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Shopify Is the Poster Child of New E-Commerce

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E-commerce is on fire this year as the pandemic kick-started a behavioral shift in consumers and accelerated online retail. Stitch Fix’s (NASDAQ: SFIX) saw its shares rise nearly 50% this week after reporting stellar results, along with accelerated customer growth and upbeat outlook. But it is the e-commerce behemoth Shopify (NYSE:SHOP) that surpassed eBay (NASDAQ:EBAY) this year, as the second-largest e-commerce platform in the U.S. by sales volume after Amazon (NASDAQ:AMZN). This was quite a blow for eBay, the world’s first online auction platform for person-to-person transactions. This explains why Shopify stock has soared more than 3,700% over the past half of a decade, with Amazon stock growing 375%, leaving eBay far behind at 76% increase. Here is a deeper look into Shopify’s success story.

1. New e-commerce is decentralized

eBay’s platform could have been revolutionary back at its days, but today, it has been overrun by Etsy (NASDAQ: ETSY) as well as social media platforms like Pinterest (NYSE: PINS) and Facebook‘s (NASDAQ: FB) Instagram who have integrating online purchases into their ecosystems.

Shopify that gathers over a million merchants helps them set up online stores, process payments, manage their marketing campaigns and fulfill orders. In other words, Shopify operates behind the scenes to help companies establish their own online presence without being dependant on Amazon or eBay. This is what being disruptive means. Earlier this year, Shopify even launched Shop, a consumer-facing app that provides searchable listings for its merchants.

Its decentralized approach gives merchants the freedom to expand their online footprint without diluting their identity in a crowded marketplace. It makes it easy for merchants to achieve economies of scale as their business grows.

2. Fortune favors the bold

Over the past half of a decade, eBay’s business has been shrinking. Back in 2015, it spun off PayPal (NASDAQ: PYPL) and shut down its fixed-price subsidiary Half.com in 2017. This year, it sold its online tickets platform StubHub and it plans to sell its online classifieds platform. It also reduced its marketing spending last year in an effort to boost its profit and the percentage of each sale it retains as revenue. By prioritizing profit over growth, eBay is confirming it is a mature company which therefore implies, its growth prospects are limited.

On the other end, since its IPO in 2015, Shopify has expanded significantly by acquiring the digital consulting and product development firm Boltmade in 2016, the drop-shipping platform Oberlo in 2017, and the warehouse automation company 6 River Systems last year. It has partnered with Amazon to let merchants sell products on Amazon from their Shopify stores. It has added similar integrations with Facebook, Alphabet’s Google (NASDAQ: GOOGL), Snap’s (NYSE: SNAP) Snapchat, and ByteDance’s TikTok.

Shopify has also expanded its own payments platform, Shopify Payments, which processed nearly half of its gross merchandise volume (GMV) last quarter. It launched its own fulfillment network to offer additional services via its own app, along with tweaking its premium Shopify Plus tier for larger merchants. These efforts only confirm Shopify’s is reinvesting cash to keep growing as opposed to cutting costs to protect its bottom line.

3. Emphasis on continuous growth

eBay’s revenue’s sluggish growth of 1% last year was blamed on reduced marketing expenses and higher internet sales taxes in several states across the US. Adjusted net income rose just 5%, but its earnings per share were boosted 22% by big buybacks. This year, eBay expects its revenue and adjusted EPS to rise approximately 20% but these favourable growth rates are attributable to the overall acceleration in online sales due to the pandemic. This will no longer be the case next year, revenue and earnings are expected to grow only 7% and 9%, respectively, next year.

Last year, Shopify’s revenue rose 47% and its GMV surged 49%. Its adjusted EPS did drop 30% but this is due to 6 River Systems being integrated into its new fulfillment network. But this year, analysts expect revenue for the full year will be boosted 81% with adjusted EPS expanding more than 10x. Analysts expect Shopify will continue generating high double-digit sales growth, but its earnings growth could remain unpredictable due to the ongoing investments to expand its ecosystem.

A rapidly evolving market

The pandemic gave online retail a push greater than any other in history. COVID-19 has accelerated the e-commerce industry’s growth and more and more businesses are embracing this business revolution. Companies that previously embraced the e-commerce trend are experiencing expansion while traditional retail was struggling just to stay afloat.But as the market keeps evolving at a rapid face, it arguably favors disruptive players like Shopify that lets merchants build their own online brands and optionally links them to Amazon and social networks as opposed to trapping them in a walled aquarium filled with price wars.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. 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

BenzingaEditorial

Coca Cola Confirms Its World’s Beloved Brand Status

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For more than a century, The Coca-Cola Company (NYSE: KO) has been “refreshing the world in mind, body, and spirit”. The company aims to inspire moments of optimism, to create value and make a difference.

On Wednesday, the beverage giant revealed second-quarter earnings and revenue that beat Wall Street’s expectations, allowing it to raise its full year forecast for adjusted earnings per share and organic revenue growth. Most importantly, some markets rebounded from the pandemic, fueling revenue to surpass 2019 levels. Shares rose more than 2% in morning trading.

Q2 figures

Net income rose from $1.78 billion as it amounted to $2.64 billion. It resulted in adjusted earnings per share of 68 cents, exceeding the expected 56 cents. Net sales rose 42% with revenue of $10.13 billion that also exceeded the expected $9.32 billion. Excluding acquisitions and foreign currency, organic revenue rose 37% compared to last year’s biggest plunge in quarterly revenue in at least three decades due to lockdowns that severely dented demand.

A significant increase in marketing and advertising spend fueled the rebound but Coca Cola’s approach isn’t just about boosting spend, but also about increasing the efficiency of that spend. CFO John Murphy revealed that marketing dollars were doubled compared to last year’s quarter, when the pandemic forced the beverage giant to slash its costs to preserve cash.

Unit performance

All drink segments reported double-digit volume growth. Away-from-home channels, like restaurants and movie theaters, were rebounding in some markets, like China and Nigeria, but there are also markets that are still being heavily pressured by the pandemic such as India.

The department that contains its flagship soda saw volume increase by 14% in the quarter. The nutrition, juice, dairy and plant-based beverage business saw a volume growth of 25%, partly fueled by Minute Maid and Fairlife milk sales in North America. The same volume growth was seen by hydration, sports, coffee and tea segment. Costa cafes in the United Kingdom reopened and drove 78% increase in volume for coffee alone.

The risk of raising commodity prices

Like its F&B peers, Coke is facing higher commodity prices but it plans to raise prices and use productivity levers to manage the volatility in the second half of the year.

Outlook

For the full year, Coke improved its organic revenue growth outlook from high-single digit growth to a range of 12% to 14%. It also raised its forecast for adjusted earnings per share growth from high single digits to a low double digits range of 13% to 15%.

Putting it all together, executives emphasized the range of possible outcomes given the asynchronous recovery and dynamic of the pandemic. Coca Cola plans to build on the strong momentum by intensifying the amount and efficacy of promotions and continuing to innovate, what it does better than anyone and what helped it earn its brand status.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. 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

Automakers Are Hitting the Accelerator in the EV Race

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On Thursday, Daimler AG (OTC: DDAIF) has officially hit the accelerator in the e-car race with Tesla (NASDAQ: TSLA), revealing it will invest more than 40 billion euros in EVs by 2030. From 2025, three new vehicle platforms will only make battery-powered vehicles. One will cover passenger cars and SUVs, one will be devoted to vans and last but not least, the third will be home to high-performance vehicles that will be launched in 2025. Under its EV strategy, the inventor of the modern motor car will be renamed Mercedes-Benz as it spins off its trucks division by the end of the year. With its partners, it will build eight battery plants to ramp up EV production.

Upon the news that come just over a week after the EU proposed an effective ban on the sale of new petrol and diesel cars from 2035, shares rose 2.5%.

Automotive peers

Ahead of the EU’s announcement that is only part of a broad strategy to combat global warming, many automakers announced major investments in EVs. Earlier this month, Stellantis (NYSE: STLA) revealed its own EV strategy that includes investing more than 30 billion euros by 2025. Mercedes Benz isn’t the only one ‘going for it’ to be dominantly, if not all electric, by the end of the decade. Geely Automobile Holdings Limited’s (OTC: GELYF) Volvo Cars committed to going all electric by 2030, while General Motors Co (NYSE: GM) is aiming to be fully electric by 2035 and Volkswagen AG (OTC: VWAGY) even plans to build half a dozen battery cell plants in Europe.

Moving the debate

Daimler’s chief executive stated that  spending on ICE-related technology will be “close to zero” by 2025 but he did not specify when it will end the sales of fossil fuel-powered cars. Källenius wants to move the debate away from when will the last combustion engine be built to how quickly they can scale up to being close to 100% electric.

Tough decisions for Mercedes Benz

The undergoing shift will result in an 80% drop in investments in ICE vehicles between 2019 and 2026. This will have a direct impact on jobs because EVs have fewer components and so require fewer workers compared to their ICE counterparts. As of 2025, Daimler expects EVs and hybrids will make up half of its sales, with all-electric cars expected to account for most that figure, which is earlier than its previous forecast for 2030.

The battery- the Holly Grail

By 2023, Daimler plans to have a fully operational battery recycling plant in Germany. The industry leader Tesla just signed a deal with the world’s largest nickel miner to secure its battery resources as it prepares to begin its own tables battery in-house. Then there’s Worksport (OTC: WKSP) who will bring solar power to the EV table with its solar fusion TerraVis which will be fine-tuned and validated for prelaunch by the end of 2021. Although the first prototype is a solar-powered tonneau cover for pickup truck drivers, the company is also developing TerraVis COR which is a standalone product that offers remote power generation and storage. In other words, with its two-year partnership with Ontario Tech University, Worksport is fully equipped to power many automakers step into the electrification era.

The EV race is a journey like no other we have witnessed – and the participants are going full-speed ahead as they race to reshape the energy matrix of automotive industry.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. 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

Intel’s Q2 Results Show It Is Not Losing Focus

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Intel Corporation (NASDAQ: INTC) revealed its second-quarter 2021 financial results yesterday. The digitization transformation and switching to cloud services continue to accelerate, and a company like Intel sees that as the opportunity for an even bigger growth. Even with the current semiconductor shortage, Intel is not losing its focus on both innovations and the implementation of new solutions. The company’s CEO, Pat Gelsinger, appointed earlier in 2021, believes we are at the beginning of the semiconductor industry’s decade of sustained growth and that Intel has a unique position to capitalize on that trend. As the momentum is strengthening, execution is increasing, the company’s products are being chosen for top and flagship products. We can also see good results in other companies in the semiconductor business, like Texas Instruments Incorporated (NASDAQ: TXN) and Advanced Micro Devices, Inc. (NASDAQ: AMD).

 Second-quarter results

Intel’s second-quarter results are positive and the proof of the momentum building up, as mentioned by Gelsinger. GAAP revenues for Q2 were $19.6 billion, significantly higher than the expected $17.8 billion, and there was no change when looking back year over year. However, non-GAAP revenues were $18.5 billion, exceeding the April guidance by $700 million, and that is 2% up compared to the previous year. Intel’s Data Center Group (DCG) generated $6.5 billion compared to the expected $5.9 billion. Client computing generated the expected revenues of 9.95 billion, while the actual revenues were $10.1 billion. GAAP earnings per share were $1.24, while the non-GAAP EPS were $1.28, which also surpassed April’s guidance of $1.07.

 The good trend in the semiconductor industry

Another chipmaker, Dallas-based Texas Instruments, also reported Q2 earnings that topped the expectations. These good results were due to revenues growth and an increase in profits. The analysts expected revenues of $4.36 billion, and the company managed to generate $4.58 billion. That is a sales increase of 41% when looking year over year. Expected earnings per share were $2.05, while the analysts expected $1.83. However, the sales guidance for the current quarter was below the investors’ wishes, so the share price dropped upon the news.

 Outlook

As revenue, EPS, and gross margin exceeded the Q2 guidance, Intel raised its 2021 full-year guidance. So expected GAAP revenues are $77.6 billion and non-GAAP revenues are expected to amount to $73.5 billion (which is an increase of $1 billion), resulting in expected GAAP EPS of $4.09 and non-GAAP EPS of $4.80. Planned CAPEX is between $19 billion and $20 billion and free cash flow should be $11 billion, which is an increase of $500 million versus prior expectations. Gelsinger estimates that the semiconductor shortage will start loosening in the second half of the year, but it will take another one to two years until the demand is completely met.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. 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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