Headlines of the Week

Shoemaker Allbirds reportedly in talks with banks for IPO as public market heats up

The trendy shoe brand Allbirds is interviewing banks in preparation for an initial public offering, according to The New York Times DealBook. The direct-to-consumer company was last valued at roughly $1.7 billion. It isn’t clear when Allbirds plans to go public, but an IPO would launch it into an already-hot market, fueled by a recent slew of tech IPOs. Consumer-facing brands such as Jessica Alba’s Honest Company are now readying a debut. During the health crisis, Allbirds has seen growing momentum for its products — including its iconic slip-on sneaker made out of wool and other sustainable materials. The brand started with a cult-like following in Silicon Valley that quickly spread to global recognition. It has 23 stores today, according to its website, including in London, Berlin, Shanghai and Tokyo.

 

Blackstone Is Buying eOne Music from Hasbro in $385mn Cash Deal

Financial giant Blackstone is about to acquire a big bundle of music rights.  Hasbro has confirmed it has entered into a definitive agreement to sell Entertainment One Music (eOne Music) to entities controlled by Blackstone for USD $385 million in cash.  The transaction is expected to close in the second or third quarter of 2021. The deal will add to a portfolio of music companies under Blackstone that also include music rights org SESAC. MusicBusiness Worldwide has long predicted that Hasbro would end up offloading eOne Music, after Hasbro acquired the operation as part of a $4bn buyout of Entertainment One in August 2019.  Assets owned by eOne Music include the Death Row Records catalog and Dualtone Music Group, in addition to production music house Audio Network, which eOne acquired for approximately $215m in April 2019.

 

 

Apparel & Footwear

Sequential Brands Group Announces Sale of Heelys Brand

Sequential Brands Group, Inc. announced that it has closed on the sale of its Heelys brand to BBC International for $11 million in cash proceeds. “The divestiture of the Heelys brand was an outcome of the Board’s exploration of strategic alternatives, a process that is still underway,” said William Sweedler, Executive Chairman of Sequential. “The Heelys brand was originally acquired in 2013 for a net purchase price of approximately $5.5 million (after accounting for cash on the Heelys balance sheet that we received at the time of the 2013 purchase). BBC International has been the core licensee of Heelys since 2013. We believe the brand is in great hands under BBC’s leadership going forward.”  The majority of the net proceeds from the sale will be used to pay down debt.

Justice opens up shop again — online

Justice is back in business.  The tween apparel brand last week launched a new website, Shopjustice.com, that features an assortment of apparel and accessory products for young girls. In November, Bluestar Alliance acquired the intellectual property of Justice for $90 million at an auction conducted by the brand’s bankrupt parent, Ascena Retail Group. Ascena had previously closed about 600 of Justice’s 820 stores, with the remaining locations shuttered early this year. Bluestar is a brand management and marketing company whose brand portfolio includes Hurley, Bebe, Tahari, Brookstone, Limited Too and others. The company’s retail footprint includes more than 250 stores, shop-in-shops and distributors in North America and around the globe. In a release, Bluestar said it plans to expand the Justice brand into new product categories, including “unexpected” accessories, tech, home and more.

Crocs shares soar as shoe maker raises 2021 sales outlook, sees growth of 40% to 50%

Crocs shares shot up more than 8% Tuesday after the shoe maker increased its revenue outlook for the full year and reported record first-quarter sales. CEO Andrew Rees said demand for the Crocs brand is “stronger than ever” across the world. Some have called Crocs the “it” shoe of the pandemic, as the clog became a closet staple for consumers seeking comfort at home. But it had seen momentum growing even prior, thanks to popular collaborations and limited-edition drops with celebrities including Justin Bieber, Post Malone and Priyanka Chopra. For the year, it now expects sales to be up between 40% and 50%. In February, it had been guiding for revenue growth of 20% to 25%. Analysts had been calling for a 25% increase. While Crocs said it’s seeing strong and continued momentum in the Americas, it sees the biggest long-term growth opportunity in Asia, which it says is the second-largest footwear market in the world. Over the past 12 months, Crocs shares have rallied more than 260%. It has a market cap of $5.5 billion.

VF Corp strikes deal to sell 9 workwear labels

Tweaking its portfolio once again, VF Corp. on Wednesday said it has a definitive agreement to sell some of its work apparel brands to a subsidiary of holding company Redwood Capital Investments, for an unspecified amount. The transaction is expected to close in the first quarter of fiscal 2022, subject to customary closing conditions and regulatory approvals. Terms of the agreement were not disclosed. The brands represent the occupational workwear portion of VF’s work segment and include Red Kap, VF Solutions, Bulwark, Workrite, Walls, Terra, Kodiak, Work Authority and Horace Small. The sale doesn’t include Dickies or Timberland PRO. Changing up its stable of brands has become a habit at VF. The company made a splash when it acquired cult brand Supreme in November for $2.1 billion — a feat that has stayed a bit under the radar thanks to the ongoing turmoil from the pandemic.

Port Delays Aren’t Over for Steve Madden, but Company Could Still ‘Catapult’ Above 2019 Levels, Analysts Say

Analysts have remained neutral or reiterated their buy ratings for Steven Madden Ltd. — despite macroeconomic headwinds such as pandemic-induced port congestions and store closures that continue to hurt its business. The New York-based company, which reported better-than-expected earnings and sales, has seen a “pretty significant impact” on its supply chain, chairman and CEO Ed Rosenfeld said in its first-quarter conference call. It also issued caution for the second quarter. “One of the things that’s frustrating for us is just, because we do have such a strong product assortment and consumer is responding so well to so many of our products, we’re not really able to capitalize on that in the way we otherwise would if we didn’t have the supply chain disruption,” said Rosenfeld, who projected a $15 million to $20 million revenue hit in the second quarter as a result of macro uncertainties. However, market watchers predicted that this top-line performance could prove conservative, given the momentum from fiscal stimulus and pent-up demand. Plus, Rosenfeld forecasted at the end of the chain’s 2020 fiscal year that disruption at the docks could contribute to a $30 million revenue impact in Q1, but he noted that “it was not as bad as we initially feared … I would say it actually ended up being only about half of that.”

 

Athletic & Sporting Goods

Echelon Fitness Scores Another Round of Funding

Echelon Fitness announced another successful round of funding in the first quarter. Newly raised capital will help to forge new deals, bring in new content and talent for the Echelon community and continue to bring to market innovative products across multiple retailers. New investors include Goldman Sachs Growth, North Castle Partners, and United Talent Agency (UTA).  Echelon Fitness has taken on the challenge of meeting the marketplace demand—offering a range of connected equipment at different price points, available at reputable big-box retailers and Echelon online—to suit a broad range of at-home fitness enthusiasts.

Overtime Sports Startup Raises Fresh Funds From Jeff Bezos, Drake, Dozens Of NBA Players

Brooklyn-based sports startup Overtime has raised $80 million in Series C funding from investors including Bezos Expeditions (the personal investment company of Jeff Bezos), Drake and more than 25 current and former NBA stars including Trae Young, Devin Booker, Klay Thompson and Pau Gasol.  In total, Overtime, which was founded in 2016, has now raised more than $140 million in funding.  It also has 50 million social media followers and crosses verticals from content to e-commerce, its sports app, and live events. It said the fresh funds will go in part to develop new basketball league OTE (Overtime Elite), guaranteeing salaries for athletes and hiring a staff of 80 league employees to launch an inaugural season in September.

Cosmetics & Pharmacy

Nestlé in talks to buy Bountiful Company

Nestlé is in talks to buy the company behind Nature’s Bounty vitamins and minerals in what would be the Swiss food group’s latest multibillion-dollar deal to reshape its portfolio. The group behind KitKat chocolate bars and Nescafé coffee said last week it was in discussions to acquire The Bountiful Company, which is backed by private equity group KKR and has been making preparations for a flotation. “Nestlé SA today announced that it is in discussions to acquire all or part of The Bountiful Company,” the company said in a one-line statement, confirming a Wall Street Journal report last week. KKR had been planning to value Bountiful at more than $6bn in an initial public offering, Bloomberg News reported in January. Nestlé has been selling off less profitable parts of its portfolio and pushing into health and nutrition under chief executive Mark Schneider. Its disposals included a deal struck this year to sell several US and Canadian bottled water brands for $4.3bn to private equity companies One Rock Capital Partners and Metropoulos. Nestlé, alongside consumer goods rivals such as Reckitt Benckiser, has at the same time been adding to its interests in healthcare.

Jessica Alba’s Honest Co. targets $1.5 billion valuation in IPO

Jessica Alba’s Honest Co. said last week it was aiming for a valuation of over $1.5 billion in its initial public offering in the United States. Alba, known for her roles in film “Fantastic Four” and TV series “Dark Angel”, in 2011 co-founded Honest, which touts its baby products as a safer alternative to those that use synthetic chemicals. But it came under the scanner in 2016, when a lawsuit said its products contained a harsh chemical it had pledged to avoid. Honest then reached a $7.35 million settlement for wrongly labeling ingredients in some products as natural, plant-based or chemical-free. The company, which also sells an array of consumer goods including sunscreen lotions, sanitizers and detergents, is planning to strengthen its online business and bolster its presence in international markets, including the lucrative Asian region. The Los Angeles-based company, looking to list its shares on the Nasdaq under the symbol “HNST”, said in its filing it was offering around 25.8 million shares between $14 and $17 each. Honest would receive around $110 million at the upper end of the range, excluding proceeds from shares offered by stockholders.

Unilever To Acquire Onnit

Unilever announced that it has signed an agreement to acquire Onnit, a maker of wellness supplements based in Austin, TX. Onnit was founded in 2010 by Aubrey Marcus and its supplements support improved cognitive function, mood and relaxation, gut health, and immunity support. The brand also offers functional nutrition, fitness essentials, and a digital content platform. Peter ter Kulve, president of Home Care and Health & Wellbeing at Unilever, said: “Onnit is a leading brand in the fast-growing nootropics segment. With its holistic health offering and digital-first model, Onnit perfectly complements our growing portfolio of innovative wellness and supplement brands that include OLLY, Equilibra, Liquid I.V., and SmartyPants Vitamins.” Fabian Garcia, president of Unilever North America, said: “We are thrilled to welcome Onnit to the Unilever family. As a dynamic and purpose-led brand, Unilever is strongly aligned with Onnit’s vision to improve the health and wellness of consumers with scientifically proven solutions.” The terms of the deal were not disclosed. The acquisition is subject to regulatory approvals and customary closing conditions.

 

Discounters & Department Stores

The husk of Sears Holdings is still in bankruptcy — and $81M in the hole

The corporate husk of the old Sears is still trying, and struggling, to pay its bills in Chapter 11, more than two years after Eddie Lampert acquired the remaining Sears and Kmart stores from the company he used to run. According to a court presentation by Sears Holdings, the company only has $18.3 million in cash as of April 10 to pay more than $97 million in remaining administrative claims and taxes, along with millions of dollars in other liabilities. All told, Sears Holdings is short $80.8 million on its obligations, which includes professional fees, vendor payments and other claims.

Sephora at Kohl’s to host blockbuster lineup of over 125 beauty brands

A few months after Sephora and Kohl’s announced plans to open Sephora shop-in-shops, the two are providing more details on the assortment offered. The Sephora at Kohl’s experience will include more than 125 prestige beauty brands in August, initially available in 200 Kohl’s stores and online. The brands span categories including makeup, skincare, hair and fragrance, with 75% of the assortment exclusive to Sephora U.S. and Sephora at Kohl’s, according to a company press release. The superstar lineup includes Drybar, The Ordinary, Drunk Elephant, Fenty Beauty, Tatcha, Milk Makeup, Tarte, Too Faced and Anastasia Beverly Hills, among many others. Sephora at Kohl’s is set to expand to 850 locations by 2023, with a target of opening 400 in 2022.

S&P turns positive on Macy’s as apparel, economy gain steam

S&P Global Ratings raised its outlook for Macy’s from negative to positive, signaling that the retailer could get an upgrade from its current B+ credit rating in the coming months. Explaining the reasons behind the outlook change, S&P analysts Helena Song and Sarah Wyeth said in a release, “Encouraging signs of an accelerating economic recovery are emerging, and we believe operating conditions for apparel retailers are fast improving.” The analysts also cited lower-than-expected profit and sales declines at Macy’s in the fourth quarter as well as momentum going into Q1.

 

 

Emerging Consumer Companies

Willow, wearable breast pump company, raises $26.8 million

Willow, the Mountain View-based wearable breast pump company, announced that it has raised $26.8 million in extended Series C funding. The extension round was led by Endeavour Vision and included New Enterprise Associates, Pura Vida Investments, Purple Arch Ventures, Logos Capital and Gaingels, and brings the total Series C investment to $81.8 million. The company said it will use the latest funding to invest in new products and further expand distribution. Launched in 2014 as a direct-to-consumer brand, Willow innovated proprietary, patented wearable self-contained breast pump technology that offers mobility for pumping moms.

 

Vivrelle, membership club for handbags and jewelry, raises $26 million

Vivrelle, a New York-based jewelry and handbag membership club, announced that it raised $26 million in Series A funding. Origin Ventures led the funding round with participation from Chapford Capital Group. The investment will help the company grow its membership, expand its product offering, launch new marketing initiatives and partnerships and scale its services.

 

Ergatta, gamified at-home fitness brand, raises $30 million

Ergatta, a New York-based at-home fitness brand, announced that it has raised $30 million. The round was led by Advance Venture Partners with participation from Greycroft, Fifth Wall, and Gaingels, and brings the company’s total funding up to $35 million, including a $5 million seed round raised in July of last year. Ergatta says the funding will go toward developing new content, competition and social features for its platform. The company’s primary hardware today is a rowing machine built out of cherry wood.

 

 

Grocery & Restaurants

Chicken sandwich wars pay off for KFC and McDonald’s, putting pressure on supply

KFC’s and McDonald’s belated entries into the chicken sandwich wars look to be paying off for the two fast-food chains. Yum Brands executives told analysts on Wednesday that KFC is selling more than twice the volume of its new chicken sandwich compared with past versions. Yum CEO David Gibbs said that initial indications show that customers are returning to KFC restaurants more frequently to buy the sandwich, which became available nationwide at the end of February. Likewise, McDonald’s Crispy Chicken Sandwich, which launched in late February as well, is also winning over customers. McDonald’s franchisees are selling an average of 262 chicken sandwiches per day, according to Kalinowski Equity Research’s quarterly survey of operators. That’s below Popeyes’ estimated daily sales of 1,000 sandwiches per location in the early days of its blockbuster launch, but a third of survey respondents said that the McDonald’s sandwich is selling better than their expectations. But the success of McDonald’s Crispy Chicken Sandwich may be contributing to the tight chicken supply mentioned by Gibbs. McDonald’s holds a 30% market share in the fast-food sector, and it has a track record of influencing commodity prices. The chicken supply is a growing problem for the rest of the industry as more restaurant chains add chicken sandwiches to their menus.

 

Starbucks U.S. sales have fully recovered since the beginning of the pandemic

Starbucks claims that its U.S. sales have now fully recovered from the economic effects of the pandemic, reporting positive same-store sales growth of 9% for the second quarter ended March 28. It’s the first time Starbucks’ U.S. sales have trended positively since the pandemic began and represents a significant improvement over -5% same-store sales decline in the first quarter. The turnaround for Starbucks’ U.S. division was driven by a 21% increase in average ticket for U.S. sales, partially offset by traffic challenges. Overseas, international same-store sales increased significantly by 35%, driven by traffic and ticket growth. Starbucks’ second-largest market, China, meanwhile saw an explosive 91% same-store sales growth last quarter driven again by traffic growth.

 

Cava Group secures $190M funding for expansion

Cava Group this week said it has received $190 million in a Series F funding round, which the company plans to use to finance the ongoing conversion of Zoe’s Kitchen locations to Cava and to expand Cava into new markets, among other uses. As previously reported, Cava has been converting Zoe’s, which the fast-casual Mediterranean operator acquired in 2018, to the Cava brand in suburban communities. Cava said in announcing the new round of investment that it will “double down” on expanding its concept in suburban communities. It said it plans to convert more than 50 Zoe’s Kitchen restaurants to the Cava format in 2021 and enter several new markets, including 14 new locations in Atlanta. The funding will also fuel the expansion of the company’s consumer packaged goods (CPG) business, which Cava sees as a key growth opportunity. The company also said it planned to use the funds to invest in its vertically integrated production model for its packaged dips and spreads, which are offered nationally in Whole Foods stores. This will allow for “uncapped expansion and tandem growth of both the CPG line and the restaurant business,” Cava said in a statement.

 

Conor McGregor sells majority of whiskey brand Proper No. Twelve to Proximo Spirits for $600M

Conor McGregor is no longer the majority owner of the whiskey brand he founded, but the UFC star has added to his growing fortune. Proximo Spirits, the company that owns Jose Cuervo and other alcohol brands, has acquired a majority stake in Proper No. Twelve Irish whiskey in a deal worth up to $600 million, both sides told spirits trade publication Shanken News Daily on Tuesday. Proximo previously held a 49% stake in the company. Proper No. Twelve was founded in 2018 and has been promoted vigorously by McGregor, the most popular star in UFC history. Proximo’s new stake in the brand was not disclosed, nor was the length of the agreement. Mike Keyes, Proximo’s CEO, told Shanken News Daily that McGregor, Attar and Austin will retain an interest in the brand and maintain active roles.

Home & Road

At Home opens its first New York City store

At Home Group has entered a big new market. The value home décor retailer has opened its first-ever store in New York City, in the borough of Queens, in Rego Park, along with a location in Clarksville, Ind. The two new stores bring At Home’s total store count to 226. “We are thrilled to continue toward our long-term potential of operating 600-plus stores in the U.S.,” At Home chairman and CEO Lee Bird stated in March. “Our business has never been stronger and there is enormous growth potential for At Home.” At Home stores average about 100,000 sq. ft. and sell more than 50,000 home décor, from furniture, rugs, wall art and housewares to tabletop, patio and holiday décor.

 

Helen Of Troy’s Housewares Q4 Revenues Climb 12 Percent

Helen of Troy Ltd. reported sales in its Housewares segment, which includes Hydro Flask and OXO, increased 12.1 percent in its fiscal fourth quarter ended February 28. Sales reached $162.5 million compared to $144.9 million a year ago. The increase was driven by an Organic business increase of $17.1 million, or 11.8 percent, primarily due to higher demand for OXO brand products as COVID-19 continued to keep consumers at home cooking, baking and organizing, which resulted in increases in online, brick & mortar, and international sales. These factors were partially offset by an adverse impact from Winter Storm Uri, the COVID-19 related impact of reduced store traffic at certain retail brick & mortar stores, increased competitive activity and strong new product releases in the prior-year period. Operating income in the Housewares segment increased 16.0 percent to $16.2 million, or 10.0 percent of segment net sales revenue, compared to $14.0 million, or 9.6 percent of segment net sales revenue.

Flexsteel fiscal Q3 revenue up 19.8%

Strong sales through both brick-and-mortar and e-commerce channels boosted full-line vendor Flexsteel Inds.’s fiscal third-quarter net sales to $118.4 million, an increase of 19.8% compared with the same prior-year period. During the three months ended March 31, home furnishings products sold through retail stores were up $26.5 million, or 34.4%, vs. fiscal 2020’s third quarter, while sales of Homestyles goods through e-commerce channels increased by $2.8 million, or 23.4%. The increases in retail and e-commerce channels were partially offset by a decline of $9.7 million vs. the prior year quarter, due to Flexsteel’s exit of the Vehicle Seating and Hospitality product lines during fiscal 2020’s fourth quarter. Third-quarter organic net sales, which exclude those discontinued lines, increased by 32.9%. Flexsteel netted fiscal third-quarter net income of $4.9 million or 67 cents per diluted share, compared compared with net loss of $5.3 million or (66 cents) per diluted share in the prior-year period.

 

Sherwin-Williams Q1 sales, income gives ‘strong start’ to 2021

With consolidated net sales up to $4.66 billion, and net income up to $409.6 million, Sherwin-Williams’ first quarter (ended March 31) is showing a “strong start” for the year, according to Chairman, President and CEO John G. Morikis. “Our sales growth was driven by strong architectural paint demand, improving demand in the industrial end markets served and pricing actions to offset raw material cost increases,” Morikis said in the earnings report. He also noted that the company’s net operating cash increased 256% to $195.7 million, allowing the company to “invest in long-term strategic growth initiatives, repurchase 3.3 million shares in the first quarter and open 12 new stores in the U.S. and Canada.”

Jewelry & Luxury

Tiffany Introduces Male Engagement Rings

This spring, Tiffany & Co. will debut the Charles Tiffany Setting, its first-ever collection of engagement rings for men. In a statement, the retailer said that the new line, named for founder Charles Lewis Tiffany, represents a “modern and bold departure” from the traditional wedding band. The line also doesn’t much resemble the standard Tiffany-set female-oriented engagement ring. “Recalling a signet silhouette, the platinum and titanium designs revise a classic men’s style with powerful contours, a contemporary profile, and feature a striking center diamond,” the company said in the same statement.

LVMH launches luxury deadstock resale site—making good on the fashion industry’s past mistakes

Luxury goods conglomerate LVMH is launching an online market platform to sell off its deadstock high-end fabrics instead of letting them pile up in warehouses, or worse, having them destroyed. The new online marketplace called Nona Source will re-sell fabrics and leathers that were once carefully selected by designers working at one of the many fashion houses owned under the LVMH brand. The fabrics could come from any of the LVMH-owned brands, including Louis Vuitton, Christian Dior, Fendi, Givenchy, Celine, Loewe, and Marc Jacobs. All materials on sale will be certified LVMH Maisons’ deadstock and will be sold at around 70% of the original wholesale price.

Consumers Feeling Better About Economy—And Jewelry

U.S. consumers are optimistic about the economy and wouldn’t mind splurging on jewelry, according to a new survey by NielsenIQ conducted by Platinum Guild International. The survey found the following: While one-third of Americans feel positive about the current economy, more than half expect it to get better in the next three months. About one-half of respondents are optimistic about their current and future personal financial situations. Non-bridal jewelry has been driving the market demand, with more than half of participants looking to purchase non-bridal pieces within the next year. That non-bridal demand has been led by female self-purchase, with the heaviest self-purchasers aged 18–45. When the self-purchasers were asked why they bought a piece for themselves, the number one answer given was “just because.”

 

Office & Leisure

Camping World applying Airbnb model to RV rentals

A leading retailer of recreational vehicles (RVs) and outdoor recreation equipment plans to digitally connect RV owners and renters. Camping World Holdings Inc. is launching a peer-to-peer digital rental marketplace in May 2021. Marketed as Camping World RV Rentals, the platform will seamlessly connect owners and renters. According to Camping World, its goal is to maximize the owner’s ROI while allowing the renter to pay less money to have access to an RV. The platform will include both towable and motorized RVs. Camping World RV Rentals opens for listings of RVs beginning May 14, 2021, and will allow customers to browse RVs and register for alerts when bookings become available. By early July 2021, bookings will open to customers as the rental marketplace enters a soft launch phase before a full nationwide launch in fall 2021.

Roblox Queen MeganPlays Is Making Millions With a Blocky Digital Empire

In 2018, Megan Letter (then known by her maiden name, Leeds) was making about $400 a month posting videos of herself playing the life simulation game The Sims on YouTube. It wasn’t enough to support herself, and she was thinking of getting an internship as a wedding florist. Then she switched her focus to Roblox, the platform for user-created games that’s recently become a sensation with the preteen set. “I immediately saw a turnaround,” says Letter, who began earning thousands of dollars monthly within a few months. “I could actually pay bills.” Letter is known by her online moniker, MeganPlays, the pink-purple-haired bubbly personality she takes on while playing role-playing games inside Roblox. She now earns millions of dollars annually from posting YouTube videos for her 3.6 million subscribers. Last year, Letter and her husband, Zach, began publishing their own Roblox games, including the well-received Overlook Bay, and they say their studio is on pace to pull in more than $8 million in 2021.

Hasbro toys to get more expensive as costs surge

Hasbro Inc said on Tuesday it would raise prices of toys and games to counter higher raw material costs as the company sees surging demand for its Nerf blasters and board games from families spending more time at home. Shares of the Monopoly maker, which late on Monday announced the sale of Entertainment One Music to Blackstone Group Inc for $385 million, rose 1% in morning trading. The toymaker, like most U.S. manufacturers, has had to contend with rising resin, packaging and metal prices, as well as soaring transportation costs due to high demand and supply disruptions caused by the COVID-19 pandemic.  Rival Mattel Inc (MAT.O) last week had flagged expectations for a “significant impact” to margins from higher resin prices and ocean freight charges.

This Household Staple Is Disappearing From Shelves

If you’re one of the many who adopted a four-legged friend during the pandemic, take note: there is currently a pet food shortage across the U.S. According to comments made during Global Pet Expo Digital Access 2021 by Steve King, president and CEO of the American Pet Products Association, the pandemic has led to pet food and pet product supply issues and transportation issues. King noted that a 9.7 percent increase in pet food sales between 2019 and 2020 had put a strain on supply chains that are already struggling with a shortage of raw materials needed to make the products. Worker safety protocols at production facilities and labor shortages are also playing a factor in the supply chain hiccup.  If your cat or dog has particular tastes, the current shortage might be especially challenging. Canned wet pet food is in particularly short supply thanks to a surge in demand and existing production limitations, Sumit Singh, CEO of online pet supply company Chewy, says.  The current pet food shortage could last into 2022.

Technology & Internet

Amazon’s Sales Surge 44% As It Smashes Earnings Expectations

Amazon shares climbed more than 3% in extended trading Thursday after the company released its first-quarter earnings, beating Wall Street’s expectations for earnings and revenue. Few companies have benefited from the pandemic-fueled surge of online shopping as much as Amazon. Its first-quarter results showed the company’s business continues to be buoyed by the pandemic, with sales soaring 44% year over year to $108.5 billion. Amazon’s guidance for the second quarter implies that it expects the momentum to continue, which should help allay investor fears that business could slow in a post-pandemic environment. Crucially, Amazon confirmed in its guidance that this year’s Prime Day will take place in June, which will likely help year-over-year comparisons for revenue in the second quarter. Typically, Amazon’s annual, two-day discount bonanza takes place in July, but the company postponed the event to October last year amid pandemic-related uncertainty.

 

Shopify surges after e-commerce boom fuels big earnings beat

Shares of Shopify jumped as much as 11.4% on Wednesday after the Canadian company, which makes tools for companies to sell products online, reported first-quarter results that crushed analysts’ expectations. For the first quarter, Shopify posted revenue of $988.6 million, which was up a whopping 110% compared with a year prior and trounced consensus estimates of $862.7 million. Shopify became one of the biggest winners of the pandemic-fueled shift to e-commerce, as many brick-and-mortar stores temporarily shuttered and people opted to stay indoors to slow the spread of the coronavirus. Investors are now hoping Shopify will continue to attract more businesses that are looking to build a digital presence, even after the economy continues to reopen and consumers head back to physical stores. Shopify cautioned that it expects revenue to keep growing in 2021 but at a slower rate than what it experienced last year.

 

Finance & Economy

Majority of Americans say US economic conditions are good for the first time during the pandemic

For the first time during the pandemic, most Americans approve of the economic conditions in the United States, according to a CNN poll conducted by SSRS.  With jobless claims sinking and GDP growth expected to accelerate, a majority of Americans — 54% — say economic conditions are either somewhat or very good, the poll found.  That marks the first time since the first week of March 2020, just before the World Health Organization declared the coronavirus outbreak a pandemic, that most Americans in CNN polling said economic conditions were good.  The milestone provides yet more evidence that the economic rebound from the pandemic is gaining steam.

Fed holds rates near zero, notes rising inflation as US economy ‘strengthened’

The Federal Reserve said the vaccine rollout has improved the U.S. economy, but still held interest rates at near-zero as part of its commitment to aggressive economic stimulus.  “Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened,” the policy-setting Federal Open Market Committee (FOMC) said in an updated statement.  The Fed said inflation has “risen” but attributed the higher readings to “transitory factors.” Central bank officials have warned that higher inflation could be coming as a result of the “base effects” of measuring year-over-year changes in addition to some supply chain constraints.  The central bank said it remains optimistic about the rebound in U.S. economic activity, describing the most adversely affected industries as having “shown improvement.”