PELOTON: Pedaling Through Headwinds

Peloton did not have a good earnings season. For the quarter concluding on September 30, the company registered a net loss of $159.3 million, which translates to $0.44 per share. This marked an improvement from the previous year's loss of $408.5 million or $1.20 per share.

Revenue figures also shifted, with sales receding to $595.5 million from $616.5 million the previous year.

Looking ahead to the holiday quarter, Peloton projects its revenue to lie between $715 million and $750 million. This forecast indicates an 8% dip at the midpoint when compared against the same timeframe last year. Notably, this estimate lags behind the anticipated $763.2 million for Peloton's fiscal second quarter.

Peleton has announced multiple partnerships as an attempt to return to pandemic levels. These partnerships include Lululemon and the NBA. This is the first time Peleton has shared its content with another company, but they believe Lululemon is the perfect partner. In terms of the NBA deal, Peleton users will be able to work out and stream NBA games at the same time. In a bid to rejuvenate sales of its connected fitness products, which have seen a downturn, Peloton has expanded its hardware offerings. The company has introduced its Row machine to the Canadian market and launched its Bike and Bike+ in Austria, marking its fifth international market outside the U.S.

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STARBUCKS: Brewing Success - Steaming Ahead!

Starbucks reported an 11% surge in revenue for the July-September quarter, amassing $9.4 billion and outpacing Wall Street's projection of $9.3 billion.

In the U.S., the brand experienced an 8% rise in same-store sales, and factors like a 2% growth in store visitors and increased average spending on specialty items played a role. On a broader scale, global same-store sales climbed by 8%, notably exceeding the forecasted 6.8% increase.

Further enhancing its global presence, the Seattle-based coffee giant expanded its reach by inaugurating 816 new stores this quarter, pushing the total number of Starbucks outlets worldwide over the 38,000 threshold.

But Starbucks isn't just expanding; they're innovating at home, too. A major $450 million makeover is underway for its North American branches, initiated last fall. This initiative is poised to refine its operational efficiency by introducing advanced workstations for faster iced drink production, a category that remarkably represents 75% of its U.S. sales. Additionally, the revamp includes the rollout of new ovens and warmers, optimizing its hot food segment.

Earnings: 

Revenue: $9.4B vs. $9.3B estimated

Earnings Per Share: $1.06 vs. $0.97 estimated

FED: Steady as She Goes

The Federal Reserve has once again decided to keep the benchmark interest rates unchanged, marking the second time they have done so in succession. Fed Chair Jerome Powell, in his press briefing, shed light on the bank's stance regarding inflation, stating, “We have a significant journey ahead to bring inflation consistently down to 2%.” The decision keeps the federal funds rate steady in its 5.25%-5.5% bracket, where it has been positioned since July. Meanwhile, the committee shared an optimistic outlook on the economy this Wednesday.

Powell also emphasized that the committee's decisions for the approaching December meeting are yet to be determined, adding, “The committee remains committed to taking whatever steps deemed necessary at any given moment.”

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SAUDI ARAMCO: Oil Giant in the Middle East 🛢️

This company made $122 billion in profits last year and is arguably the most influential company in the world. Saudi Aramco is a Saudi Arabian company that brought in almost $600 billion in revenue in 2022 while producing 12 million barrels of oil a day. In 1933, Standard Oil and Texaco set up a new concession agreement with Saudi Arabia, allowing them to explore for oil. However, they had trouble finding oil, and the project was almost canceled. Six years into the project, Standard Oil finally struck oil.

By the 1950s, Aramco was owned by four shareholder companies based in New York. The Saudi Arabian government made the decision that they wanted to own Aramco fully, and they started to buy the assets slowly. By 1980, the Saudis had complete control of the company and had made an absolute fortune. Due to the rise of EV cars, the Saudis have started diversifying their investments into Formula 1 racing, LIV Golf, and tourism-related ventures.

Chart of the Day

California GDP vs. Select Countries

California's GDP is larger than most countries. For reference, Canada reported 2 trillion in GDP in 2021!

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