Consumer & Retail Report #3: 7/24 Recap
Summary of the Week in Consumer and Retail
Welcome to our Consumer and Retail recap where we share noteworthy headlines, updates, and insights. Never spam.
Table of Contents:
Company Announcements
Industry News
Corporate Shake-ups
Insider Buying/Selling
Regulatory Updates
Macro News
Company Announcements
Starbucks SBUX 0.00%↑ is not selling UK unit.
Spectrum Brands SPB 0.00%↑ and ASSA ABLOY extend agreement for ASSA ABLOY to acquire the HHI division of Spectrum Brands to June 30, 2023.
Funko FNKO 0.00%↑ files for a $100 mln mixed securities shelf offering; also files for 17,318,008 share common stock offering by selling shareholders.
Walt Disney DIS 0.00%↑: Hulu is now the company's fastest-growing streaming service, helped by new content in an attempt to attract a wider variety of viewers.
Apple AAPL 0.00%↑ reports it will slow hiring and spending in some areas of the business next year.
Duolingo DUOL 0.00%↑ announced its official partnership with HBO Max for HBO Original “House of the Dragon” by launching an updated High Valyrian course, the fictional language spoken in the show.
La-Z-Boy LZB 0.00%↑ finalizes plans for previously announced closure of its Newton, MS facility.
Grove Collaborative GROV 0.00%↑ entered into a Standby Equity Purchase Agreement with YA II PN, LTD for $100 million.
Honest Company HNST 0.00%↑ to expand distribution to Walmart WMT 0.00%↑ which will be available on Walmart.com and will launch in thousands of Walmart stores in the fall.
AMC Entertainment AMC 0.00%↑ repurchases $72.5 million of its second lien debt at a 31% discount.
Chipotle CMG 0.00%↑ to close Maine store where workers were training to form a union.
Why this matters? - The closure comes amid a broader unionization push across the country, mainly being driven by Starbucks. SBUX 0.00%↑ has unionized 180 stores in the last year and fear of a spread to other chains such as Apple has finally made its way to Chipotle.
Jerash Holdings JRSH 0.00%↑ announced it will begin manufacturing clothing for Skechers SKX 0.00%↑, beginning with around 500,000 women's polo shirts each year for the footwear and apparel company.
Industry News
Macau to reopen casinos on Saturday, July 23, following COVID-19 closures. LVS 0.00%↑ WYNN 0.00%↑
lululemon athletica LULU 0.00%↑ employees at Washington, D.C. store filed to unionize.
Why this matters?- A few big names have already had some stores start to unionize, Starbucks is the biggest one with Apple having one store petitioning to unionize as well. In today’s age, it seems like this unionization effort is spreading like the early days of the plague and can have some serious impacts on company retail costs should it continue. Looks like lululemon is now the latest company to succumb to this movement on top of Chipotle closing a store where employees were trying to unionize.
Spruce Point Capital Management put out a short report on Skechers SKX 0.00%↑ calling for another retailer to fall victim to rising inventory and lackluster sales.
Corporate Shakeups
Fresh Del Monte Produce FDP 0.00%↑ – Private equity firm I Squared Capital is considering a takeover, as one option to expand a partnership agreement struck in 2021.
Etsy ETSY 0.00%↑, announced that Kruti Patel Goyal, currently Etsy's Chief Product Officer, has been named Chief Executive Officer of its subsidiary Depop.
Electronic Arts EA 0.00%↑ CTO Ken Moss to depart; company moves to a structure with two pillars - Create & Development and Enterprise, naming two separate CTOs for each division.
Coca-Cola KO 0.00%↑ announces that John Murphy will become president and chief financial officer effective Oct. 1.
James P. Murphy, an executive VP at Costco COST 0.00%↑, sold 1,500 shares at an average price $525 for ~$788,000. This represents ~4% of his total shares.
Long-time WWE 0.00%↑ chairman and CEO Vince McMahon announces retirement from the company amid misconduct allegations.
Regulatory Updates
Apple sued by payment card issuers, alleging antitrust competition issues over Apple Pay policies
Why this matters? - A class-action lawsuit against Apple is accusing the company of illegally profiting from payment card issuers through its Apple Pay policies, allegedly extracting up to $1 billion annually in fees in violation of federal antitrust law. This behavior fits in with other “monopolistic” claims made in the past against the company.
Insider Buying/Selling
RH RH 0.00%↑ Director Mark S. Demilioo sold 1,224 shares at $261.43 - $261.90 worth ~$320K.
Autozone AZO 0.00%↑: William C Rhodes III, Director, Chairman, President, and CEO sold 2,958 shares for $6,526,317 on July 18.
Macro News
Russia strikes Odessa Port after signing a deal to unblock Ukrainian grain exports.
Why this matters? - The signed agreement aimed at ending the grain crisis caused by the war, could free up about 18 million tons of wheat, corn and other supplies that have been stuck at Ukrainian ports and grain silos for weeks. That took a turn Friday night when Russia started bombing Odessa again. Wheat futures took a meaningful dip on Friday on the news but with new uncertainty, prices can move upwards again prolonging any commodity inflation occurring right now. This would have a continued impact on food margins (restaurants, etc.) and general food shortages around the world.
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Until next time,
Paul Cerro | Cedar Grove Capital
Personal Twitter: @paulcerro
Fund Twitter: @cedargrovecm