Good Morning!
Get ready! We have an exciting newsletter for you. Here’s what is going on today:
👉 Home Depot beats estimates 🏠
👉 Amazon restructures gaming division 🎮
👉 Stellantis shifts EV strategy 🚗
Let’s get into it!
HOME DEPOT: Unpacking Mixed Earnings
Home Depot's recent earnings report revealed a slowdown attributed to weaker sales, yet the company still managed to surpass the expectations of Wall Street analysts. Home Depot mentioned that smaller improvement jobs are still showing robust performance, which forms a significant portion of its business operations.
The company experienced a 3.1% decline in sales at stores open for at least a year, primarily due to a slowdown in the housing market, which has been a challenging factor for the business.
Source: Business Journal
The retailer was cautious about its prospects in the upcoming months, refining its projections for the full year. Home Depot now expects its annual sales to decrease by 3% to 4% compared to the previous year, a slight adjustment from its earlier forecast of a 2% to 5% decline. Additionally, the company predicts that its earnings per share will decrease by 9% to 11%, which is a narrower range than its previous estimate of a 7% to 13% fall.
According to government data, housing starts in the first nine months of this year have fallen by 12%.
Earnings:
EPS: $3.81 vs. $3.76 expected
Revenue: $37.7 billion vs. $37.6 billion expected
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AMAZON: Gaming Division Overhaul
Amazon's strategy shift in its gaming division was detailed in a recent internal memo, as first reported by CNBC. On Monday, the company announced a significant restructuring, which includes discontinuing its Game Growth and Crown Channel initiatives. This realignment is part of Amazon's new focus on developing and launching its own game titles, moving away from supporting streaming and third-party games.
The restructuring will result in the termination of more than 180 jobs within the Amazon Games division. Christoph Hartmann, the vice president of Amazon Games, outlined in the memo to employees that the company's future efforts will concentrate on upcoming projects. These include games like "Throne and Liberty" and "Blue Protocol," as well as anticipated titles, such as "Tomb Raider" and the "The Lord of the Rings" series. This marks a significant pivot in Amazon’s gaming strategy.
Source: Protocol
Recently, Amazon has undergone the most significant layoffs in its history, eliminating 27,000 positions since the previous fall under the leadership of CEO Andy Jassy. This move is part of a broader cost-reduction effort by Jassy, who has been steering the company through a period of economic challenges, including rising interest rates and inflation. In addition to the job cuts, Amazon has implemented a freeze on corporate hiring and has been actively seeking ways to reduce expenses across various departments of the company.
STELLANTIS: Shift in EV Strategy
Stellantis, Chrysler's parent company, has embarked on a significant workforce reduction effort in its North American operations, seeking to cut costs amid industry-wide economic challenges. On Monday, the company announced its new strategy: offering voluntary separation packages to a substantial segment of its U.S. white-collar workforce. This initiative targets 6,400 of the 12,700 non-bargaining unit employees in the U.S., specifically those who have been with the company for five or more years.
This move by Stellantis reflects a broader trend in the U.S. automotive sector, where major players are adjusting their strategies in response to economic uncertainties and the imperative to invest in new technologies, such as electric vehicles.
Source: freep
As part of this industry-wide shift, other major automakers like General Motors and Ford Motor have also reduced their salaried staff over the past year, highlighting a collective effort to streamline operations and manage expenses.
Headlines You Need To Know: 🎙
Inflation cooled to 3.2% last month
The world’s best and brightest are moving to these countries
Apple gets 36% of Google's revenue in search deal
House Speaker Johnson predicts bipartisan spending bill
UBS sees tons of rate cuts next year
British fintech Wise sees a 280% boost in profits due to interest rates
Airlines are feeling the impact of the Israel-Hamas war
Look past gas prices for the state of inflation
With interest rates above 9%, small businesses hit the brakes
Why big oil is combining agriculture and solar energy production
Consumer Banking Woes 💳
Goldman Sachs just openly admitted to a massive failure. In 2016, Goldman Sachs launched a consumer banking division with the goal of creating a new revenue stream that could even out the rocky nature of its trading business. It makes sense, right? One of the most famous investment banks ever would be successful in consumer banking. Wrong. Goldman launched their Marcus Savings account in 2017, but it never gained any traction. So, Goldman turned to the largest company in the world and launched the Apple Credit Card. Unfortunately, the partnership didn’t go as planned, and Goldman lost $1 billion.
Source: Payments Journal
Their plan the whole time was to have a plethora of card partnerships, but after the Apple flop, only General Motors wanted to do business with them. Goldman is on the verge of closing the doors on their venture into consumer banking after an almost $5 billion loss.
Chart of the Day
📊 The Performing Stocks Over The Last 20 Years
Monster Beverage leads the way with a 39% annualized return
Source: CNBC
GRIT Meme of the Day 😂
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Source: @wallstreetoasis
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