Hey Snackers,
A few too many zeros: Crypto.com (famously fronted by Matt Damon) accidentally transferred $10.5M AUD to an Australian woman instead of refunding her $100 AUD. Now itâs struggling to get the millions back. Typos suck.
Stocks slipped for a fourth straight trading day, and the S&P 500 closed down 4.2% for the month. Across the pond, Eurozone inflation rose to a record 9.1%, boosting expectations for the ECB to hike rates by 75 basis points next week.
Bed Bath & Beyond tanks after unveiling a plan to raise cash, featuring store closures and layoffs
Missing the coupon catalog... It's back-to-school season, but dorm staple Bed Bath & Beyond's already flunked the semester. Shares of the struggling home goods retailer sank 21% yesterday after it revealed its plan to cut costs and raise cash. BB&B is:
- Closing 150 of its namesake stores: As of May, it had 955 stores, including Buybuy Baby. Total sales plunged 26% last quarter â even worse than other recent quarterly drops.
- Slashing 20% of its workforce: The cost-cutting attempt comes as BB&B burns through its cash reserves: it ended May with just $100M on hand vs. $1.1B a year earlier.
- Raising $500M in financing: BB&B said it secured the $$ to brace its business after going through $325M last quarter. It also filed to sell an undisclosed # of its shares.
Fitted sheet on a twin XL mattress⊠Bed Bath has bigger problems. In April it said it lost out on $175M in sales due to out-of-stock items. In June, BB&B ousted its ex-CEO for failing to fix its misfortunes. And last month, activist investor Ryan Cohen sold his entire BB&B stake.
- Pivot: As part of an unsuccessful turnaround effort, BB&B aggressively expanded into private-label brands, launching nine since last spring.
- Fail: BB&B thought exclusive brands could help it gain a competitive edge, but it led to some shoppers struggling to find the recognizable national brands they actually wanted.
Private labels can hurt public love⊠Private labels like Costcoâs Kirkland and Walmartâs Great Value brands can boost affordability for consumers and fatten profit margins for companies. But they can also alienate consumers if not done right: BB&B says itâll quit three of its house brands including Haven and slash inventory on others to refocus on brand names like Cuisinart and Oxo.
Snap slashes its workforce as social titans struggle to revive their profit puppy lifeline: ads
Snap's growth cracked⊠then its stock popped. Snap, the social giant responsible for popularizing disappearing messages, is cutting 20% of its 6K+ employees. CEO Evan Spiegel said the self-described camera company may suffer slow revenue growth into next year. To cut costs further, Snapâs scrapping: the "Pixy" photo drone, Snap Originals premium shows, and Snap Games. The stock soared as much as 15% after the news. Meanwhile: Netflix just swiped two Snap execs to lead its fledgling ads biz (awk).
The social biz sours⊠as the ads meal ticket sags. Snap's not the only social staple feeling the pain. Meta froze some hiring in May, and in July reported yet another quarter of declining sales as Facebook ads slump. Twitter "significantly" slowed hiring, laid off 30% of its recruiters in July, and last month told employees their bonuses are at risk. A few things eating into ad revenue:
- iOMess: Apple's iOS privacy push made profitable ad targeting a lot harder.
- Economean: #Flation and rising interest rates cut into advertisers' budgets.
- TikToffed: Competition from TikTok means a smaller slice of the ad-spend pie.
Socials are going basic⊠because times are complicated. Nice-to-haves like camera drones and original content may be top priorities when the cash is flowing, but as the economic outlook darkens, social cos are cutting back. In the hypercompetitive tech world, slashing innovation today risks irrelevance tomorrow â a fact likely on Meta's mind as it chugs full steam ahead into the metaverse (at least it has $40B in cash reserves to fall back on).
What else weâre Snackinâ
- Vax: The FDA authorized updated Covid booster shots for the first time. The Pfizer and Moderna shots target the BA.4 and BA.5 dominant subvariants. BA.5 = 89% of new US infections last week.
- Rocket: To infinity and Elonâd? NASA awarded SpaceX five more astronaut mission contracts worth $1.4B, turning up the heat in the private sector space race between SpaceX, Boeing, and others.
- BNPL: âBuy now, pay laterâ pioneer Klarna tripled its losses in the first half of the year â pre-2019, it was profitable. The hit comes after Klarna splurged on global expansion, especially in the US.
- Bread: McDonaldâs US chief criticized a landmark bill that would give California the authority to raise fast-food workersâ minimum wage to $22/hour for large chains, saying itâs unfair to smaller franchisees.
- Juicy: Weâre noticing a theme: EV battery investment in the US. Toyota said it'll splurge an extra $2.5B in a US plant for EV batteries, and Bosch said it'll spend $200M to build fuel cells in South Carolina.
Thursday
- Jobless claims. Earnings expected from Broadcom, Lululemon, Hormel, and Campbell Soup
Authors of this Snacks own: shares of Snap, Netflix, Apple, Twitter, Walmart, and Moderna
ID: 2406245