Hey Snackers,
Gen Z has some competition: 70 and up "grandfluencers" are the new influencers.
Stocks inched up to records again yesterday, after fresh labor data suggested that economic recovery is still on track despite rising Delta cases.
GDP-R-you-ready-to-rumble… EU regulators slapped Facebook’s WhatsApp with a $270M fine this week for violating GDPR. Europe’s General Data Protection Regulation, aka: the world’s toughest data privacy law, forces companies to get permission to collect and share users’ data, protect that data, and report any breaches. That makes it harder for companies to monetize valuable user info (think: Facebook and ad targeting). According to regulators, WhatsApp shared data with FB and Insta without users’ permission.
Cue the GDPR yellow cards… But instead of a warning, companies are now getting fat fines. When GDPR went into effect three years ago, enforcement was minimal: European regulators had only issued around $86M worth of GDPR fines by the start of 2020. Since then, that figure has skyrocketed to $1.5B. Privacy activists have praised recent fines, but some say they’re still not big enough: For context: GDPR allows fines of up to 4% of a company’s global revenue, which means fines for Amazon could hit $15.4B. Some of the heftiest GDPR fines since 2019:
Privacy is knocking… GDPR enforcement in Europe could inspire stricter privacy regulation across the globe. Last year, France fined Google $120M and Amazon $42M under its own national privacy laws. Regulators in Brazil, Japan, and India have also passed stricter privacy regulation inspired by GDPR. The US has no national equivalent, but California and Virginia passed GDPR-esque state laws — and Washington and New York are considering similar laws to protect citizens’ data.
Cutoff shorts summer... follows bralette spring. Mall icon American Eagle reported all-time high second-quarter sales yesterday. But sales still missed expectations, and the stock dropped 10% (womp). Mid-pandemic, AE's core brand sales fell while its loungewear sub-brand Aerie thrived. Aerie sells comfy basics, from hoodies to flared leggings — and makes up more than a fourth of AE's total sales. Pandemic-friendly Aerie is still #thriving, but AE's jeans and blouses bounced back last quarter, and are growing faster.
Not a horror movie... Last quarter, AE did a stellar job avoiding "The Discount Spiral of Death" by reducing discounts and avoiding overstock. That lack of 70% off tags led to a $121M profit, up from a $14M loss last year. AE also optimized costs by closing 18 core brand stores last quarter — but it opened 23 new Aerie stores.
Sub-brands are the new front-brands... Despite AE's rebound, Aerie was the earnings star. It's a theme: sub-brands have been driving big growth for their parents. Urban Outfitters' sales more than 3X'd last quarter, thanks to a major boost from its Free People activewear sub-brand, “Movement.” Hollister and lingerie brand Gilly Hicks now make up more than half of Abercrombie's total sales. And Old Navy makes up more than half of Gap's sales.
Authors of this Snacks own shares of: Walmart, Google, Ford, and Amazon
ID: 1825431