your "the usual" order.

Quote the Joker on this one... “If you’re good at something, don’t do it for free." Starbucks' app has become your best friend's true best friend — 17M Americans are using it, and 40% of Starbucks' US sales happen through it. Starbucks could make money off this venti-sized opportunity — 69% of US restaurants don't even accept mobile payments currently. An app though is crucial for speeding up the line, incentivizing loyalty, and learning more about customers.

Sip

Coca-Cola figures out what energy is good energy

Some numbers matter more than others... Take Coca-Cola's revenues last quarter. They were expected by Wall Street to be $9.99B — They were actually $10.0B. But that's not why the stock flew up 6% Tuesday. The real reason is Coke upgraded its sales growth expectations for 2019 from 4% to 5%. For a company as huge as Coke, that extra percentage point is big.

Coke's the 5th most valuable brand on earth... But in the US, it needs a brand-aid. Word's gotten out that carbonated water is probably better for you when not mixed with sweet syrup or aspartame. It didn't experience growth in its classic Coca-Cola brand, and the plan to revive it feels desperate: Bring the 80's back with product placements in Stranger Things Season 3.

Coke has now discovered "good energy"... A key company goal is to "expand energy" (the natural kind). Coke acquired Costa Coffee in the UK for $4.9B, and Coca-Cola Energy has been launched in 14 countries (no ETA yet for the US) — its caffeine comes from natural sources. Plus, its Diet Coke spin-off, aka Coca-Cola Zero Sugar, has grown double-digit percentage amounts for 7 straight quarters.

What else we’re Snackin’

  • Guac'd: Chipotle jumps to an all-time high as it completes its first full quarter with its new loyalty program
  • Appear: Snap jumps as its comeback continues — daily active users rose 8% to 203M in the last quarter
  • Out: Bed Bath & Beyond is cutting 7% of its corporate staff and eliminating the Chief Operating Officer role entirely
  • Brakes: Harley-Davidson's profits dropped 20% because it's still working on a way around Europe's tariffs
  • Stiffed: DoorDash is apparently taking some of the money you think you're tipping to your delivery driver (shout-out to NYT's "experiential" reporting)
  • Skew: Apple reportedly plays favorites with its own apps within the App Store

Wednesday

Disclosure: Authors of this Snacks own shares of Tesla.

20190724-908479-2735725

Get Your News

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Latest Stories

$70B

Alphabet shares are soaring in the after-market session, with a initial jump of more than 10% implying a gain of upwards of about $200B in market value when the stock opens tomorrow morning.

Google’s parent company crushed earnings expectations, initiated a cash dividend for the first time, and authorized a fresh $70B in share repurchases for good measure. The market likes it very much.

Go Deeper with Market Depth

Nasdaq TotalView powers the need-to-know data serious investors rely on.

Scuba Diving in the Wild Blue Yonder in French Polynesia
Business

No, Apple hasn’t cut its Vision Pro production estimates in half

Quite a few news outlets are reporting that Apple thinks it’s only going to sell 400,000 to 450,000 Vision Pros in 2024, compared a “market consensus” of 700,000 to 800,000. They’re all citing a note from Apple analyst Ming-Chi Kuo.

Obviously there’s no question that Apple’s $3,500 face computer will have a limited audience and could be a huge flop, but this also doesn’t seem like accurate news.

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?

The issue is that 1) this 400,000 number isn’t new. Back in July of 2023, the Financial Times reported that Apple planned to make fewer than 400,000 units in 2024, reducing its initial projections of 1M units, citing two people close to Apple and, the Chinese contract manufacturer assembling the device. 2) It's unclear who was estimating 700,000-800,000 Vision Pros in the first place, but it appears that it was Ming-Chi Kuo himself?

Your inbox is ready

Subscribe and thrive

Snacks provides fresh takes on the financial news you need to start your day. Chartr provides data visualizations on business, entertainment, and society. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

 Max Holloway and Mark Zuckerberg

Meta exhaustingly tries to merge the metaverse and AI

Gonna have to rename the company... again

Markets

Chipotle continues to go on a tear, hitting a sales record

Hey it might not be the kind of AI stock investors are all hot and bothered over, but don’t sleep on the burrito business.

Chipotle posted much better-than-expected results on Wednesday, with sales rising 14% to a record $2.70B in the first quarter, which is like a billion additions of guac.

Profits jumped 23% to $359M.

Chipotle has quietly cruised higher over the last year. It’s up 63%, compared to the 24.5% gain for the S&P 500 over the 12 months through Wednesday’s close. Not bad for a rice-and-beans based business model.

Tech
Rani Molla
4/24/24

Facebook had great earnings, the market hates it

Facebook reported impressive earnings. Record first-quarter revenue thanks to AI! Profit up 117% compared to a year earlier! But at the same time, its capital expenditures are going up and it’s expecting second quarter revenue potentially lower than analyst estimates. So in other words, the future doesn’t look as bright as the present.

All in all the stock is down more than 10%. (Basically the opposite of what happened with Tesla yesterday).

Business
Rani Molla
4/24/24

Why Tesla investors are holding on to hope for a cheap car

Despite terrible earnings numbers last night — declining vehicle sales, disappointing revenue and profit, enormous spending — Tesla stock is up more than 10% as of midday. That’s a welcome move for the car company, that’s been among the worst performers this year in the S&P 500.

Why the about face?

While Reuters reported earlier this month that Tesla is no longer making its long-awaited $25,000 mass-market car — news sent the stock, already suffering from headwinds across the EV industry, down even further— Tesla reported during its earnings that it’s going to make cheaper cars than it currently has.

Before the second half of next year, Tesla said it will release “more affordable models” that “will utilize aspects of the next generation platform as well as aspects of our current platforms, and will be able to be produced on the same manufacturing lines as our current vehicle line-up.”

So rather than release the $25,000 Model 2, Tesla is incorporating some of that technology into its existing models. UBS called it the Franken-3Y2.

Job switchers and stayers

The FTC is banning non-compete clauses

Why that might make job switching even more lucrative