Top Zany, but Obvious, Things from Earnings Season

Wall Street is smack in the middle of earnings season. Wait, let’s rephrase that, earnings season right now resembles the initial bands of rain that spank Florida before it gets whacked by a hurricane; the power of the storm is felt, to a certain extent. There are all sorts of paths to head down in terms of storylines during a typical earnings season. While the storylines change as one person’s interpretation of facts is usually opposite of another’s (sound smart: that’s what “makes a market”, the difference in opinions by people with money), the comments and numbers released by companies are set in stone unless they are fudged, which would require a restatement in some future period. Today, we attempt to bring zanier facts from earnings season to the surface and tie it into why the average person should give a hoot.

Coach

The go-to destination to buy your girlfriend or wife a handbag at a reasonable price will, by the end of its accounting reporting year in June, have 95 stores in China. A total of $3.2 million in sales per store ain’t too shabby.
Coach has officially waved goodbye to its factory store coupons, effectively raising prices. Sure, the made for factory products are cheaper than those found in the mall stores, but come on, having to pay more for a lower quality item AND not being told about it? No fist pump for Coach executives.

Steel Companies

Yes, we know, who cares that steel companies reported earnings this week when it costs $90 to fill up the Chevy SUV gas tank. Well, start caring, because major steel companies AK Steel and U.S. Steel have raised prices to their customers, and that could be felt upon turning in that gas-guzzling SUV on lease and shopping around for a smaller car made from…steel.

Hershey

Hershey went gangbusters with the corporate jargon on its earnings release, not limited to the comment: “price realization was up 10.9%.” In commonly used English language, Hershey is saying directly to Wall Street (and to the average person not reading financial press releases) that it has raised prices to offset higher costs for sugar, etc. Furthermore, new product introductions won’t be as cheap as a bag of Kisses…Hershey’s advertising dollars are planned up 14% year over year, and they want to recoup that investment by selling more bags of premium candy. Candy, in this case, rots teeth and wallets.

RadioShack

The name says it all, no? Who listens to the radio these days, ears are usually tuned into Pandora, SiriusXM, or the iPod. Anyhow, RadioShack had a very poor quarter on sales and profits as it sold more mobile phones and tablets at competitive prices. This makes us wonder: how will Best Buy survive selling similar deflationary products from humungous stores?