McDonald’s Now Delivers From 2,000 Of Its Locations, Plus Michael Kors Stock Is Getting Hammered
Enjoy your June 1st hand-crafted Brew!
QUOTE OF THE DAY
“We never sue” — Alphabet CFO Ruth Porat at the Code Conference yesterday in response to suing Uber over the Anthony Levandowski scandal. That’s one heck of a poker face, Ruth.
- Financial stocks felt the pain as two of the largest U.S. banks signaled lower second quarter trading
- Pair that with a drop in oil prices during trading hours and reports that former FBI Director Comey will publicly testify against President Trump, and that was more than enough to push stock indexes lower on the day
- The Fed’s Beige Book painted a relatively upbeat view of the economy, keeping the chance of a June rate hike at 89%
We’ll Have Fries With That
And they’re not the only ones
The strategy reflects a powerful shift into fast-food delivery.
Just this month Wendy’s
(+0.12%) announced a partnership with DoorDash to deliver food at 135 locations in Texas and Ohio, and believe it or not, Denny’s
(+2.06%) will now bring pancakes, burgers and milkshakes right to your door.
Time for your stomach to thank the rise of third party on-demand delivery.
Companies like UberEats, DoorDash, Olo and others offer a fleet of drivers ready to deliver at the push of a button.
And fast-food joints are enjoying the fruits of their dear drivers’ labor.
Why does that make sense?
One word: upselling.
For example, think about how Domino’s
(+1.55%) sucks you into adding extra toppings or buying its chocolate lava cake in that final second before checkout. Maybe not this time, maybe not next time, but at some point, you are going to end up nose-deep in that chocolate surprise.
And the results aren’t just hitting your waistline
So give a little grunt, brush those potato chips off your shoulder, look yourself straight in the mirror and say…”just one more bite.”
The Luxury Woes Continue
(-8.52%) plans on closing 100 to 125 of its 827 retail locations (but will look good doing it) after a poor earnings report. Shares plunged 11% to their lowest point in over five years.
Cue Mr. Krabs’ tiny violin.
This shouldn’t be too much of a shock in the wake of a brutal retail earnings season plagued by lower consumer foot traffic.
There is a plan, though.
CEO John Idol (no, not Michael Kors, we checked) believes the combo of $60 million in annual savings from store closures, expansion in Asia and focus on online buying will keep the company sexy and successful. Best of luck, John.
It’s a Goallllllllllllll
(Note: read as an overly-enthusiastic, English commentator)
Ohhh and the Tottenham Hotspurs have done it! Just when you thought it was out of sight, they’ve pulled an absolute rabbit from a hat and secured $900 million in funding from Goldman Sachs
(-3.28%), Bank of America
(-1.86%), and HSBC Holdings
It’ll go towards a brand new 61,500 seat stadium, and dare we say, it’s absolutely brilliant!
(Seriously, don’t break character)
The stars are certainly shining on the Spurs today, as gameday revenues should double up to $128 million per season. Bloody hell, this ranks them as the 10th most valuable European soccer club.
And, with the English Premier League’s recent $6.6 billion deal for domestic television viewership, the Tottenham Spurs should have a bright future ahead of them.
That’s all for now, I’m Andy Gray alongside Martin Tyler and you’ve been reading Morning Brew.
What Else Is Happening…
- GE signs $5.58 billion worth of deals in Vietnam for power generation and aviation services. Billion…with a “B”.
- Waze looks to break into ride sharing with tests rolling out on June 6th in California. Mark your calendars.
- Apple is allegedly set to announce a Siri-powered smart-speaker at its developer conference next month.
- The New York Times said it was offering severance packages to editors as it looks to crowdsource editing through its reader base.
- Friday (May 26): Big Lots (+) Earnings; GDP (+), Consumer Sentiment (-)
- Monday: Memorial Day (Markets Closed)
- Tuesday: Consumer Confidence (-), Dallas Fed Manufacturing (+)
- Wednesday: Hewlett-Packard Enterprise (+/-), Michael-Kors (+) Earnings; U.S. Pending Home Sales (-)
- Thursday: Dollar General, Mobileye, Lululemon, Express Earnings; Weekly Jobless Claims, Motor Vehicle Sales
- Friday: May Jobs Report
The Backstory: Howard Schultz
Welcome to The Backstory, the Brew Crew’s new segment that highlights the journeys of innovators and disruptors!
Howard Schultz is the exec chairman of Starbucks, a $92 billion company with over 24,000 locations and 254,000 employees.
The guy is worth $3.1 billion, is a former owner of the NBA’s Seattle SuperSonics and a former board member for Jack Dorsey’s Square.
So, how did Howard Schultz make billions from beans?
His rags-to-riches story is one of relentless passion and true drive.
The lower-class Brooklynite landed his first “real” job in sales at Xerox, quickly graduating to full sales representative.
Selling word processors wasn’t his thing (wonder why…), so he accepted a role at coffee-maker manufacturer Hammarplast, ultimately leading a staff of twenty as General Manager.
In 1981, Schultz visited a client that had ordered a boatload of plastic cone filters.
That client…was Starbucks.
Intrigued by the vision, the 29-year-old landed a job at the three-store coffee-bean company as Director of Retail Operations and Marketing.
Schultz’s “aha” moment came while on a buying trip in Milan, Italy. He noticed the country’s 200,000 espresso bars acted as a meeting place, where baristas also called customers by first name.
Cafes were a lifestyle, not a destination––caffeine-infused epiphany, complete.
Schultz unexpectedly left Starbucks in 1985 after failing to convince the company’s founders to replicate the Italian-like coffee experience he grew to love.
He then raised $1.6 million to start coffee company Il Giornale, and two years later, bought the Starbucks name from its original founders (who decided to focus on Peet’s Coffee) for $3.8 million.
You know the rest…
Interview Question of the Day
Three ants are sitting at the three corners of an equilateral triangle. Each ant randomly picks a direction and starts to move along the edge of the triangle. What is the probability that none of the ants collide?
Business Documentary of the Day
Betting On Zero follows the story of outspoken hedge fund manager Bill Ackman and his massive short position in Herbalife, while he tries to convince the general public that this global nutrition company is a giant pyramid.
Meanwhile, Herbalife CEO Michael O. Johnson tirelessly defends the company’s $6.7 billion reputation. We loved it and so will you. Plus, the 100% rating on Rotten Tomatoes doesn’t hurt.
Stat of the Day
That’s how much Amazon could be refunding parents for accidental in-app purchases made by their children, according to an FTC announcement on Tuesday.