Interest rates on store credit cards have hit records highs, according to a new report from CreditCards.com. The average card has an APR of 23.84%.
Best Buy just got an Uber-sized lesson in surge pricing, and how not to do it. Hoping to capitalize on the (reportedly) pent up interest in the iPhone X, Best Buy, which also sells all iPhone models via carrier installment plans that let customers pay for the devices over several months, decided to hike the full, upfront price by $100, with the retailer charging $1,099 and $1,249 for the two iPhone X configurations; Apple’s pricing is $999 and $1,149. Danielle Schumann, a spokesperson for Best Buy, tried to explain the fact that the company is overcharging for the iPhone X in a statement to Bloomberg, which courtesy of The Verge is included below for its sheer ridiculousness. “Our prices reflect the fact that no matter a customer’s desired plan or carrier, or whether a customer is on a business or personal plan, they are able to get a phone the way they want at Best Buy. Our customers have told us they want this flexibility and sometimes that has a cost.” In other words, Best Buy was under the impression that its customers would like to pay more to buy phones from it, as opposed to the cheaper retail cost offered everywhere else the iPhone X is sold. That impression was dead wrong. As Bloomberg reports today, Best Buy has stopped some sales of the iPhone X and iPhone 8 after consumers complained about the retailer charging a $100 premium on the already record expensive smartphones. Fast forward to today, when a much less funny Danielle Schumann makes a repeat appearance: "Although there was clearly demand for the un-activated iPhone X, selling it that way cost more money, causing some confusion with our customers and noise in the media. That’s why we decided a few days ago to only sell the phone the traditional way, through installment billing plans." By then it was too late, and last week consumers took to Twitter to slam the completely unwarranted surcharge: "Never buying from you again," one Twitter user wrote. "Charging $100 premium due to demand is treating your customer like dirt." Whereas Best Buy would get rebates from carriers when it sold phones that are already set up to work on the carriers’ networks, it doesn’t get that money when devices are sold without carrier activation. And yet, Apple, carriers and some other retailers stick to the official pricing. Best Buy thought it was better, and the result is the blowback it is facing now. Then again, perhaps it still hasn't learned its lesson: a check on Best Buy's website shows that the retailer is still selling older iPhone models, including the iPhone 7.... at a $50 premium.
Zacks Industry Outlook Highlights: Amazon, Best Buy, Macy's, Target and Home Depot.
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Do Retailers Really Have Solutions to the Amazon Challenge?
Best Buy is selling the iPhone X for $100 more than other retailers. The company's reason for the price increase struck many people as nonsensical. With a $999 starting price, it's the most expensive model Apple has ever made.
Holiday Fervor, Long-Term Trends Show Opportune Retail Sector
Sturdy sales performance across HOKA ONE ONE and Teva brands coupled with lower cost of sales and SG&A expenses that enabled Deckers (DECK) to post better-than-expected results.
(Reuters) - Apple Inc, General Motors Co, Best Buy Co Inc and others have joined a coalition of top companies lobbying the U.S. Congress for young, illegal immigrants to have a path to permanent residency, the group said on Thursday.
Just days after Third Point's Dan Loeb took a victory lap in his latest letter to investors, boasting a 14.5% YTD performance, outperforming the S&P and virtually all of his peers, a decidedly more downcast letter was released today by Greenlight's David Einhorn, who also had a good quarter, generating 6.2% in Q3, which brought his YTD return to 3.3% after a subpar first half. Yet despite the solid Q3 performance, Einhorn admits that "the market remains very challenging for value investing strategies, as growth stocks have continued to outperform value stocks. The persistence of this dynamic leads to questions regarding whether value investing is a viable strategy. The knee-jerk instinct is to respond that when a proven strategy is so exceedingly out of favor that its viability is questioned, the cycle must be about to turn around. Unfortunately, we lack such clarity. After years of running into the wind, we are left with no sense stronger than, “it will turn when it turns.” Such an open-ended answer, however, is a problem for a fund which famously opened a basket of "internet shorts" several years prior, and which have continued to rip ever higher, detracting from Greenlight's overall performance. This, in turn, has prompted Einhorn to consider the unthinkable alternative: "Might the cycle never turn?" In other words, is the market now permanently broken. Einhorn goes on to explain that his strategy "relies on the assumption that the equity value of a company equals the market’s best assessment of the current and future profits discounted at the company’s cost of capital. Our ability to outperform often comes from our skill in finding opportunities where the market has misestimated current or future profitability or miscalculated the cost of capital by over- or underestimating the risks." It is here than an unexpectedly exasperated Einhorn emerges: Given the performance of certain stocks, we wonder if the market has adopted an alternative paradigm for calculating equity value. What if equity value has nothing to do with current or future profits and instead is derived from a company’s ability to be disruptive, to provide social change, or to advance new beneficial technologies, even when doing so results in current and future economic loss? It’s clear that a number of companies provide products and services to customers that come with a subsidy from equity holders. And yet, on a mark-to-market basis, the equity holders are doing just fine. Ah yes, the Fed-funded "deflation trade" which lowers prices for goods and services courtesy of ravenous investors who will throw money at any "growth" idea, without considerations for return or profit, because - well - more such investors will emerge tomorrow. After all, in this day and age of ZIRP, what else will they do with their money. Here Einhorn took aim at his favorite "bubble" shorts: Amazon, Tesla and Netflix. This is what he said: When we consider the business performance of our three most well-known “bubble” shorts, we wonder if this alternative paradigm is in play. Last quarter, we noted Amazon.com’s (AMZN) earnings estimates had fallen over the prior few quarters. This quarter, AMZN revealed a much lower level of long-term structural profitability, causing consensus estimates for the next five years to drop by 40%, 22%, 18%, 14% and 8%, respectively. Ordinarily, stocks trading at nosebleed multiples fall sharply when such a dramatic reassessment happens. Instead, AMZN fell less than 1% during the quarter. Our view is that just because AMZN can disrupt somebody else’s profit stream, it doesn’t mean that AMZN earns that profit stream. For the moment, the market doesn’t agree. Perhaps, simply being disruptive is enough. Tesla (TSLA) had an awful quarter both in its current results and future prospects. In response, its shares fell almost 6%. We believe it deserved much worse. So much went wrong for TSLA in the quarter that it is hard to only provide a brief summary. The main near-term problems are poor demand for its legacy vehicles and manufacturing challenges for the new Model 3. Notably, TSLA dramatically reduced its gross margin assumption for the September quarter and publicly blamed ramp-up costs for the new Model 3 sedan. More quietly, the company used the lower gross margin hurdle to offer incentives and to lower the cost of options on the Model S and Model X vehicles, and even offered significant markdowns on showroom models. Given the depth of the price cuts, we were surprised that demand for the Model S and Model X only improved modestly. Meanwhile, it is becoming clear that scale manufacturing is actually a skill. While the CEO makes bold claims about TSLA’s superior prowess, continued production shortfalls, defects and product recalls disprove him. TSLA faces competition from established OEMs that have decades of scale manufacturing experience. Some of TSLA’s presumed market lead in areas like autonomous driving may more likely reflect TSLA’s willingness to put inadequately tested and dangerous products on the road rather than a true technological advantage. Finally, there is Netflix (NFLX), where the quarterly results beat expectations and the shares advanced 21%. Competition is heating up and media companies such as Disney will be removing their content from NFLX to compete directly (bulls used to believe that Disney would pull a Time Warner/AOL and pay-up for the highly promoted but profitless business). NFLX continues to accelerate its cash burn as it desperately tries to compensate for its inability to rely longer-term on licensed content. On the second quarter conference call, the CEO stated, “In some senses the negative free cash flow will be an indicator of enormous success.” To us, all it indicates is that NFLX is capable of dramatically changing the economics of stand-up comedy in favor of the comedians. Perhaps, there really is a new paradigm for valuing equities and the joke is on us. Time will tell. Einhorn also highlights the biggest winners and losers in the quarter including CONSOL Energy (CNX), General Motors (GM) and Uniper (Germany: UN01) which were the largest contributors, while Caterpillar (CAT) short and Mylan (MYL) were detractors. Some more details: Greenlight added long positions in Hewlett Packard Enterprise, Micron and Tempur Sealy; exited a short position on Best Buy and a long position on PVH. The fund's largest disclosed long positions at quarter end were unchanged from the end of 2Q: AerCap, Bayer, Consol Energy, General Motors and gold. The parternships had an average exposure of 118% long and 73% short. The full letter is below:
The Zacks Analyst Blog Highlights: DSW, Shoe Carnival, Williams-Sonoma, Big Lots and Best Buy
As we gear up for the holiday season, we have selected five solid retail stocks that are poised to report earnings beats in the weeks ahead.
The pharma/biotech sector has a number of things going in its favor.
Valeant Pharmaceuticals International, Inc. (VRX) announced encouraging results from the long-term phase III extension study, AMAGINE-2 on psoriasis drug Siliq.
Facebook's (FB) Sheryl Sandberg said that the company was apologetic over how Russian factors misused the platform and is resolved to prevent such recurrences in the future.