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- Amazon Makes Big Move
Good Morning!
Happy Thursday! One more day until Friday:
šAmazon makes big announcement
šWalgreens earnings are in
šJP Morganās stress test
AMAZON: Low-Priced Section
Amazon is launching a new section for low-priced fashion and lifestyle items, allowing Chinese sellers to ship directly to U.S. consumers. Announced at a conference for Chinese sellers, this move targets competition from Temu and Shein.
Source: CNBC
The storefront will offer unbranded items under $20, like clothes, arm weights, and phone cases, with delivery times of nine to 11 days. This model, similar to Shein's, allows sellers to save costs and test new products with small-batch production. China-based merchants have long been significant on Amazon. To boost this, Amazon opened an innovation center in Shenzhen and reduced fees for clothing under $20. In 2023, items sold by Chinese sellers grew over 20%, and merchants with sales over $10 million increased by 30%.
šÆ GRIT TAKE: This is a bold move for Amazonā¦upgrade to VIP now to read the full GRIT Take!
EARNINGS: Walgreens
Walgreens cut its guidance due to a worsening retail environment and announced more store closures as its new CEO seeks a turnaround. Shares fell ~15% before markets opened, while CVS shares also dropped 3%. Walgreens now expects full-year adjusted earnings of $2.80 to $2.95 per share, down from the previous quarterās forecast.
Source: Walgreens
Adjusted earnings for the quarter ending May 31 were 63 cents per share, below analysts' expectations. The company faces ongoing challenges and expects these to persist into the next fiscal year. Walgreens also reported a $431 million writedown of its international Boots chain. Under CEO Tim Wentworth, Walgreens is shifting focus from retail to healthcare, aiming to increase cash flow and growth. The health-care unit, including VillageMD, posted $2.1 billion in revenue, a 7.6% increase. However, the US retail pharmacy unit saw only a 2.3% revenue increase, totaling $28.5 billion.
JP MORGAN: Stress Test
JPMorgan Chase revealed late Wednesday that the Federal Reserve overestimated a key income measure in the bankās stress test, indicating its losses should be higher than the regulator reported.
Source: CNN
In an unusual move, JPMorgan issued a press release just before midnight ET addressing the Fedās findings. The bank stated that the Fedās projection for āother comprehensive incomeā (OCI) was too high. The Fed assigned JPMorgan $13 billion in OCI, more than any of the 31 banks tested, and estimated $107 billion in losses from loans, investments, and trading. If JPMorganās analysis is correct, stress losses would be slightly higher than the Fed disclosed. This error may delay JPMorganās share repurchase plan, expected to be announced Friday. This news complicates the Fedās announcement that all 31 banks passed the stress test, maintaining capital levels and lending capacity.
Chart of the Day
šCredit Card Interest Rate Above 20%
Source: Game Of Trades
GRIT Meme of the Day š
Tag GRIT Capital on social media for a chance to be featured in our meme or Tweet of the day in our GRIT daily newsletter! š
Source: @wallstmemes
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