Life

Nike Just Hit Nine Straight Quarters Of Beating Profit Expectations, Plus American Students Taking Talents Abroad

#Morning Brew
by Last Updated

“We sold the bonds the first day that the problems arrived—and that was three months ago.” — Fund manager Bill Gross, discussing Valeant Pharmaceutical’s controversial bonds—which he got rid of faster than a hot potato.

MARKET SNAPSHOT
Big Picture

  • The Dow Jones’ seven-day winning streak came to an abrupt end, as U.S. stocks finished lower amidst heartbreaking news of the terrorist attacks in Belgium, which predominantly impacted travel-related sectors

Alternatives to Watch

  • The value of the British pound saw its largest drop against the dollar since February, as the attacks increased the risk of a Brexit (British exit from the European Union)

Market Movers

  • Renewable energy giant SunEdison plummeted 26% after a report revealed the company was negotiating with creditors—that’s a flashing red light that bankruptcy is on the horizon

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CORPORATE PRIMER

Lucky Number Nine

Nine straight quarters of beating profit expectations—what’s not to like? Yesterday, Nike continued its trend of winning on key numbers—take that, Adidas (and Kanye). To be fair, it wasn’t entirely smooth sailing: this time, the athletic wear company fell slightly short on sales. Nonetheless, Nike’s future orders were up a significant 17% for the quarter, showing that the company’s gear is still in high demand.

Krispy Kreme Earnings: Secret Recipe

Let’s take a look inside Krispy Kreme’s freshest earnings report. This is a tough one to follow—stay with us here: Krispy Kreme announced earnings of $0.22 per share, which luckily beat analyst expectations. On the flip side, revenue came in at $130.4 million, slightly below estimates. And while same-store sales in the U.S. rose close to 3.9%, they fell by just as much internationally. So far, it seems pretty evenly split. Let’s break the tie: the donut maker’s forecast for 2017 fell below expectations. That’s pretty much as mixed as an earnings report can get, folks—and while mixed doesn’t mean bad, they’re not what we would call appetizing. As a result, shares fell by up to 5% after hours.

Tyson KO’ed

Not to be confused with the celebrity boxer, Tyson Foods got hit hard with a $5.8 million lawsuit settlement on Tuesday. The arena? A pork processing plant (delicious), where more than 3,000 employees are saying they got cheated out of hundreds of hours in overtime pay. Tyson escalated the match to a new arena, the arena of all arenas, the Supreme Court, and countered that employees used data averages rather than individual cases to prove their claim. Then court happened, and Tyson’s argument was knocked down with a swift punch to the gut. Now, about that $5.8 million…

Lumber Liquidators in Remission

America’s second-most hated stock (number one starts with “V” and ends with “aleant”) went from zero to 100 real quick yesterday after a very favorable ruling from California’s Air Resources Board that Lumber Liquidators’ wood was cancer-free. Well, kind of—the CARB didn’t find any wrongdoing, and Lumber Liquidators didn’t acknowledge any wrongdoing, so we’ll just leave it for now. The facts: Lumber Liquidators still agreed to shell out $2.5 million and agreed to voluntary compliance to get back on track, and the stock jumped over 15% following the announcement. Sounds like good news, but it’s a long road to recovery for any product once associated with cancer.

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OTHER STORIES

  • Credit Suisse said to speed up, deepen investment bank cuts
  • Starbucks plans to donate 100% of unsold food in America
  • Yahoo stops daily fantasy sports contests in New York
  • Amazon sues star exec who is defecting to Target

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ECONOMIC CALENDAR

AMERICAN STUDENTS TAKING TALENTS ABROAD

It’s no big surprise that tuition costs have spiraled out of control. The average out-of-state tuition for a private university is over $32,000, with some upwards of $62,000 each year. Not in the mood to be saddled with debt for the rest of your life? You’re not alone. More and more American students are choosing to attend four-year colleges abroad. Here’s why:

  • The number of students enrolled in colleges outside their home countries has risen by 463% since 1975.
  • Taking a page out of the Bernie Sanders playbook, 40 public and private colleges in Europe offer free bachelor’s degrees to Americans and 98 colleges charge under $4,000 per year.
  • How about just for a semester? The number of American students studying abroad has risen by 72% since the 2000-2001 academic year.
  • And yet, despite American students hitting the international stage, international students are also choosing American colleges at an unprecedented rate—up 70% since 2005. Is the grass just greener on the other side, or is an American education worth the price? You decide.

INTERVIEW QUESTION OF THE DAY

I once cashed a cheque at the bank. I had spent £0.05 before I realized the bank clerk had made a mistake. He had transposed the pounds with the pence. I now had exactly twice the value of the original cheque. What was the original cheque’s value? (Answer)

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BUSINESS TERM OF THE DAY

Failed Break — A price movement through an identified level of support or resistance that does not have enough momentum to maintain its direction. Since the validity of the breakout (or breakdown) is compromised, many traders close their positions and the price fails to make the sharp move that many were expecting.

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FOOD FOR THOUGHT

Want a new Fiat? Want the Pope’s car? You’re in luck: Pope Francis’ Fiat is up for auction, with the current bid at $46,000.

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Congrats to Katerine J., a junior at the University of Pennsylvania, for winning last week’s Morning Brew quiz prize! As if it’s not cool enough to get an exclusive shout-out in today’s issue, she’s also taking home some sweet Brew swag. Make sure to open Thursday’s issue (remember, no Brew on Friday due to Good Friday) for this week’s quiz!

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