Inside Business

For November 29, 2023

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🛍️ NRF: Black Friday frenzy hits new peak
🚗 Deep Dive: Europe car sales surge
👟 Foot Locker shares skyrocket on earnings beat

Make sure to continue reading the Quarterly Earnings Report and the Quick Hits.

Shriram
p/Shriram

The five-day shopping weekend from Thanksgiving Day to Cyber Monday saw a record-breaking turnout of 200.4 million shoppers, surpassing last year's 196.7 million and the NRF's forecast of 182 million. Online shopping rose to 134.2 million, up from 130.2 million, while in-store shoppers slightly decreased from 122.7 million to 121.4 million.

More:

Over the weekend, consumers spent $321.41 on average on products related to the holidays, which is comparable to the $325.44 average from the previous year.
Top gifts included clothes and accessories (bought by about half), toys (by nearly a third), and personal care or beauty items (in the top five for the first time).
Cyber Monday e-commerce spending totaled $12.4B, a 9.6% rise YoY, and Black Friday online sales reached $9.8B, up 7.5% YoY.
The NRF predicts that Christmas sales in November and December would rise by 3% to 4% YoY, totaling between $957.3B and $966.6B, despite retailers' caution.

What the numbers say: October saw a 14% increase in new car registrations in Europe over the same time last year, the 15th consecutive month of growth. New vehicle registrations in October totaled 1.04 million units, with electric vehicles comprising approximately 15% of deliveries. France saw a significant 22% surge, aided by government subsidies, while Germany, the largest European car market, experienced less robust growth, registering an increase of under 5% due to the conclusion of state incentives for EVs.

Relevance: Car sales, driven by manufacturers clearing order backlogs amid supply chain disruptions, are surging despite inflation and higher borrowing costs. However, there's a slowdown in consumer demand for electric vehicles in Germany, the largest European economy, and uncertainties persist due to challenges to the country's green initiatives and potential trade issues with China over electric vehicle support.

More data: The ongoing investigation into China's support for electric vehicle manufacturers may last a year and result in additional import duties and retaliatory measures from China, potentially impacting Europe's car industry and its export of electric vehicles to the EU.

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Foot Locker shares rose over 15% following the announcement of third-quarter earnings that exceeded expectations, with adjusted earnings per share at $0.30 compared to the expected $0.21 and revenue reaching $1.99B, surpassing the projected $1.96B. The company attributed its success to robust traffic and sales during the Thanksgiving weekend, both in physical stores and online.

More:

Foot Locker has adjusted its full-year forecast, anticipating an 8% to 8.5% sales drop, showing improved trends, and a same-store sales decline of 8.5% to 9%, an improvement from the prior estimate of a 9% to 10% decrease.
A new marketing partnership with the NBA and a robust start to the Christmas quarter were among the recovery strategies that CEO Mary Dillon cited as successes.
Compared to the same period last year, when Foot Locker recorded a net income of $96M, or $1.01 per share, the company's third-quarter fiscal income was $28M, or $0.30 per share.
Foot Locker, amid challenges like consumer softness and store closures, saw a slightly better-than-expected decline in same-store sales.

Walmart is cutting its dependence on Chinese imports, with only 60% of its U.S. shipments originating from China in January-August 2023, down from 80% in 2018. The retail giant is boosting imports from India, comprising 25% of its U.S. imports between January and August this year, compared to 2% in 2018, responding to increased costs from China and growing geopolitical tensions.

More:

India has grown to be an essential part of Walmart's supply chain, and by 2027, the corporation plans to import $10B worth of goods from the country.
Walmart's 2018 acquisition of a 77% share in the Indian e-commerce company Flipkart, which has about $3B in yearly imports from India, helped the company focus on the country.
An expanding workforce, technological developments, and India's capacity for large-scale manufacturing are other factors driving the change.
Walmart's diversification strategy includes Pakistan and Bangladesh in addition to India, especially regarding the supply of clothing and household goods.

Zoom Out:

According to a company official, Amazon aims to reach $20B in merchandise exports from India by 2025, enlisting numerous small sellers on its e-commerce platform.

Here are the quarterly earnings reports for the following companies, released in November:

Traditional TV's resilience during Thanksgiving is vital for an industry contending with cord-cutting, showing that linear TV and streaming can work together. Exceptional ratings challenge the notion of linear TV decline, suggesting a potential future of bundled cable and streaming plans.

More:

NBC's Macy's Thanksgiving Day Parade broadcast set a record with 28.5 million viewers, affirming traditional TV's success amid cord-cutting trends.
CBS revealed that its Thanksgiving airing of the Dallas Cowboys' game garnered 41.8 million viewers, making it the most-watched program since Super Bowl LVII, peaking at almost 44.3 million.
Fox's Packers-Lions Thanksgiving game set a record with 33.7 million viewers, the highest for the 12:30 p.m. ET timeslot and a 6% increase from the previous year.
Amazon spent an extra $100M to air the New York Jets vs. Miami Dolphins game the day after Thanksgiving and its ongoing $1B annual deal for Thursday Night Football.
- The NFL reported a record-breaking average viewership of 34.1 million across all three Thanksgiving Day games, highlighting traditional TV's success during the holiday.

Quick Hits:

Competitors are killing your efficiency. Read how Greenhouse gained $85mil in revenue from reps who used Klue over non-Klue users.*
According to a Wall Street Journal story published on Tuesday, Apple and Goldman Sachs Group (GS.N) are ending their credit card agreement.
In a network compromise that occurred two months ago, Okta reported on Tuesday that hackers had taken data from all users of its customer support system.
ZeroAvia, a hydrogen-electric aircraft start-up in an Anglo-U.S. venture, has secured $116M in funding from various investors, with backing from the U.K. Infrastructure Bank.
Rover Group's shares surged 28% after Blackstone announced a $2.3B all-cash deal to take the pet care company private.

*This is a sponsored listing.

Shriram Jeevakumar

Freelance Writer

Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School.

This newsletter was edited by Aaron Crutchfield

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