Inside Business

For April 30, 2024

Here’s your daily business briefing.

🥤 Coca-Cola beats earnings, raises revenue forecast
🔍 Deep Dive: Whirlpool bets on $2K espresso amid woes
🍕 Domino's tops sales targets with pizza promotions

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Coca-Cola ($KO) exceeded analyst expectations with quarterly earnings of $0.72 per share, while quarterly revenue of $11.30B surpassed Wall Street's estimate. The company's net income attributable to itself increased to $3.18B, or $0.74 per share, from $3.11B, or $0.72 per share, in the previous year.

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The American multinational corporation reported a $760M non-cash impairment charge for Bodyarmor, a sports drink brand acquired fully in 2021 for $5.6B.
Net sales rose 3% to $11.30B, driven by an 11% increase in organic sales during the quarter.
The Georgia-based firm's global unit case volume grew by 1%, while North American volume stayed steady in the quarter.
The company revised its full-year organic revenue growth forecast to 8% to 9%, an increase from the previous range of 6% to 7%.

Whirlpool Corporation ($WHR), facing sluggish sales of large appliances amid decreased home sales and frugal consumers, introduced high-end KitchenAid espresso makers priced up to $2,000 to attract those accustomed to indulging in luxury coffee beverages, particularly remote workers.

What the numbers say: Coffee maker sales in the U.S. surged to $2.96B last year, marking a 3.6% rise from the prior year. Whirlpool anticipates a strong performance in its small domestic appliance segment, projecting an operating margin exceeding 15% this year, compared to its overall companywide operating margin of about 6.8%.

Relevance: Whirlpool's move into high-end espresso machines aims to counterbalance declining large appliance sales by capitalizing on the expanding small domestic appliance market. Targeting consumers seeking premium coffee experiences, especially amid the work-from-home trend, Whirlpool foresees potential in this category due to its higher margins and enduring consumer demand for coffee-related products.

More data: The new KitchenAid espresso machines target a broader consumer base, aiming to democratize the luxury coffee segment and dispel the notion that these products are exclusively for the wealthy.

Domino's Pizza Inc. ($DPZ) beat expectations with a 5.6% increase in domestic same-store sales, driven by robust order counts in carryout and delivery across all income groups, according to CEO Russell Weiner. Following the announcement, the company's stock surged 4%, reflecting a 21% increase in value YTD, outperforming the S&P 500 Index.

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Despite lower-income consumers facing dining-out challenges, Domino's achieved significant sales growth.
The multinational pizza restaurant chain's positive sales performance can be attributed to growth initiatives like enhanced advertising and operational improvements.
The company is advancing promotions like its 50% discount during carry-out "boost" weeks and offering customers a $3 coupon for online tips of $3 or more to their delivery drivers.
- Additionally, the company noted a more significant proportion of single-user transactions via Uber Eats compared to its own platforms.
The Michigan-based company has surpassed analysts' expectations for domestic same-store sales for two consecutive quarters.

McDonald's ($MCD) quarterly earnings fell short of projections, as same-store sales failed to meet expectations, partly due to boycotts in the Middle East amid the Gaza conflict. Despite revenue growth driven by increased prices, the company faced challenges attracting low-income customers, with CEO Chris Kempczinski highlighting heightened consumer discretion amid rising prices in everyday spending.

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Adjusted earnings per share for the quarter were $2.70, slightly below the expected $2.72, while quarterly revenue slightly surpassed expectations at $6.17B compared to the anticipated $6.16B.
The American multinational fast food chain's U.S. same-store sales rose 2.5%, slightly below the expected 2.6%, attributing the growth to increased menu prices.
The chain has introduced upgraded burgers nationwide, featuring its Hamburglar mascot in advertising to persuade customers of the value despite the prices.
McDonald's international operated markets segment recorded a 2.7% growth in same-store sales, while sales in France declined.
- Same-store sales in international developmental licensed markets saw a 0.2% decline.

Skechers ($SKX) achieved record first-quarter sales of $2.25B, representing a 12.5% year-over-year growth. Notably, the wholesale segment, which had experienced declining sales in the past three quarters, rebounded with nearly a 10% increase, while the direct-to-consumer business saw a robust growth of 17.3%.

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The footwear and apparel company raised its sales projection for the entire year, estimating a 9%–11% growth in sales between $8.7B and $8.9B.
With growth rates of 11.5% in EMEA, 15.3% in APAC, and 5.9% in the Americas, Skechers' wholesale revenue came to $127.1M.
COO David Weinberg credited better global inventory and domestic orders for wholesale growth, while CFO John Vandemore remained optimistic about overall YoY growth.
By region, EMEA experienced the highest sales surge at 17.4%, followed by APAC at 15.9%, and the Americas at 7.8%.

Despite worries over China's property market and economic slowdown, consumer spending on items like diapers and select Colgate toothpastes has slightly increased. Major corporations like Procter & Gamble, Reckitt, and PepsiCo are observing these modest improvements in consumer spending within China.

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Colgate's premium offerings, like whitening toothpaste, drive strong sales in China, accounting for approximately 14% of the company's overall sales in Asia.
- Despite some success with premium products, Colgate's overall sales in China remain sluggish, primarily attributed to reduced spending by rural consumers.
Reckitt is finding success in China through livestream shopping for Durex condoms, with the CEO highlighting the positive impact of new materials and enhancements.
L'Oreal and P&G are encountering difficulties in selling beauty products and cosmetics in China, with L'Oreal adopting a cautious stance and P&G witnessing a 30% drop in sales of its SK-II brand.
P&G experienced growth in its diaper and appliance businesses in China, while PepsiCo observed increased savings and cautious spending behavior among Chinese consumers.

Quick Hits:

Paramount Global announced the departure of CEO Bob Bakish, creating significant ripples within the media conglomerate amid ongoing acquisition discussions with Skydance Media.
NBCUniversal, under Comcast, is hiking Peacock's subscription fees, with ad-supported plans going up by $2 to $7.99 monthly and ad-free options rising by the same amount to $13.99 monthly, ahead of the Summer Olympics.
A new U.S. rule on high-speed braking, prompted by fatal car crashes, has been introduced despite concerns from automakers about potential unintended consequences.
A Pew Research Center survey found that 78% of American adults, including 84% of Republicans and 74% of Democrats, believe social media companies have too much political influence, marking a 6% increase since the last presidential election year.

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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.