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Pickups, SUVs and CUVs – The Bright Future of the Specialized Equipment Market

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Pickups, SUV News

Pickups form the largest share of the specialty equipment industry because they are simply a great platform for modification. The Specialized Equipment Market Association (SEMA) rated Ford Motor’s (NYSE:F) F Series as the most customizable truck and its majesty, Fiat Chrysler Automobiles’ (NYSE:FCAU) Jeep Wrangler as the winner of the SUV category. And besides providing valuable opportunities for customization, pickups have taken the throne from traditional passenger cars and they show no signs of stopping.

Pickups are on the throne – and they are bringing Workhorse Group Inc along!

There are 55.9 million registered pickups in the United States, making 20% of all vehicles on the road. Led by Ford F-150, there’s also quite a bit of Toyota Motor’s (NYSE:TM) Toyota Tundra. As for a snapshot of the accesorization subsegment, total specialty-equipment sales in 2018 amounted to $12.03 billion and made 27% of the specialty-equipment retail market. These products include, maintenance oil, wax and cleaning products, trailer and towing accessories but also exterior appearance upgrades, batteries and truck bed liners. People love to add big wheels to their pickups, enhance exterior appearance so those products also always tend to do well and logically, trailer and towing products are most commonly purchased by pickup owners. But it is truck beds that provide valuable opportunities that aren’t present with other vehicle segments for utility products, such as racks and toolboxes, plus liners and bed covers.

Speaking of truck beds, no wonder Workhorse Group Inc (NASDAQ:WKHS) has its hands full with the electric start-up company occupying its strongest position to-date, both operationally and financially. During its third quarter, the company signed several partnership deals to leverage its intellectual property while more than doubling its loss of a year ago from $5.5 million to $11.5 million due to higher interest expense.
The company recorded sales of $4,000 which is quite down from $11,000 in the same period last year, however despite the fact that the company delivered fewer trucks, it did so at higher prices due to making a transition to a new generation, causing its R&D prices to increase 13%. Workhorse received a non-dilutive 10% stake in Lordstown Motors which purchased the 6.2-million-square-foot plant from General Motors Co. (NYSE: GM) on Nov. 7. Also on a brighter note, the company’s balance sheet of September 30th shows cash and cash-equivalents amounting to $9.3 million compared to only $1.5 million on December 31, 2018.

Meanwhile, Franchise Holdings International Inc (OTC:FNHI)’ Worksport was just granted a third U.S. patent protecting its innovative covers that provide unique full-bed access for light trucks such as Ford F series. In September, the company received its second U.S. Patent Office trademark allowance, so now they have four in 2019 that add protection to its brand strategy. This innovative company is also looking to complete its Helios line with complimentary truck accessories able to transform sunlight into storable energy so that they can extend the driving range of forthcoming electric trucks. Worksport’s proprietary solar technology infused with its most advanced truck bed covers is more than a major breakthrough innovation, it represents an endless opportunity for future growth.

Pickup market outlook

The top pickups as far as accesorization goes are GM’s full-size pickups and surprise, Ford’s F series. But Toyota’s Tacoma and Tundra are on the list as well as Nissan Motor Co. (OTC:NSANY)’s Nissan Frontier. Of the roughly 56 million pickups in the United States today, nearly 60% of them are either GM Full-Size or Ford F-Series as these two models combined account for almost 12% of all vehicles on the road. GM and Ford’s market dominance is expected to continue with estimated additional 12 million trucks for 2026- speaking for a safe haven for the specialized car equipment industry! GM has 17.6 registered vehicles on the road with Ford following with 15.6 million. But, the rebirth of several mid-size models are also expected to provide an additional boost by bringing in new buyers, with Toyota and Nissan having quite a number of enthusiastic owners, creating a strong market for their specialty equipment. Great news for Toyota that is struggling to adapt to the ‘electrification’ era.

SUVs

With 36.7 million registered vehicles in the United States making 13% of all vehicles on US roads, top models are again led by Ford, and Ford Explorer to be exact. But then there’s Jeep taking second and third place, GM’s Chevrolet Tahoe, Toyota’s Toyota 4Runner, with Hyundai Motor Company (OTC:HYMTF) Kia Sorento taking 8th place and FCA’s Dodge Durango taking 9th place. But don’t worry about Fiat Chrysler Automobiles, as despite a miss on revenue targets, its stock gained 17.3% in October, mostly due to the good merger news with France’s Peugeout SA (OTC:PUGOY) which was announced on the same day of the earnings release.
The specialty equipment sales for the SUV segment amounted to $5.93 billion in sales in 2018, making 13% share of the market. While SUVs are not as versatile as pickups for accessorization, many owners upgrade their SUVs with utility parts and for off-roading as many SUVs topping the list are in fact often used to go off-the road.
But it is Jeep that dominates the after-market. The Jeep Wrangler is widely considered to be one of the most modified and versatile vehicles on the road today as nearly 40% of Jeep Wranglers are accessorized in some way, be it shape or form.

Crossovers are becoming more popular

Although a crossover (CUVs) are becoming more and more popular and their distinction is not always clear, they are a separate segment because SUVs are built on truck platforms whereas CUVs are built with unibody construction. With SUVs showing a long tenure, consumer interest is expected to continue in the coming years. They are more profitable for auto-manufacturers to make but there are economic factors like increased gas prices and uncertain economy could decrease consumer buying power. But when it comes to accessories, they will persevere for all those who wish to optimize their utility with a lot of specialty after-market upgrades.

CUVs

The fastest developing segment makes 17% of all vehicles on US roads amounting to 48.3 Million registered CUVs are being led with Honda Motor Co (NYSE:HMC)’s CR-V, the one and only model that crosses in between not being a true pickup nor an SUV, a true jewel for this ever evolving company. Then there’s of course, Ford Escape, Toyota RAV4, Chevrolet, Nissan, Subaru Forester and Jeep Cherokee. CUVs created 11% share of the specialized equipment market. Having outpaced even pickups, it is logical to assume consumers will turn to accessorizing CUVs like they do with SUVs. That being said, there are obstacles. The segment is fragmented as there are 120 models in operation and just as many models are expected to be sold in the future. As a consequence, it will be difficult to create products that will function across all platforms. The large number of platforms limits the opportunity for companies seeking to sell specialty parts as there is no clear single model that dominates the market. The Ford Escape and Toyota RAV4 lead the pack in terms of registrations having been out longer. However, there are many other CUVs close behind and all this diversity makes it challenging to focus on to a single model. The popularity of CUVs is not expected to subside soon but, many CUV models are relatively new and have little history with the accessorization market so there will be a challenge to decide which models to focus on. But one thing is certain, while the conventional car market continues showing signs of fatigue, pickups, SUVs and crossovers are booming- and show no signs of stopping. And even if this wasn’t case, there’s so still so much room in upgrading older models so all is bright for the specialized equipment industry when it comes to this segment. Worksport has its future guaranteed with its breakthrough solar technology that can surely disrupt the truck accessories market but Workhorse Group is also in for the ride once the company finishes its transition to the new generation as pickups are definitely here to stay.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com
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BenzingaEditorial

Bed Bath & Beyond’s Stock Plunges With Hard Times on the Horizon

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On Wednesday, January 8, third quarter earnings and revenue miss caused the share price of Bed Bath & Beyond Inc (NASDAQ:BBBY) to plunge 8 percent with the retailer withdrawing fiscal 2019 outlook. On Thursday, stock was down 11 percent in premarket trading.

Third quarter earnings

Oh, how the mighty have fallen seems as the appropriate phrase to describe net earnings from of $24.4 million from one year ago dropping to a net loss of $38.6 million. Refinitiv expected earnings of 2 cents whereas the retailer delivered an adjusted loss per share of 38 cents. Revenue dropped 9 percent and amounted to $2.76 billion with same store sales dropping 8.3 percent versus the 5 percent expected. Both sales and profitability are expected to remain under heavy pressure in the fourth quarter as well. The retailer found that its results were significantly impacted by the fact Thanksgiving fell later than usual, resulting in one week less of holiday sales.

Tritton’s shakeup

On Monday, the retailer announced that it accomplished a real estate deal that netted the company $250 million in proceeds, what according to Tritton is the first step towards unlocking valuable capital. And only in December, Tritton decided to let six senior executives go and is currently in the recruitment process for their roles. Bed Bath and Beyond’s turnaround strategy is well underway with these swift changes but surely, there are many more to come as some of these executives have been with the company for more than 20 years – so “out with the old, in with the new” it is.

Intense competition

Amazon (NASDAQ:AMZN) has vigorously shaken up the retail landscape, but Target Corporation (NYSE:TGT) and Walmart Inc (NYSE:WMT) are by no means, left behind, but are in fact doing beyond great as they are successfully luring customers with more attractive websites and speedier shipping. And all of them are selling pretty much all the products that Bed Bath & Beyond has in store, leaving the struggling company in quite a turmoil.
But Amazon is by no means still the emperor sitting on the e-commerce throne as it is literally bleeding out to retain its crown. The world’s biggest online stores is losing money on its sales in order to achieve its shipping policy and in the world of ‘free-shipping’, it seems it could soon be beaten by Walmart, world’s third largest store but America’s largest retailer. And it is growing fast into online retail with its online sales exploding 78 percent up since 2016, but more importantly, now growing twice as fast as Amazon. And here’s the trick, Walmart is using its physical stores as warehouses for online sales. And since these stores are already turning a profit, maintaining extra warehouse space is nothing but a small addition to costs and that makes its strategy far different. Amazon only has 110 warehouses across the US so Walmart will soon have the biggest and more effective shipping network. Although both have great growth potential, Walmart is going full speed ahead in the online retail wars. Not good news for Amazon and especially for poor old Bed Bath & Beyond.

Outlook

CEO Mark Tritton, a Target veteran who started commanding the ship in October has announced that strategic plans for creating a long-term profitable growth will be revealed within the next two months, showing his discontent with these unsatisfactory results which are more than an imperative for change of the current business model. Bed Bath & Beyond desperately needs a new vision and hopefully, Tritton will be able to deliver it, otherwise things could get even worse.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

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BenzingaEditorial

Walgreens Isn’t Getting Closer to Turning Sickness to Health

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Walgreens News

Walgreens Boots Alliance (NASDAQ:WBA) reported its first fiscal quarter earnings on Wednesday, January 8 before the market opened. Its profits were harmed by increased competition from online and discount retailers, resulting in less prescriptions. Despite the slow start of 2020, the company hopes to be one of the rare survivals of the intense shakeout that is upon the pharmacy sector and is expected to wipe out thousands in the years to come.

Earnings report

Wall Street expected $34.6 billion in revenue and earnings per share of $1.41. And results fell short of expectations with revenue of $34.34 billion. Net profits declined sharply, 25 percent to be exact to $845 million for the period ended November 30th, 2019. Despite rumours that that the global pharmacy chain could be taken private in a massive leveraged buyout but Chief Executive, Stefano Pessina, didn’t address this speculation but rather emphasized that the company is making a progress in reinventing new services and digitizing its drugstore chain. The company is investing hundreds of millions of dollars in this reinvention while under a massive cost management program. And at least sales went up 1.6 percent. But the weak pharmacy spots cost its shares a consequent fall of 7 percent after the earnings report and even dragged those of rival CVS Health Corporation (NYSE:CVS) down 2 percent as investors are concerned that the pressures on reimbursement rates from insurers is likely to make further damage to profits.

Miserable 2019

The pharmacy and retail company ‘won’ the award of worst performer for 2019 when it comes to Dow Jones Industrial Average. S&P gained 27% over the last 12 months whereas Walgreens fell 16 percent. During this everything but memorable fiscal year, Walgreens sales grew just 4% and earnings per shares were down from fiscal 2018.

Along with its rival CVS Health Corp., Walgreens is managing to help itself somewhat by benefiting from many closed up pharmacies and acquiring their customers and consequently, their prescriptions. But, Walgreens itself has closed some of its stores as the company announced in August it will close an additional 200 stores to the already announced shutdown of 750 stores. But Walgreens’ strategy is different to of its rival that aims to attract customers with lower cost personal care items and primary care services. Yet, Pessina is more than confident in Walgreens’ strategic partnership approach, which most recently included expanding its relationship with The Kroger Co (NYSE:KR) in order to include a new group purchasing organisation and simply, cushion the impact from all those blows.

Outlook

The two strong headwinds that have hampered the company—the falling reimbursement rates insurance companies pay for prescription drugs and the struggles of its retail business aren’t going to change direction anytime soon. Giants known as insurers are pressuring pharmacies on margins and Amazon.com Inc (NASDAQ:AMZN) along with many other digital competitors are already doing a great job in luring customers. Surely, Walgreens cannot be saved by LED lighting that will save money, which was mentioned by one of its executives during the conference call, but long-term, maybe a very long and severe flu season can help Walgreens in turning its own sickness into health. Yet, Wall Street remains sceptical. Since news broke in November about a possible LBO, the pharmacy chain has now lost all the gains it made since then. One thing is for sure, whoever you are, if you are anywhere near being a pharmacy, it is a very difficult place to be at.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Xerox Continues Pursuit of HP by Showing the Money, $24 billion That Is

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Xerox News

On Monday, Xerox Holdings Corp (NYSE:XRX) revealed a financing commitment with the aim to ease concerns that it is unable to fund its HP Inc (NYSE:HPQ) buyout proposal. In order to remove any doubt and prove it is capable to take over its much larger rival, Xerox secured binding financing commitments worth $24 billion from Citigroup Inc (NYSE:C), Mizuho Financial Group Inc (NYSE:MFG) and Bank of America (NYSE:BAC).

The Takeover Saga

Xerox has a market cap of $8 billion whereas HP’s kingdom is valued at $30 billion but this isn’t the common ‘big fish eat little fish’ scenario. The $33.5 billion takeover bid was daringly offered by Xerox in early November. This cash-and-stock offer was rejected twice HP who felt that $22 per share is not in the best interest of its shareholders and furthermore, that it significantly undervalues their company. When the executives rejected the proposal yet again in late November, they criticized Xerox’s aggressive approach and questioned its 10 percent decline in revenue since last year, further showing concerns about Xerox’s financial abilities to pursue this merger. But Xerox has now shown publicly its capability to pursue this value enhancing opportunity. And although profitable for now, when it comes to printing, earnings are dropping year after year as both companies are struggling and spinning off different ventures in order to leave this aging business behind. According to Xerox, this deal would save both companies $2 billion in costs over the next two years and would boost revenue for $1.5 billion over the next three years.

Outlook

Xerox strongly believes that this union would result in valuable synergy to both parties: increasing the addressable market as well as shareholder returns, ease debt and drive innovation that both companies desperately need to survive in the new era as the printing business continues to age. Moreover, Xerox also finds that it is strong in areas where HP has key market gaps, such as managed services. It obviously presented its value-creating case successfully to the big banks, winning their vote of confidence. But what will it take to win over HP? Now that the major concern is resolved, some shareholders might rethink Xerox’s proposal. But here’s an even bigger question. If successful, what does Xerox intend to do with HP’s PC business which accounts for the majority of HP’s revenues, and moreover, why does it want to get further into not only one but two markets that are slowing down? Or maybe Xerox knows something about printing and PCs that we don’t and this very same reason could also be behind HP’s self-confidence. But Xerox has now shown the money and the ability to get its agenda though so this saga is far from over.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com

Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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