Filed under: Good news, Industry, Best Buy (BBY)

Retail websites are becoming just as important as brick-and-mortar presences for most retailers, and this is never more apparent than during the retail holiday season. For those customers who don’t wish to beat each other up while standing in 6am Black Friday lines, sitting at home ordering holiday presents over the web is the preferred shopping method.

I’ve written many times in the recent past about how consumer electronics retailer Best Buy, Inc. (NYSE: BBY) gets more things right than wrong. The company’s merchandise presentation, helpful employees and overall shopping experience is miles ahead of competitor Circuit City Stores, Inc. (NYSE: CC) from my experience. But, how about the performance of its website? I’ll admit that I’ve never ordered a single thing from Best Buy’s website. Apparently, I am missing out there.

In a recent study of retail website performance over the recent holiday season, Best Buy was joined with bookseller Barnes & Noble, Inc. (NYSE: BKS) and outdoor retailer Cabelas, Inc. (NYSE: CAB) as having the highest reliability of all retailers in a field of 26 candidates. Other retailers monitored included the world’s largest online retailer — Amazon.com, Inc. (NASDAQ: AMZN), Wal-Mart Stores, Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT). In terms of specific website performance figures like page downloading and transaction completion speed, retailers Circuit City and Victoria’s Secret ranked at the top.

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Filed under: Products and services, Law, New York Times’A’ (NYT), Lilly (Eli) (LLY)

When the New York Times recently broke a story that Eli Lilly & Co. (NYSE: LLY) was in confidential settlement talks with the federal government, the drugmaker was furious over the leak believing government officials were behind it. The company was probably enraged when it learned that one of its own lawyers accidentally sent a memo to a Times reporter about the settlement talks over whether it had improperly marketed Zyprexa.

“One of its outside lawyers at Philadelphia-based Pepper Hamilton had mistakenly emailed confidential information on the talks to Times reporter Alex Berenson instead of Bradford Berenson, her co-counsel at Sidley Austin,” according to Portfolio.com. “With the negotiations over alleged marketing improprieties reaching a mind-boggling sum of $1 billion, Eli Lilly had every reason to want to keep the talks under wraps. It was paying the two fancy law firms a small fortune to negotiate deftly and quietly.”

Pepper Hamilton was no doubt mortified but the Indianapolis-based drugmaker told the magazine that it would continue to retain the firm. Odds are good that there will be an adjustment or two to Lilly’s hefty legal bill.

This goes to show you that even the most sophisticated technology can’t save people from their own thoughtless mistakes.

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Filed under: Consumer experience, Economic data

American consumers, the pivotal factor in the consumer-dependent U.S. economy, may have modified their spending philosophy, The New York Times reported Tuesday.

Stung by the housing market correction, stagnant wage growth in certain job segments, above-average debt levels, and a slowing economy, Americans are saving more and using credit less — a shift that some analysts argue is a cultural inflection point of sorts, with huge implications for the economy.

Economist Steve Affinito told BloggingStocks Tuesday that while The Times‘ interpretative report did not “cite a large enough sample size to meet my fancy,” it nonetheless provided data points that support what macroeconomic indicators are saying about consumer choices.

“We know that the savings rate has increased in the last six months, and retail sales are sluggish, at best. Take these and combine them with much tighter credit terms for home equity loans and other credit and what you get is a pull back in purchases, particularly purchases on credit,” Affinito said.

Continue reading Are U.S. consumers moving away from buying on credit?

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Filed under: Other issues, Politics

On Super Tuesday, as the United States approaches its first $1 billion election, the chorus sounds a familiar refrain.

The conventional wisdom regarding campaign spending — that the U.S. is spending too much on campaigns, or that certain groups have too much influence — reminds me of what Mark Twain said about the the public’s attitude toward the weather: “Everybody complains about the weather, but no one ever seems to be able to do something about it.”

While some would argue that campaign spending is not a problem, for the sake of argument let’s assume that the conventional wisdom on campaign spending is valid. The next logical question would be, what changes could and should we make to the current campaign spending laws?

Limits on campaign spending? The U.S. Supreme Court has ruled that Congress and regulators can do this, but only up to a degree, as beyond a certain point it violates the First Amendment’s free speech right.

Continue reading As U.S. approaches $1 billion campaign, what can be done to control spending?

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Filed under: Amazon.com (AMZN), Columns

We can always expect companies to put their best foot forward in their press releases but, as investors, it’s our job to see through the hype.

One common tactic that companies use to try to excite investors is the trumpeting of “record sales” or “record earnings.”

Today for instance, pornography purveyor New Frontier Media (NASDAQ: NOOF) issued a press release reporting the company’s third quarter earnings, blaring the headline “New Frontier Media Reports Strongest Revenue Quarter in Company History.”

But here’s the thing: investors generally look for year over year growth from the companies they own — a growing company should be reporting “record” revenue with some frequency. It’s the equivalent of a fifth grader bragging to his parents that his math class is “the hardest math class I’ve taken in my entire life.” As it should be!

Continue reading Seeing through the hype in ‘record earnings’ and ‘record sales’

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Filed under: Management, Google (GOOG)

We’ve written about Incredimail (NASDAQ: MAIL) before. You know Incredimail: that cool, profitable internet company with those great smiley faces embedded in email, cool screen savers, and cool chat client?

The company just takes software programs and activities we take for granted — and makes them fun.

We’ve written about the small cap’s travails with partner Google Inc. (NASDAQ: GOOG), and the on-again, off-again partnership that threw the stock for a ride a couple weeks back. The company uses Google to help monetize traffic on the site and the loss of Google as a partner was enough to whack the stock.

Continue reading What’s going on at Incredimail (MAIL)?

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Filed under: Earnings reports, Microsoft (MSFT), Yahoo! (YHOO), Time Warner (TWX)

Time Warner Inc.’s (NYSE: TWX) new Chief Executive Jeffrey Bewkes will have plenty to talk about when the world’s largest media conglomerate — and parent of BloggingStocks — reports fourth quarter results tomorrow.

The results themselves aren’t going to be anything spectacular. Analysts expect earnings of 29 cents on revenue of $12.64 billion, according to Thomson Financial. As usual, the focus will be on AOL, in particular how much gains in advertising offset the declines in the dial-up business. Also, the company will need to detail its plans for the cable business which may be hurt by an economic slowdown. The future of the publishing business also remains in doubt as advertisers continue to flee print for online media.

Microsoft Corp.’s (NASDAQ: MSFT) $44.6 billion bid for Yahoo Inc. (NASDAQ: YHOO) only adds to the confusion. Will investors give Bewkes enough time to transform AOL’s business to an ad-supported model? The strategy is the correct one though it was initiated about two years too late. But given the premium that Microsoft is offering for Yahoo, investors are bound to pressure Bewkes to make a similar deal for AOL, which today bought the online marketing company buy.at.

Continue reading Time Warner’s day of reckoning nears

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Filed under: Economic data, Politics

Here’s an item that’s so laced with irony it defies comment — I can’t come up with a metaphor that does it justice. It’s sort of like rearranging deck chairs on the Titanic, but it’s much, much, much more pathetic.

President Bush’s 2009 budget is expected to lead to a deficit of more than $400 billion. But not to worry, our fearless leader has a plan to cut back on spending.

According (subscription required) to the Wall Street Journal, “In years past, the White House’s Office of Management and Budget distributed about 3,000 copies of the budget free to media outlets, congressional offices and elsewhere in the capital. This year, those folks must buy a printed copy or access one free online.”

Members of Congress can get a copy for $67.50. Ordinary taxpayers hoping to get the details on how their elected officials plan to waste their money and then some will have to pay $213 — or read it online.

The plan will save taxpayers an estimated $1 million over 5 years.

So $400 billion divided by $200,000… The President has found a way to shave off 1/2,000,000th of the projected deficit for 2009 that will be passed on to future generations.

Keep up the good work!

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Filed under: Earnings reports, Avon Products (AVP)

Avon Products (NYSE: AVP) reported Q4 earnings today, and it looks like the Avon Lady has beaten Wall Street. Revenues for the quarter jumped a nice 17% — got to love that. Diluted earnings per share dived 27% to $0.30, however — that’s not so lovable. Blame that dreaded cliche of earnings reports — restructuring costs.

Avon’s stock is currently trading up well over 5% as of 2:40 this afternoon. The company beat expectations of $0.28 per share. Avon saw a 20% increase in its beauty sales, an 18% increase in its beauty-plus category (that includes stuff like apparel, jewelry, etc.), and a 5% increase in its home products category. The number of active representatives also trended higher. Believe it or not, I buy Avon products every month from my friendly rep — I can’t live without its Advanced Techniques shampoos and its men’s body washes.

The stock is currently trading at a decent yield — approximately 2% — and it does have a good portfolio of women’s brands backed by the iconic Avon name. I’ll be honest, though, and say that, when it comes to consumer-products companies, I definitely think of companies like Procter & Gamble (NYSE: PG), Clorox (NYSE: CLX), and Colgate-Palmolive (NYSE: CL) first. At least those brands don’t need representatives to push them. Still, over the long haul, Avon will probably reward patient shareholders.

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Filed under: Earnings reports

Women of a certain age and socio-economic demographic know Elizabeth Arden Inc. (NASDAQ: RDEN) as a purveyor of prestige beauty products and luxurious day spas. Fortunately for the company, many of those women live outside the U.S. and have yet to be affected by the slowdown in consumer spending. International growth for the company increased 20%, while net sales in the U.S., including the December holiday pampering season, declined 0.5% with weak holiday sales at upscale department stores.

Boosted by international sales, net income increased $8.9 million to $33.8 million, or $1.15 per share. Despite the soft holiday quarter reported January 31, the company is sticking with its previous guidance of diluted EPS $1.65-1.75, up $0.29-0.39 over FY2007. Net sales are forecast to increase in the low single digits — not the most dramatic forecast.

Elizabeth Arden is tightening its supply chain and increasing the sale of higher profit margin products in its international markets. The company will introduce new fragrance brands in 2008, including the fragrance M by Mariah Carey to appeal to younger customers. Investors do not seem to be much impressed with these new initiatives. The stock has dropped almost 6% over the weekend.

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