Consumer & Retail Report #12: 9/25 Recap

Summary of the Week in Consumer and Retail

Paul Cerro

Sep 25, 2022

Welcome to our Consumer and Retail recap where we share noteworthy headlines, updates, and insights. Never spam.

Company Announcements

Walmart (WMT) plans to hire around 40,000 mostly seasonal workers (WSJ)
Porsche IPO to Raise up to $9.4 Billion for Parent VW (Bloomberg)
Apple (AAPL) will increase App Store prices in Europe and Asia next month (Bloomberg)
Peloton (PTON) releases new $3,200 Peloton row (PR Newswire)
Amazon (AMZN) had record Prime signups during Thursday Night Football three-hour period (CNBC)
Spotify (SPOT) announces launch of audiobooks for U.S. listeners (CNBC)
General Motors (GM) and Lithion announce an investment and strategic partnership agreement to pursue a circular EV battery ecosystem (PR Newswire)
Honda (HMC) aiming to reduce production by 40% at two Japanese plants (Reuters)
Home Depot (HD) store in Philly looking to unionize, a first for the chain (The Philadelphia Inquirer)

Corporate Shakeups

Nordstrom (JWN) adopts 'poison pill' (Reuters)
Tanger Factory (SKT) announces new CFO and CIO (PR Newswire)
Peloton (PTON) CIO Shobhana (Shobz) Ahluwalia leaves the company (Pelo Buddy)
Kohl's (KSS): Ancora Holdings pushing for CEO removal (Reuters)
Freshpet (FRPT): Jana Partners confirmed 9.6% active stake (Reuters)
Amazon (AMZN) PillPack founders to leave (Seattle Times)

M&A Updates

Purple Innovation (PRPL) receives a non-binding LOI from Coliseum Capital Management (Nasdaq)
BorgWarner (BWA) to acquire charging business of Hubei Surpass Sun Electric (SSE) (PR Newswire)
Walgreens (WBA) to buy remaining stake in Shields Health for $1.37 billion (Reuters)

Financing Updates

F45 Fitness (FXLV) files equity offering of 50 million shares (Filing)
Royal Caribbean (RCL) extended the maturity date of loan advances held by consenting lenders by twelve months to October 2024 (Filing)
Toyota Motor (TM) to extend the repurchase period for shares of its common stock to November 1, 2022 from June 17, 2022 (Business Insider)

Regulatory Updates

Amazon’s (AMZN) $1.7 billion purchase of iRobot (IRBT) under FTC investigation (WSJ)
California seeks to ban sales of diesel big rigs (Los Angeles Times)
McDonald's (MCD) will face $10 billion racial discrimination lawsuit (NYP)

Macro Updates

Housing paralysis engulfs US buyers with prices starting to fall (Bloomberg)

Paul Cerro @paulcerro

New WSJ Prime Rate hits 6.25% as of this AM, the highest rate the in last 10 years For those of you that don't know what it is, products utilizing a prime rate can include mortgages, home equity lines of credit and loans, and car loans Basically everything the consumer has/uses

Liz Ann Sonders @LizAnnSonders

Consumers are struggling with longer-term credit-card debt … 60% of debtors say they have been in CC debt for at least a year per ⁦@CreditCardsCom⁩ survey, up from 50% a year ago … share of those in debt for >2 years has climbed from 32% to 40%

Paul Cerro @paulcerro

"Credit card balances rose by a collective $46 billion from the first to the second quarter of 2022, according to the Federal Reserve Bank of New York. That increase was among the largest seen in its data since 1999, and was at least partly driven by inflation."

jason@calacanis.com @Jason

The amount of Dry Powder in VC is wild. Docket All In source @PitchBook

Cedar Grove Capital Management @cedargrovecm

I really don't think people understand the issues that a strong dollar currently presents $JPY down ~20% YTD $EUR parity $GBP down ~16% Multinationals getting killed YTD just from existing abroad

Cedar Grove Capital Management @cedargrovecm

Like this tidbit from @charliebilello "But isn’t retail sales growth of 8.9% over the last year evidence of a strong economy? Not necessarily when you have inflation running over 8%. If you adjust for higher prices, the year-over-year growth rate in retail sales falls to 0.6%."

Until next time,

Paul Cerro | Cedar Grove Capital

Personal Twitter: @paulcerro

Fund Twitter: @cedargrovecm

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