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BenzingaEditorial

The Pandemic Changed Fashion Retail Forever

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This year’s International Women’s Day coincided with the anniversary of the coronavirus putting the whole world on pause. It was one of the most turbulent 12-month periods in recent history that completely changed businesses and lives and one of the most disruptive years fashion retail has ever faced.  Although it seemed that the online personal styling service Stitch Fix Inc (NASDAQ: SFIX) had what it takes to defy the odds, it ended up with a quarterly loss and softening outlook. It missed analysts’ revenue expectations as shipping delays and lower customer spend ate into sales. What is most troubling is that new trends such as home offices became the norm in a new normalcy that is still in the making.

Stitch Fix’s fiscal second-quarter results

For the quarter that ended on January 31st, active clients spent 7% less than the same time a year ago. On Monday, Stitch Fix reported a narrower-than-expected loss of $21 million, or 20 cents per share. Last year, it made a profit of $11.4 million, or 11 cents per share. Net sales expanded 12% to $504.1 million, but still came short of the expected $512.2 million. Shipping delays over the holiday season resulted in backlogs and as a result, the company couldn’t record revenue for all boxes shipped during the quarter.

What was a bump in the road was the fact that consumers shifted their spending from themselves to buying gifts for others during the holiday season and this trend resulted in weaker sales. However, the company still had its strongest January on record. It added 110,000 new active clients during the quarter with the total client base amounting to 3.9 million. During the first half of fiscal 2021, it added more active clients than it did for all of the previous fiscal year.

A unique business model

How the US retailer and online clothing styling works is that customers fill in a questionnaire detailing size, style aspirations, the parts of their body then enjoy showing off and how much they want to spend. Then the magic happens as algorithms use this information to filter the company’s stock, with stylists refining the final selection. The client only pays for the clothes they keep and a symbolic styling fee. According to its CEO, Katrina Lake, the value of Stitch Fix is that the stylists and algorithms “help surface” items among “labels that you would never think would have anything for you”. The business model trades on our obsession with busy-ness, as well as choice paralysis. The core customer is busy working but wants to look polished, enjoys fashion but does not have the time to go to boutiques. According to the CEO who has no fashion training but still keeps in touch by styling five customers a week, jeans are key to customer loyalty because if you can get somebody a pair of jeans that fits them well, they’re amazed. She did start the business while doing an MBA at Harvard Business School, but, in a COVID world that questioned everything we knew, is this enough?

Forecast

The subscription styling service lowered its revenue forecast for both the undergoing quarter and the whole fiscal year due to ongoing uncertainty revolving around the pandemic and longer purchase cycles due to delivery issues. For the fiscal third quarter, net sales are expected to be in between $505 million to $515 million, representing growth of 36% to 39%, and an adjusted loss (negative EBITDA) in the range between $5 million to $9 million. For the full fiscal year 2021, the company expects revenue to grow 18% to 20%, down from its prior outlook of 20% to 25%, which is less than Wall Street’s 22.6% forecast. The reality is that customers are spending less on average as active clients spent $467 on average, which is 7% less compared to the same quarter last year.

Retail is in a different place

During the early days of the pandemic, it became obvious that the retail sector is in for long-lasting changes. Back in May, Marks & Spencer’s CEO Steve Rowe stated that even though some customer habits will return to normal, others have changed forever. Store closures have forced shoppers to become digital consumers, leading to an explosion in home delivery and curb pickup. The rise in online sales has forced fashion retailers to truly see the costs of ecommerce, while also using technology to connect with shoppers in new ways. They needed to find ways to maintain social distancing in warehouses  and spread the work over 24 hours, resulting in lessons about working efficiently. Although shoppers flocked back to stores when prior lockdowns were eased, they need to feel safe. There is a new emphasis on storytelling as companies need that ability to pull in consumers even from a virtual window.

On the other hand, travel restrictions have actually encouraged more regular contact with suppliers and closer collaboration through digital technologies to handle diverse tasks. In many cases, the result been a more focused, more frequent and faster decision making. Retailers are still working out the best way of going forward but overall it is unlikely that retail, both in ecommerce and physical stores, will function in the same way like it did before the pandemic. One year on from the first lockdown, only one thing is certain: fashion retail is in a very different place.

Outlook

As for Stitch Fix, the problem it is trying to solve is still there. A busy working woman still wants to look good, and having kids makes it even more challenging to find the time to do that. She might need a different outfit if she’s going to work from home more but dressing up is making an artistic statement that makes us feel more confident and boosts our mood – and we all still need that, probably more than ever.

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

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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