🎄 Retailers’ unmerry markdowns
Hey Snackers,
Lauren Sanchez didn’t just pose with fiancé Jeff Bezos in his cowboy hat for Vogue — she also talked about the 10,000 Year Clock Bezos is having built on the side of a mountain. It’s meant to tick once a year for the next 10K years… probably on Prime Day.
Stocks were up last week, with the S&P 500 on track to notch its best month in a year. Meanwhile, Black Friday shoppers looked online for deals as this year’s in-person sales appeared to draw smaller crowds.
Retailers brace for a discounted holiday szn as folks hunt for bargains instead of big buys
Jingle-bell bargains… Retailers dropped some chilly holiday forecasts last week as the most wonderful time of the year got underway. Department store OGs like Macy’s, Nordstrom, and Kohl’s finally trimmed down inventory last quarter, but all three saw Q3 sales slumps. And yet off-price retailers including TJX, Ross, and Burlington Coat Factory topped expectations as cost-sensitive shoppers kept looking for discounts. About that:
One click: Cyber Monday (psst: today) sales are expected to jump 21% to $13.7B, outpacing Black Friday spend. Because sales started earlier this year, consumers said they’ll be done with 60% of their holiday shopping by today.
Long line: The holiday quarter is traditionally retailers’ most lucrative, but this year competitive discounts could weigh on bottom lines.
Half off perfume gift sets… for the whole fam. Retailers such as Macy’s, Target, Amazon, and Home Depot were rolling out promos as early as October in hopes that thrifty shoppers would use the savings to fill their stockings. They weren’t wrong: one survey found that 41% of consumers looked for coupons, discounts, or sales when holiday-shopping this year. Nearly a third started spending earlier. Meanwhile, October discounts were steeper and covered more items than the past four years. Because consumers are laden with a record $1T in credit-card debt and have dwindling savings, retailers are relying on aggressive deals to drive demand.
Shoppin’ small can still be big… Nearly 75% of holiday shoppers in the US expect to drop the same amount of $$ on gifts this year as they did last year — but now they’re demanding more bang for their buck. At the same time, stores like Macy’s hope that having an extra weekend to shop before Christmas will boost last-minute hauls. While holiday spending could hit a record $966B, it’s the slowest pace of growth in half a decade.
Coming up this week
Don’t forget to stuff the heart in… Build-a-Bear (yeah, it’s a stock) reports Thursday after notching two straight years of record profits. Though malls have seen a grisly decline, the custom teddy bear icon’s thriving, partly thanks to partnerships with franchises like Star Wars, Pokémon, and Barbie (and Jason Mraz?). Each of its ~500 stores worldwide was profitable last year and its online sales are flourishing, possibly thanks to #kidults who are too embearassed to go in. In August, Build-a-Bear said teens and adults made up 40% of sales.
Intuit muddles Mint… not for a mojito. Intuit reports tomorrow, after recently announcing it was shutting down Mint, one of the first budgeting apps, and still among the most popular. The software co is prioritizing another personal-finance product that it’s struggling to squeeze $$ out of: Credit Karma. When Mint’s officially gone (on January 1), users will be encouraged to move to CK. Intuit — which also owns TurboTax, QuickBooks, and Mailchimp — exceeded expectations last quarter, but its shares dropped as Credit Karma’s revenue fell 11%.
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Stories we’re watching
Waving goodbye-nance… The world’s largest crypto exchange, Binance, bade adieu to CEO Changpeng Zhao, who stepped down and pleaded guilty to money-laundering-related charges. Binance itself also pleaded guilty and agreed to pay $4.3B in fines. It’s a mega shakeup of the crypto world, but analysts cheered because it resolved one cloud of legal uncertainty that had hung over the biz. Still, there could be another storm brewing: the SEC’s accused Binance of mishandling customers’ $$, and the regulator wasn’t involved in last week’s settlement.Â
Pens on chains, unite… Tellers, wealth-management employees, and other workers at two Wells Fargo branches last week filed for what would be the first-ever union elections at a major US bank. The workers, who want higher wages and staffing levels, began the union campaign at America’s fourth-largest bank in 2021. 1K+ Wells Fargo employees across the US have signed on in support, and organizers say more elections could be on the way. Just ~1% of finance-sector employees were part of a union last year, compared to 10% of the full US workforce.
What else we’re Snackin’
ClosedAI: Sam Altman got rehired as CEO of OpenAI less than a week after being fired. The board members who booted him are being (mostly) replaced, which could indicate a big shift for the ChatGPT maker’s strategy.
Commercial: Targeted ads may take off at United Airlines. Using troves of passengers’ data, United’s considering tailoring ads on seatbacks and apps. Companies like Uber and Marriott have also used data for ad targeting.
Green: Q3 corporate earnings popped, with S&P 500 cos seeing increasing profits overall (bucking Q1 and Q2 trends). The expectation-beating results helped stocks this month, and suggested the possibility of a soft landing.
This Week
Monday: Cyber Monday. Earnings expected from Zscaler
Tuesday: Consumer-confidence report. Earnings expected from Pinduoduo, CrowdStrike, Workday, Intuit, Splunk, and Hewlett-Packard
Wednesday: Earnings expected from Foot Locker, Dollar Tree, Petco, Hormel Foods, Snowflake, Salesforce, Okta, and Victoria’s Secret
Thursday: Earnings expected from Kroger, Big Lots, Dell, TD Bank, Cracker Barrel, Ulta Beauty, Marvell Technology, and Build-a-Bear
Friday: Earnings expected from Bank of Montreal
Authors of this Snacks own shares of: Amazon, Uber, and Ulta
*Advertiser’s disclosure: Please read the offering circular and related risks at https://invest.infinityfuel.com. This is a paid advertisement for Infinity’s Regulation CF Offering.