Good morning everyone,
Today we’re checking in on the retail apocalypse and revisiting Brexit. Remember that sh*tshow? Oh and here’s your weekly reminder that Steve Cohen is much, much more wealthy than you.
Enjoy the next 4 minutes and 19 seconds.
Jeff & Jason
Drop ’til you shop
“Retailers are in trouble.”- Captain Obvious
Kohl’s, J.C. Penney, and Nordstrom all left a great deal to be desired after dropping first quarter financials yesterday. Whether it was wet weather (Kohl’s), poor execution (Nordstrom), or simply existing in J.C. Penney’s case, all of the department stores offered excuses for underperforming. Not one of which was just admitting that brick and mortar retail as we know it is dead.
Of course, rather than pointing to a systemic and potentially fatal flaw retail brass turned to a convenient scapegoat: trade wars! All three CEOs cited higher tariffs as a reason for downgrading their respective earnings forecasts for the remainder of the year.
Arguably the most heartbreaking announcement of the day (if your name is Shelly and you always ask for the manager when you get poor service at Chili’s) belongs to Dress Barn, after its parent company Ascena Retail Group announced that it will be closing all 650 retail stores in an effort to “stabilize” the business. Apparently, ceasing to exist is synonymous with stabilization.
Starting to build
It’s not all doom and gloom in the retail world though. Home Depot actually reported a beat on both sales and profit during the first quarter despite that early rain season. It checks out: if dads aren’t outside working on projects, they are at Home Depot planning for them/talking to their “buddy Hal from lighting.”
Bottom line: “Remember payphones?! Yeah, me neither. We’ll be saying the same thing about department stores in 10 years.” – Jason
Theresa May seems like the kinda person who did all of the work on group projects in college … but didn’t snitch on the slackers. May, always a glutton for punishment, put it all (whatever is left) on the line again yesterday.
And almost immediately MPs ripped her still beating heart out of her chest a la ‘Indiana Jones’ and stomped on it for the world to see. During a hastily made pitch to Parliament May proposed a new referendum on Brexit that could allow the country to vote again on if it wanted to stay or go. But it came with a caveat: Parliament must accept May’s original exit strategy should the country decide to GTFO again.
Although the fish and chip loving chaps won’t vote until next month, the deal is as good as dead. Before May even left the podium, MPs were taking to social media to voice their disgust.
Where did we go wrong?
You might remember that the British people voted to exit the EU almost three years ago. The UK’s deadline to leave has come and gone as has Theresa May’s will to love. The EU reluctantly granted an extension, presumably because “this is pretty f*cking entertaining.”
After posting more L’s than the 2017 Cleveland Browns (ok, so May’s Brexit proposals were only denied 3 times), May vowed to abdicate her post following a Brexit decision.
It’s literally anybody’s guess. There’s the no-deal Brexit option, an agreement could get inked by a new British Prime Minister … or, of course, the UK may end up remaining part of the EU.
Bottom line: “Theresa May is the political equivalent of the Washington Generals.” – Jeff
The Butterfly Effect
After four years filled with sticky keys, double letters, and a class action lawsuit, MacBook fanboys can rest easy knowing that Apple has finally decided to change the material used to create its infamous butterfly keyboard.
Apple claims that the change should help with the double key-press issue that users have experienced on their overpriced adult entertainment machines. The newest MacBook Pros which shipped out for the first time yesterday will be equipped with said “new material.” The company didn’t specify what exactly the new material was, but it also didn’t’ say it wasn’t manufactured by Huawei.
But wait, there’s more
Tim Cook and the gang are expanding Apple’s repair program. What originally only pertained to first and second generation keyboards has been expanded to the third generation model that was introduced last year in the MacBook Air and MacBook Pro models.
Coverage is available up to four years after the original purchase date and repair time should be shortened as well. The Genius Bar is about to be anarchy. Apple, however, did not say whether it would continue to use the butterfly keyboard in future models.
This all comes as a welcome surprise to AAPL investors who just kinda assumed Steve Job’s brainchild gave up on hardware altogether.
Bottom line: “Can we discuss the real problem here? Sweatshop workers not taking their share of the blame for shoddy workmanship. Kids these days.” – Jason
IN OTHER NEWS
- Shots fired.China is taking shots at Apple in defense of Huawei, which has been identified as a security risk by the Trump administration. Deputy chief of mission at the Chinese embassy in Islamabad, Zhao Lijian, tweeted a photo of a carved up Apple, implying it was Huawei’s doing, and indicated that Apple’s undoing was the reason for the United States’ crackdown on the firm. It’s not the first time he’s taken to Twitter to joke about issues with major global ramifications, and with the looming trade war, it likely won’t be the last time either.
- The USPS is testing self-driving trucks on the mail run between Phoenix and Dallas using rigs built by TuSimple. For this route, a 22-hour drive, the Postal Service currently uses outside trucking companies requiring two driver teams due to the length of the trip, which is where the autonomy comes into play. Don’t worry, they’ll have safety drivers riding along in case sh*t hits the fan.
- Pharma companies looking to modernize their clinical trials will soon be able to turn to Alphabet’s Verily. The company announced that it will be working through strategic partnerships with Novartis, Sanofi, Otsuka, and Pfizer to help speed up the clinical trial portion of drug testing and get new drugs to market faster. The firm will make it easier for participants to enroll in clinical trials, while aggregating data from electronic medical records and health-tracking wearables before relaying that data back to the pharma firms.
- ByteDance, the company behind recent GenZ sensation TikTok, is working its way into the paid music streaming space in emerging markets. A new app, that could be revealed as soon as this fall, is set to launch in countries where incumbents like Spotify and Apple have struggled to take hold. As long as they keep posting those hilarious post-divorce videos, they can do whatever they damn well please. ByteDance is currently valued at more than $75B.