Patagonia’s Doing Something Great For The Environment, Plus Barnes And Noble Blames The Election For Poor Sales

By 11.23.16

morning-brew-new

“We all stand to benefit from a healthy environment” — Patagonia CEO Rose Marcario, backing up his company’s decision to give away 100% of its Black Friday earnings to over 800 environmental organizations around the world. Just one more reason to like Patagonia.

Market Snapshot

  • U.S. stocks continued to rally yesterday, with the Dow Jones closing above 19,000 for the first time ever. Each major index finished at record highs again, and existing home sales jumped to their highest levels in nine years
  • Retail stocks received a boost yesterday, with the S&P Retail Index closing up 1.7% and reaching an all time high of its own just three days before Black Friday

“The Happiest Place on Earth”

…Is about to get a whole lot “happier”at least in Hong Kong. Yesterday, Disney (+0.08%) unveiled a $1.4 billion expansion plan for its Hong Kong Disneyland theme park. But before you go oohing and aahing, you should know that the expansion is meant to revive what’s been a struggling theme park. Hong Kong Disneyland recently reported a $19 million loss thanks to a slowing Chinese economy and political turmoil in Hong Kong. But don’t buy your plane ticket to Hong Kong just yet. The project won’t begin until 2018 and still needs approval from both Hong Kong’s legislature and Disney’s board.

When You Might Need to Get Back Together

…While it’s only been one year post-breakup, Hewlett Packard Enterprise (-1.08%) and HP Inc. (-0.31%) dropped together Tuesday afternoon after releasing quarterly earnings. Many were thinking HP was going to just continue downward, like it has for the past several months. Remember, this is the branch that retained the old printer and PC businesses, while Hewlett Packard Enterprise is the new-school information technology stuff. Old-school HP has been cutting jobs and other costs as it tries to boost profitability in a difficult market segment. Maybe the breakup wasn’t the best idea after all.

Can’t Take The Blame

…Barnes and Noble (+11.45%) is blaming the election for its sales decline. But the beaten-down brick-and-mortar retailer still soared—it reported a second quarter loss that was smaller than expected, and revenue of $858.5 million also beat expectations. Plus, there’s been a jump in online sales and pre-orders for the company’s new $50 Nook. The fix? The holiday season of course, plus new concept stores aiming to draw people in and keep them there.

Anything You Can Do

…I can do better. Or so that’s the mentality soda companies have nowadays. Yesterday, Dr. Pepper (+2.64%) announced it would drop $1.7 billion for coffee-fruit drink company Bai Brands. So what’s rival PepsiCo (+0.62%) ‘gon do? Pull off a competing purchase of its own, of course, as it acquired probiotics drink maker KeVita for over $200 million. What’s the big idea, soda giants? Well, with volume for carbonated beverages dropping for a 12th straight quarter, state governments imposing soda taxes and consumers hopping off the sugary bandwagon, beverage companies have scrambled to scoop up healthier brands to hedge their product portfolio. Consumers nowadays want healthy AND tasty…we wish the best of luck to the soda giants.

Trump Stirs the Pot

…By vowing to ditch the Trans-Pacific Partnership (TPP) on his first day in office. U.S. president-elect Donald Trump has been adamant about bringing jobs back to America, and he apparently plans to start by abandoning the TPP, a trade pact established by the Obama administration. The TPP aimed to lower tariffs and boost trade between the US, China, Japan and nine other countries that account for a whopping 40% of the world economy. So what happens if Trump actually shuts it down? In the words of Japan’s Shinzo Abe, the agreement “would be meaningless without the United States.”

Other Stories

Economic Calendar

When Investing in Education Doesn’t Work

UK-based Pearson, the self-proclaimed “world’s learning company,” took a risk…and it didn’t pay off. Instead of cashing in on the new Common Core academic standards, sales have plummeted. And investors have felt the pain: in the past three years, Pearson’s stock has fallen 32% and the company has laid off thousands of employees. Here’s a closer look:

  • The Common Core was initially adopted by 46 states to improve instruction and curriculum across the country. But after coming under serious political fire, almost a dozen states have repealed or amended their Common Core standards. Too bad Pearson invested more than $125 million in building its digital learning tools.
  • …That literally didn’t work. In 2013, a school district in Los Angeles tested Pearson’s digital coursework and apps on iPads. After teachers stopped using the supplements (in part because students couldn’t download materials), Pearson reimbursed the district $6.4 million.
  • Other Pearson products are floundering too. Believe it or not, textbook sales are dropping, presumably due to college closures (Pearson’s largest revenue stream in North America) and reduced enrollment. Not doing your homework doesn’t just hurt you—it costs Pearson a fortune.

Interview Question of the Day

You have 1023 lemons and 10 bags. You have to distribute these lemons in these 10 bags in any way you choose. But when I ask for a certain number of lemons, you have to give them in terms of bags without transferring the lemons from other bags. How do you distribute the lemons? (Answer)

Stat of the Day

A new report from a United Nations agency claims that 47% of the world’s population now uses the internet—up from 43% just one year ago. Which country had the highest percentage? Iceland at an incredible 98.2%. The lowest? Niger at just 2.2%.

Food for Thought

Voting to leave the European Union has cost the UK around $1.5 trillion (£1.2 trillion) in wealth, according to the latest Global Wealth Report. The biggest factor? The pound falling 15% since the vote. Oh, and leaving the EU has robbed 400,000 people of their status as dollar “millionaires.” Right in the ego.

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