- Colgate (CL) has undertaken restructuring that it now deems "structural." The arrival of this decision toward year-end tells me Colgate is looking to establish a new base from which to drive shareholder-friendly operating profits amid tepid global economies.Going further than that, it's a knock on the Federal Reserve's most recent efforts to juice employment and the economy, as folks are getting laid off and fear is zapping the spending tendencies of remaining workers. My view: The third quarter will start phase two of companies protecting their profits against their interpretation of a new normal. (This is the perception; I personally think gross domestic product can grow above 2%.)
- Build A Bear (BBW) is exiting more stores. That will leave open real estate, as retailers will be unlikely to initially lease it due to any "uncertainty" of choice, the push to mobile and all that these things entail.
- Cheesecake Factory (CAKE) is having its best sales late at night and in mid-afternoon. Somewhere in there lies a sad story about middle-income America.
- Deckers Outdoor (DECK) is running up against price resistance in the Ugg category -- new to the company. If the economy were outputting 3% and surprising to the upside, I don't think this would have occurred to such an extent. By the way, yes, I continue to be negative on the stock.
Off the Chain
- First thought on Apple earnings: Everyone in the name should be prepared for this being an operating-margin story.
- First thought on Amazon earnings: We saw the exact same market response to an earnings miss in the previous quarter from a company that needs to work on its disclosure practices.
- Under Armour (UL): I'd said the stock was overvalued and not to buy into earnings. Inventory has now been worked down significantly (it was eye-popping) and we're seeing new product penetration and marketing investments. As a result, I now have interest.