The Weekly Consensus

The Weekly Consensus

Maeghan Thompson

Story of the Week

Walmart Eyeing Deal to Buy Vizio for More Than $2 Billion

Retail giant Walmart is in talks to acquire Vizio, which sells a popular line of value-priced smart TVs that include an ad-supported free streaming service, in a deal worth more than $2 billion, the Wall Street Journal reported. The deal, if completed, could make Walmart a significant player in the connected-TV advertising business, competing with the likes of Roku, Amazon and Google/YouTube. Walmart and Vizio have declined to comment on the Journal report. Shares of Vizio zoomed up 25% on the report Tuesday, to $9.75/share, pushing the company’s market cap to over $1.9 billion. The stock price of Roku – a competitor to Vizio in the ad-supported streaming market – fell 8.8%. Walmart is a leading seller of low-end retail sales for connected TVs, including its own private-label brand Onn TV, which is powered by Roku’s operating system. “Logically, a purchase of Vizio would allow Walmart to prioritize their products over competing low-end sets” like those from TCL or Hisense,” MoffettNathanson analyst Michael Nathanson wrote in a research note. The prospect of Walmart buying Vizio presents “a significant challenge for Roku,” as through the first nine months of 2023, Walmart is estimated to have accounted for 40% of Roku’s device revenues, Nathanson wrote.

Apparel & Footwear

Guess and WHP Cut Deal to Buy Rag & Bone

Guess Inc. and brand management firm WHP Global are teaming up to buy Rag & Bone.  Under the terms of the deal, Guess will buy all of the operating assets of the New York-based jeans brand. Separately, a 50/50 joint venture controlled by Guess and WHP will acquire the brand’s intellectual property. Paul Marciano, cofounder and chief creative officer, of Guess, said: “Rag & Bone is a brand I have always loved and respected. It is a brand well known for its preeminence in American fashion that over the years has stayed true to its roots and founding values, with an unwavering commitment to quality and authenticity. This acquisition is the first one in the 43-year history of Guess, and I am thrilled to welcome Rag & Bone to our family. I look forward to working with Andrew Rosen and the talented team at Rag & Bone to pursue the brand’s product and market expansion internationally,” Marciano said. Rag & Bone has 34 stores in the U.S., two doors in the U.K. and numerous wholesale accounts. Sales last year tallied about $250 million with adjusted earnings before interest, taxes, depreciation and amortization of $18 million. Guess will contribute $56.5 million to the deal plus an earnout that could go as high as $12.8 million.


The Children’s Place may get a reprieve as investor takes majority stake

The Children’s Place, which days ago said it was scrambling to shore up its finances and may pursue “strategic alternatives,” may get a reprieve. The retailer has accepted new majority-investor Mithaq Capital’s offer to assist with its liquidity needs. The Saudia Arabia-based investment firm and various entities related to it have taken a 54% share in The Children’s Place and intend to nominate 11 people to the board at the specialty retailer’s annual shareholders meeting, the retailer told its shareholders on Thursday. The move carries some complications, as Mithaq’s unsolicited acquisition of shares has triggered a change-of-control clause, which caused The Children’s Place to be in default under its amended and restated credit agreement. However, The Children’s Place said it is working with the lenders on a waiver. With signs that its Q4 would miss expectations, The Children’s Place last week said that it’s working with Centerview Partners and other advisors, lenders and potential lenders on new financing and may consider strategic alternatives. On Thursday, the company reiterated that its board and leadership “are committed to acting in the best interests of all shareholders,” and that for now shareholders themselves are not required to take any action.

Shoe Carnival Snaps Up Work and Family Footwear Retailer Rogan’s Shoes for $45 Million

Shoe Carnival is expanding its retail network with the $45 million acquisition of Rogan’s Shoes, a 53-year-old work and family footwear company with 28 locations across Wisconsin, Minnesota, and Illinois. According to Shoe Carnival, the acquisition was funded with cash flow generated in fiscal 2023 and is expected to be immediately accretive to the company’s fiscal 2024 earnings. The company also expects to generate approximately $84 million in sales and approximately $10 million in operating income, excluding transaction and integration costs next year. The company added that it has an 18-month integration plan in place and expects to capture an additional $1.5 million in synergies annually. It will realize half of the profit synergies by fiscal 2025 and the full amount by fiscal 2026, the company said.

Express moving toward debt restructuring, possible bankruptcy: WSJ

Apparel retailer Express Inc. is preparing for a possible debt restructuring that could include a bankruptcy filing “within weeks,” The Wall Street Journal reported, citing sources familiar with the matter. According to the report, Express has hired M3 Partners and law firm Kirkland & Ellis. Both entities specialize in debt restructuring. The retailer is looking to avoid a Chapter 11 filing by restructuring its debt outside the bankruptcy process, the report said. Express reported total debt of about $275 million at the end of the third quarter, an increase from $235.4 million a year before. Express, M3 and Kirkland & Ellis did not immediately respond to requests to comment from Retail Dive. Over the past several years, the company has undergone a number of changes as it works to improve its performance. Last January, WHP Global closed on a strategic partnership with Express. The two entities formed an intellectual property joint venture under which WHP contributed $235 million for a 60% stake, while Express retained the remaining 40%. The two entities in November announced plans to expand Express internationally, including in Indonesia and Paraguay, and grow its presence in Central America and Mexico. The company also expanded its portfolio last year through a deal with WHP to acquire Bonobos from Walmart for $75 million.

J.McLaughlin opens fifth Long Island store, plans future growth

J.McLaughlin continues to expand its retail store footprint.  The apparel retailer has opened in downtown Garden City, N.Y. The 2,800-sq.-ft. store — the brand’s fifth location in the Long Island area — is designed with a modern “soft palette” featuring J.McLaughlin’s signature blue color. The Garden City location comes amid J.McLaughlin’s ongoing expansion and follows the opening of the brand’s first store in Nebraska late last year. The retailer told Chain Store Age it plans to open 10 to 15 stores this year, with signed leases in place for Viera Beach and Fort Meyers, Fla., and Cashiers, N.C.  In November, J.McLaughlin opened its second ever men’s-only store, in Palm Beach, Fla., and shared plans to open more in the future. Founded in New York in 1977 by brothers Kevin and Jay McLaughlin, J. McLaughlin is owned by private equity firm Brentwood Associates.



Athletic & Sporting Goods

Topgolf Callaway Sees All Segments Grow in Q4 But Loss Widens

Topgolf Callaway Brands ended 2023 on a positive note, beating fourth-quarter internal expectations for both revenue and EBITDA. On a conference call with analysts, company President and CEO Chip Brewer said the performance for the quarter was driven by continued strength in both the Golf Equipment business, the TravisMathew business in the Active Lifestyle segment, as well as better-than-expected performance at Topgolf, where same-venue sales outperformed on strong holiday results, and where he said they continue to drive improvements in venue level profitability.  The company reported consolidated net revenues for the fourth quarter grew 5.4 percent, or +4.8 percent on a constant-currency (CC) basis, to $897.1 million as a result of revenue growth across each of its operating segments.

Brooks Running Exceeds $1.2 Billion in Sales in 2023

Brooks Running finished 2023 with record revenue of $1.2 billion, up 5 percent year-over-year (YoY), and a record 20 million-plus units sold. Despite the mid-single-digit gain for the year, Brooks reported its compound annual growth rate (CAGR) exceeded 14 percent since 2018.  In North America, revenue reportedly increased 7 percent YoY, reaching $1 billion in the region for the first time. Brooks said it executed its multi-channel business strategy as it right-sized inventory, invested in key markets and delivered performance products across regions to drive the brand’s success in 2023.  Brooks said it has maintained the #1 spot in the adult performance running footwear market at U.S. retail from quarter to quarter in 2023, with 21 percent market share for the year when measuring U.S. dollar sales, according to data from Circana.

Xponential Fitness Completes Divestiture of Stride Fitness

Xponential Fitness, Inc. has completed the divestiture of its brand Stride Fitness to Stride Fitness Franchising, Inc., owned by Shaun Grove, the president of Rumble Boxing.  With this announcement, Xponential started a search for Grove’s successor as president of Rumble Boxing. He agreed to remain in his role until then.  As of December 31, 2023, Stride Fitness locations represented less than 1 percent of Xponential’s total studios open. The divestiture of Stride Fitness is not expected to materially impact revenue in 2024. Xponential did not receive any consideration for the divestiture and will provide transition support to the new owner.

Cosmetics & Pharmacy

Cible Skin Gets Verlinvest Investment

French luxury skin care brand Cible Skin has received significant minority investment from Verlinvest. Financial terms of the deal were not disclosed. The investment was made to help the science-backed skin care brand accelerate growth across markets such as Europe, China, the U.S. and South America, as well as to develop new products and treatments based on its patented immune-cosmetic approach. The brand’s 12 face care products, with cleansers, serums and moisturizers, have formulas including natural, clean active ingredients. For their conception, a scientific committee analyzed data from 6,000 faces over three years. The products took five years to conceive before they were launched at the end of 2022.

L’Oreal BOLD Fund Invests in Chinese Fragrance Brand To Summer

L’Oreal has announced that its venture capital fund BOLD (Business Opportunities for L’Oreal Development) has closed a minority investment in Chinese luxury fragrance brand, To Summer. Financial terms of the deal were not disclosed. the investment was made via L’Oreal China’s investment company, Shanghai Meicifang Investment. Li Shen, Founder of To Summer, told WWD, “We hope to collaborate with L’Oreal, with its century-long expertise in global beauty research and innovation, to jointly develop a roadmap for eastern fragrances.” The investment will allow the brand to expand into global markets, L’Oreal said in its 2023 annual results statement, and offer global consumers curated olfactory experiences inspired by eastern art, culture, philosophy and landscapes.

Somafina acquires nutraceuticals manufacturer UST

Somafina, a firm under the umbrella of Heartwood Partners, has acquired UST Corporation, a contract manufacturer specialising in vitamins, minerals, and supplements, for an undisclosed sum. Based in Layton, Utah, UST provides comprehensive services to its clientele, encompassing everything from formulation and product development to manufacturing and packaging. Moreover, UST boasts an internally ISO-certified testing laboratory, highlighting its commitment to the scientific and quality-driven production of advanced supplement varieties and formats.


Discounters & Department Stores

Target adds low-price private label brand

Target announced Thursday the launch of a low price-focused private brand called Dealworthy. The brand includes 400 everyday basics such as paper towels, paper plates, body wash, charging cables and cotton balls. With the new private label offering, Target said it is able to expand its assortment of items starting at less than $1.

4 ways Walmart is working to enhance its growth momentum

Even as consumers continue feeling pressured by inflation and the economic environment, Walmart has been able to sustain solid financial performance. In 2023, the retailer reported a 6.7% rise in total revenue to $611.3 billion. Still, the company is trying to stay ahead of – or at least keep up – with industry changes and shifting consumer expectations. Walmart began this year with several major business announcements. The new initiatives are centered around employee compensation, expanding its physical store footprint and introducing new consumer-facing technologies.

Dollar Tree expands COO role

Continuing its C-suite shifts, Dollar Tree Chief Operating Officer Mike Creedon will expand his role to also lead merchandising and supply chain operations for Dollar Tree and Family Dollar, the company announced Friday. Creedon “will have full end-to-end accountability for delivering a best-in-class store experience for our customers,” Dollar Tree CEO and Chairman Rick Dreiling said in a statement. Dollar Tree Chief Merchandising Officer Rick McNeely, Family Dollar Chief Merchandising Officer Larry Gatta and Chief Supply Chain Officer Mike Kindy will report to Creedon, according to the announcement.



Emerging Consumer Companies

Tiger Woods partners with TaylorMade for Sun Day Red brand
Tiger Woods has partnered with TaylorMade to launch a new apparel and footwear brand called Sun Day Red. The 15-time major winner, who recently ended his long-standing partnership with Nike, will play a significant role in the development of the lifestyle brand’s products. Woods stated that he has learned a lot over the years about adjusting his apparel and footwear to enhance his performance, and he is now ready to share those secrets with the world. The brand is an extension of Woods’ existing partnership with TaylorMade, which began in 2017. This collaboration marks a departure from the iconic Nike “swoosh” logo that fans have associated with Woods throughout his career. Woods had been wearing FootJoy shoes since the 2022 Masters due to the need for greater stability following a car crash in February 2021.


Spacegoods creates mushroom-based powders for energy and relaxation

London-based wellness brand Spacegoods has entered the functional beverage industry with its line of mushroom-based powder blends. The company, founded by e-commerce entrepreneur Matthew Kelly, aims to enhance energy, relaxation, mood, and general well-being with its products. Spacegoods’ flagship product, Rainbow Dust, is a coffee alternative that contains 80 milligrams of caffeine and comes in flavors like chocolate, vanilla cinnamon, and chocolate orange. The brand also offers an Astro Dust product designed for relaxation and sleep. Both formulations include mushrooms such as Cordyceps and Lion’s Mane, which have been shown to positively impact cognitive function and mood. Since its launch in April 2022, Spacegoods has attracted over 75,000 customers and operates mainly through its website and Amazon. The company recently raised £2.5 million ($3.1 million) in a seed round led by Five Seasons Ventures, bringing its total funding to £3 million. The capital will be used to hire new staff and accelerate growth.

BRITA SE acquires LARQ, expanding sustainable hydration products globally
German company BRITA SE has acquired LARQ, an innovative hydration brand based in the San Francisco Bay area. LARQ is known for its premium self-cleaning drinking bottles with UV-C purification, as well as its water jug and reusable drinkware products. The acquisition is seen as a strategic milestone for BRITA SE’s consumer business, particularly in North America. LARQ generates the majority of its business through direct-to-consumer sales and has experienced strong growth in global retail and corporate sales. LARQ will continue to operate as an independent legal entity under its own brand, with co-founder Justin Wang leading the company. Both BRITA SE and LARQ are committed to sustainability and providing an alternative to single-use plastic bottles. LARQ’s products combine innovative technology with inspirational design to offer sustainable hydration solutions. Additionally, every LARQ purchase contributes to expanding access to clean drinking water worldwide and reducing single-use plastic pollution.

Bia acquires Bulletproof, a keto-friendly nutrition brand
Food and beverage company bia has acquired Bulletproof, a keto-friendly functional nutrition brand, for an undisclosed amount. Bulletproof is known for its products that support a ketogenic diet, which focuses on high-fat, low-carbohydrate intake. The brand offers a range of products including coffee, protein bars, and supplements. The acquisition by bia will allow the company to expand its portfolio and cater to the growing demand for keto-friendly products. Bulletproof has a strong customer base and a reputation for high-quality products, making it an attractive addition to bia’s brand lineup.



Food & Beverage

Plant-based protein producer Heüra Foods closes Series B financing

Barcelona-based food tech start-up Heüra Foods Srl has cashed in €40m in a Series B financing round supported by Dutch Upfield Holdings BV, Unovis Asset Management (New York), the food tech funds of the European Circular Bioeconomy Fund (Bonn, Germany), and Belgian New Tree Impact. Heüra Foods develops plant-based meat alternatives that are aimed at sustainably changing the current food system and target the global protein transition. Its Mediterranean plant-based meat substitute portfolio consists of convenient food products made by high moisture extrusion from pea protein extracts, olive oil, a vegetable extract from beetroot, carrot, apple, as well as yeast extract, flavorings and methylcellulose, plus vitamin B12 and ascorbate as an antioxidant. In 2022, Heüra’s revenue raised by almost 80% to €31.4m, up from €17.7m one year before, as it ramped up distribution outside Spain. The latest cash injection is aimed at making the company profitable and strengthening its position in the plant-based food market, which is currently on the downturn due to high price, taste and texture problems compared to traditional meat and second generation cultivated protein products in the development pipeline.

Rind Snacks Acquires Small Batch Organics

6 year old sustainable snack brand RIND® Snacks announced its acquisition of Small Batch Organics, a Vermont-based manufacturer of award-winning granola products. The acquisition marks a major milestone in RIND’s evolution from a leading dried fruit brand into a vertically integrated healthy snack platform. Small Batch is a natural extension of RIND’s mission to bring wholesome and sustainable foods—that maximize nutrition and minimize waste–to more customers. The company’s product innovation and manufacturing expertise, combined with RIND’s strength in sales, distribution, and brand affinity, creates a dynamic snacking business that spans approximately 12,000 retail stores and is slated to generate over $25 million in retail sales by year’s end.

Highkey joins Creations: a boost for healthy snacks

Creations Foods, a US-based better-for-you snacks company, has acquired local peer Highkey for an undisclosed sum. Washington State-based Creations said the deal fits in with its strategy of building a portfolio of healthier snack brands which started with its acquisition of Moon Cheese in March last year. Creations, a gluten-free and plant-based snacks supplier, is owned by agri-food-focused Canadian private-equity firm Rio Investment Partners. It produces the Toatzy brand of cookies and also serves private-label clients. Florida-based Highkey has a portfolio of low-carb and low- or no-sugar snacks including cookies, wafers and bites. Creations remains in the market for further acquisitions. In its last deal, Creations bought the Moon Cheese snack brand from EnWave Corp., a Canada-based microwave vacuum drying technology specialist.



Grocery & Restaurants

Flynn Group explores sale of majority stake

Flynn Group, the franchise operator of restaurant brands from Applebee’s to Wendy’s as well as Planet Fitness gyms, is exploring the sale of a majority stake that could value it at more than $5 billion, sources told Reuters Thursday. The San Francisco-based Flynn Group, which was founded in 1999 with eight Applebee’s Neighborhood Grill & Bar franchises, is working with Bank of America, the sources told Reuters. Founded in 1999 by real estate investor Greg Flynn, the Flynn Group, the company website noted, operates more than 2,600 restaurants and fitness clubs in the United States and Australia, generating more than $4.5 billion in annual sales. The company added Wendy’s in Australia to its portfolio in 2023 after initiating a push into the country with Pizza Hut. Reuters on Thursday noted that sources said the Flynn Group generates more than $450 million in annual earnings before interest, taxes, depreciation and amortization. Investors in the Flynn Group, including Ontario Teachers’ Pension Plan (OTPP) and private-equity Main Post Partners, could sell part of their stakes and remain invested following a deal, sources told the news service. Flynn Group’s management, who are also significant shareholders, could do the same, the sources added.

Inspire Brands acquires delivery management software company Vromo

Dunkin’ and Buffalo Wild Wings parent company Inspire Brands has purchased delivery management software company, Vromo, for an undisclosed amount, a company spokesperson confirmed in an emailed statement. This is the first company acquisition Inspire Brands has made since its record-breaking purchase of Dunkin’ Brands Group for $11.3 billion (or $106.50 a share) in Dec. 2020. “Inspire Brands purchased Vromo, an online food delivery software designed to make delivery channels more profitable; Terms of the deal are not disclosed,” the Inspire Brands spokesperson said. Vromo was founded in 2016 as food delivery service provider WeBring, before being rebranded as Vromo, and expanding its tech capabilities outside of just delivery solutions to more all-encompassing custom tech solutions for delivery-focused restaurant operators, including features like delivery order management, order dispatch, tracking, and analytics.

Home & Road

SharkNinja Fiscal Year Gets Boost from Q4

At the end of the fiscal year, SharkNinja posted better earnings and revenue than expected.  Net income advanced to $49.3 million, or 35 cents per share, from $46.6 million, or 34 cents per share, in the prior-year period. Adjusted for one-time events, net income increased by $132.1 million, or 94 cents per diluted share, from $75.4 million, or 54 cents per share, in the year-earlier period.  A Yahoo Finance-published analyst consensus estimate called for adjusted earnings per share of 86 cents and revenues of $1.31 billion. Net sales advanced to $1.38 billion from $1.18 billion in the year-before period, while adjusted net sales increased to $1.38 billion from $1.15 billion on a constant currency basis, the company reported. The sales growth resulted primarily from gains in the Cooking and Beverage Appliances, Food Preparation Appliances and other SharkNinja segments, partially offset by a decrease in Cleaning Appliances.

Furniture sales slump continues into ‘24, but there’s one optimistic sign

Furniture and home furnishings sales in January were off the year-over-year pace according to the Department of Commerce’s advance monthly estimates, but the category was the month’s standout in one way. For the month, furniture store sales accounted for $11.070 billion in adjusted sales, down 9.8% compared with $12.279 billion in January 2023. Conversely, that number was 1.5% ahead of the adjusted $10.908 billion in sales in December, and also up vs. November’s $10.926 billion. That 1.5% change was the highest monthly increase among all categories. Overall, all measured retail and food services categories accounted for $700.291 billion in adjusted sales, up 0.6% compared with January 2023’s $695.776 billion, but down 0.8% against December’s $706.180 in adjusted sales. While furniture and home furnishings sales were down year-over-year, the category had company, as building material and garden equipment and supplies dealers were off the YOY pace by 8.3%, gas stations reported a 7.5% decline, and electronics and appliance stores were off last year’s pace by 5.8%.

Jewelry & Luxury

Tod’s Shares Soar Following News of Possible Delisting, Merger With L Catterton Affiliate

Tod’s shares continued to soar following the news that the Italian group was planning to go private through a deal with an L Catterton affiliate. By midafternoon Monday, Tod’s shares were up 18.15 percent at 42.96 euros on the Milan Stock Exchange and closed up 18.37 percent at 43.04 euros. On Sunday morning, the Italian luxury group – through chief executive officer Diego Della Valle, Andrea Della Valle, DI.VI. Finanziaria di Diego Della Valle & C. Srl and Diego Della Valle & C. Srl – disclosed it had entered an agreement with a newly incorporated Milan-based vehicle called Crown Bidco Srl. This is owned by LC10 International AIV LP, a private fund affiliated with L Catterton Management Ltd., backed by LVMH Moët Hennessy Louis Vuitton. As per the agreement, Crown Bidco will launch a voluntary tender offer aimed at acquiring 36 percent of Tod’s SpA, almost 13 million shares, at 43 euros per share, or about 512 million euros, in order to delist Tod’s from the Milan bourse. The agreement includes the possibility of a merger if the delisting were not achieved. In her Barclays report, Carole Madjo said it was likely the agreement was made “out of [Tod’s] need to further invest: Since the failed tender offer, Tod’s performance has been resilient, but we think the group probably still needs to make in-depth investment in the business, especially in the current environment, so the return of the news on delisting may not come as a particular surprise.” Madjo added that the announcement “was not surprising given Tod’s long-standing relationship with LVMH. LVMH holds 10 percent of the company through subsidiary Delphine SAS, while Tod’s had previously stated that LVMH would be their preferred group to sell to if they ever wished to do so.


U.S. Confirms Russian Diamond Sanctions Will Start March 1

On Thursday, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) confirmed that its new sanctions on Russian diamonds will begin March 1. The new rules will ban “diamonds that were mined, extracted, produced, or manufactured wholly or in part in the Russian Federation, notwithstanding whether such diamonds have been substantially transformed [i.e., cut and polished] outside of the Russian Federation,” according to a document signed by the OFAC deputy director, The March 1 ban will apply to polished diamonds that weigh one carat or more. On Sept. 1, the sanctions will expand to diamonds of at least half a carat.

De Beers’ Production Down 8% in 2023

Production fell 8 percent year-over-year in 2023 for De Beers Group as demand for rough diamonds dropped considerably and its one remaining mine in South Africa, Venetia, remains under construction. According to the company’s fourth-quarter and year-end production report published last week, it recovered a total of 31.9 million carats of diamonds in 2023, compared with 34.6 million in 2022. The nearly 32 million carats De Beers mined was in line with its guidance for the year, 30 million-33 million carats. The biggest drag on De Beers’ production continues to be Venetia, where production was down 64 percent to 2 million carats.

Trouble Ahead for Department Stores as Luxury Brands Move Direct-to-Consumer

As luxury brands increasingly find ways to create direct relationships with their customers, high-end department store chains are facing new challenges. Ralph Lauren, for its part, reported Thursday (Feb. 8) that it saw global direct-to-consumer (D2C) comparable store sales rise 9% in the third quarter of fiscal year 2024, gaining 1.7 million new D2C customers. “[D2C] now represents about two-thirds of the company,” President and CEO Patrice Louvet told analysts on an earnings call. “So, a majority of the business is [D2C] for Ralph Lauren. And the [D2C] channels are really where the world of Ralph Lauren comes to life most powerfully, where we engage most directly with the consumer and have the most ability to impact the consumer experience.” Also Thursday, Bloomberg reported that Chanel opened its first store in the United States selling jewelry and watches on New York City’s famed Fifth Avenue, marking an expansion of the brand’s D2C efforts. The brick-and-mortar move is especially key given the brand’s resistance to eCommerce channels.


Office & Leisure

Hasbro cuts half of its SKUs as sales fall 23% in Q4

Hasbro Inc.’s revenue fell 23% to about $1.29 billion during the fourth quarter, down from $1.68 billion a year ago. The company in a Tuesday earnings announcement posted a Q4 operating loss of $1.2 billion. For the full year, Hasbro’s revenue fell 15% to $5 billion from $5.9 billion a year earlier. The company saw an operating loss of $1.54 billion, including $1.3 billion of impairment charges related to divesting eOne, as well as nonrecurring inventory costs and royalty expenses. Hasbro’s full-year outlook anticipates revenue for its consumer products segment will be down 7% to 12%. The company also raised its cost-cutting target to $750 million from its previous goal of $350 million to $400 million by the end of 2025. Hasbro’s Q4 results stand in stark contrast to Mattel, which reported net sales of $1.6 billion for Q4, up 16% from $1.4 billion a year ago. Mattel’s full-year net sales were flat at $5.4 billion. “While we landed within our revenue guidance, we did not see the holiday season pickup that we were hoping for,” CFO Gina Goetter said on a Tuesday earnings call. However, CEO Chris Cocks said in a statement that Hasbro is starting the new year with a healthier balance sheet, a leaner cost structure and the ability to invest in the business.

Pet Supplies Plus, Wag N’ Wash tout 2023 franchise agreements, planned growth

As the pet industry continues to grow, Pet Supplies Plus and its Wag N’ Wash grooming chain are celebrating strong franchise agreement growth in 2023 while planning dozens of new openings this year. Looking ahead, Pet Supplies Plus told Chain Store Age that the company expects to open a combined total of more than 60 locations between the two banners in 2024. Citing data from Morgan Stanley showing that the pet industry could be valued at $275 billion by 2030, the company says it is positioning itself for strong future growth. “We expect 2024 to be another strong year as we remain laser focused on growing the footprint of Pet Supplies Plus while continuing to roll out Wag N’ Wash in new markets,” said Nick Russo, chief development and stores officer of Pet Supplies Plus Group. “Interest in the Pet Supplies Plus brand has never been stronger for both new and existing markets. Equally impressive, Wag N’ Wash has been a popular commodity, so we anticipate to sell a record number of stores this year.” Pet Supplies Plus ended the year awarding 83 franchise agreements and maintaining its robust store services growth. Wag N’ Wash secured 12 deals and has now doubled in store count since being acquired in early 2022. In addition to the new franchise agreement, Pet Supplies Plus opened 62 new stores last year, and Wag N’ Wash opened 13. Pet Supplies Plus, a subsidiary of Franchise Group, Inc., operates 720 locations in 42 states, while Wag N’ Wash operates 24 locations nationwide.

Why Radio Flyer just opened its first store…and put a race track in it

Walk into the Radio Flyer store, which opened in the Woodfield Mall outside Chicago in November, and it’s one of the first things you notice: parked on a bright green circle of astroturf is one of the brand’s signature red wagons, except this one is much bigger, with wheels the size of a sedan’s. “It’s like Honey, I Shrunk the Kids,” Robert Pasin, who instead of CEO, calls himself the Chief Wagon Officer of the company, told Retail Brew. It’s the first store for Radio Flyer, founded by Pasin’s grandfather, Antonio, in 1917. But it’s more than just a milestone. While widespread store closings in recent years gave rise to the term “retail apocalypse” even before Covid-19 made online shopping more ubiquitous, the store may help mark a store-design renaissance. Stores increasingly are creating elevated experiences where they make not just sales but also memories. Whatever you call it—retailtainment, experiential marketing, or brand storytelling—retailers are connecting with consumers more meaningfully than they can through phone screens.

Technology & Internet

TikTok, Facebook, YouTube sued by New York over youth health issues

New York City Mayor Eric Adams said Wednesday that his administration has filed a lawsuit against the parent companies of TikTok, Instagram, Facebook, Snapchat and YouTube, alleging that their services are damaging to the mental health of young adults and children in the largest U.S. city. The city of New York along with plaintiffs including the school district and health organizations filed the lawsuit in the Los Angeles county branch of the California Superior Court because of the companies’ ties to the area, attorneys wrote in the filing. The suit alleges that Meta, Snap, ByteDance and Google (whose parent company is Alphabet) knowingly “designed, developed, produced, operated, promoted, distributed, and marketed their platforms to attract, capture, and addict youth, with minimal parental oversight.” The plaintiffs allege that the tech companies violated several city laws related to public nuisance and gross negligence through the design and marketing of their addictive products. They claim that New York’s school districts and various health and social services have been severely impacted by children who have suffered negative mental health consequences stemming from their use of popular social media apps.


Shopify Shares Down After Company Issues Light Guidance

Shopify shares closed down 13.4% on Tuesday after the Canadian e-commerce company reported better-than-expected earnings for the fourth quarter but gave mixed guidance for the current period. Jeff Hoffmeister, Shopify’s CFO, attributed the strong results to more products being sold on its platform. Gross merchandise volume, or the total volume of merchandise sold on the platform, increased 23% to $75.1 billion — above the $72.1 billion expected by analysts, according to StreetAccount. Shopify’s light first-quarter guidance overshadowed the earnings and revenue beat. The company said it expects free cash flow margin to be in the high single digits, below Wall Street’s projected 13.6%. Shopify called for first-quarter revenue to grow at a “low-twenties percentage rate,” which it said would translate into a year-over-year growth rate in the mid- to high-20s when adjusting for the sale of its logistics business.


Finance & Economy

Retail sales decline more than expected in January

Retail sales slipped more than Wall Street expected in January, raising questions of whether America’s resilient consumer could be losing steam.  Retail sales fell 0.8% in January from the month prior according to Census Bureau data. Economists had expected a 0.2% decrease in spending, according to Bloomberg data. December retail sales previously posted a surprise 0.6% increase but that was revised down to 0.4%.  Nine of the 13 categories highlighted in the release saw decreases from a month ago. Building materials and garden equipment led the declines, dropping 4.1% while sales at miscellaneous store retailers fell 3%.  Meanwhile, sales at Furniture and home stores led the gainers, rising 1.5% from the month prior.

Mortgage demand tumbles as interest rates rise to highest level since December

A key measure of home-purchase applications slumped last week amid a sharp increase in mortgage rates.  The Mortgage Bankers Association’s (MBA) index of mortgage applications fell 2.3% for the week ended Feb. 9, compared with the previous week, according to new data.   The data also showed that the average rate on the popular 30-year loan rose to 6.87%. While that is down from a peak of 8% in October, it marks the highest level for interest rates since December 2023.  Housing demand has stalled out as rates move higher. Applications for a mortgage to purchase a home dropped 3% from the previous week. Application volume is down 12% compared with the same time last year.

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