Tag Archives: Business/Consumer Services

Travel

Southwest Airlines sees travel on the rise, but stock is not a bargain | Instant News


Text size Southwest Airlines on Tuesday released optimistic forecasts as airline shares strengthened as signs of coronavirus cases continued to decline. While Southwest (ticker: LUV) doesn’t see an increase in bookings, demand appears to improve from January, one of the worst months in the pandemic. The airline said operating revenue in February is now expected to decline 65% to 70%, year over year, from an earlier range of 65% to 75%. A larger increase could take place in March, with expected revenues down only 20% to 30% year over year. And an even bigger increase is likely in April: forecasted capacity in the southwest that month up to 81% from last April, though still down 25% from April 2019. February is seasonally low and bookings tend to increase in March for spring break. But Southwest’s update is still a sign that consumers are eager to get on the plane and will book trips as the pandemic recedes. Southwest shares were ahead 0.4% on Tuesday to around $ 51. The larger NYSE Arca Airline index fared even better, gaining 1.9%. The improving outlook for Southwest follows encouraging demand for travel around the President’s Day holiday weekend, according to Raymond analyst James Savanthi Syth. Fare pricing could also strengthen, she notes, as carriers increase spring break prices. “We believe this is providing positive revenue for other US airlines,” she wrote in a report Tuesday. Indeed, this could bode well for airlines that haven’t released many improvements in their outlook for the first quarter, including Alaska Air Group (ALK), American Airlines Group (AAL), United Airlines Holdings (UAL ) and JetBlue Airways (JBLU). . The sector is also benefiting from the positive news from Washington. The Centers for Disease Control and Prevention said over the weekend it was not set to impose Covid testing requirements for domestic travel (similar to testing now required by the CDC for international arrivals. ). More rescue funding can also be given to the industry. The airlines are set to receive an additional $ 14 billion as part of the $ 1.9 trillion stimulus package the Biden administration is developing. However, Southwest stock may not be the best performer as the recovery strengthens. On the one hand, it’s trading at nearly 19 times the estimated profits for 2022, a steep premium for full-service network operators like United and Delta Air Lines (DAL). United is trading at 14.8 times 2022 earnings while Delta is trading at 11.5 times. Investors have long given Southwest a premium for its financial strength and potential to gain market share in a recovery led by domestic leisure travel. But this premium multiple could limit the stock’s gains relative to traders whose expectations are lower in their stocks. Indeed, Southwest has been lagging behind for months; it is ahead of just 13% in the past three months, less than half of the 27.3% gain in the NYSE Arca Airline index. The weakest title in the industry was United, up just 9.3% in the past three months. United is much more exposed to trade and international routes, and its stock reflects a slow recovery in those segments. Delta has also lagged behind, gaining 16.7% in the past three months. Investors increased the shares of domestic leisure-oriented carriers much more. Expectations are low for full-service carriers, although this could be a ticket to outperform if pandemic trends continue to improve. .



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Germany

Nearly half of MyTheresa’s customers in the US and Germany spend tens of thousands on luxury goods each year: Cowen | Instant News


Cowen analysts conducted a survey of customers in the US and Germany who shop on the luxury e-commerce site MyTheresa, finding that around 45% typically spend more than $ 30,000, or € 30,000, annually.

The study also found that the site had high customer loyalty, with around 90% saying they were more likely to recommend MyTheresa to others.

MyTheresa is one of a number of e-commerce retailers that have gone public recently, with stocks that make them debut in January. The parent company for Mytheresa Group GmbH is MYT Netherlands Parent BV
MYTH,
+ 5.25%.

“We love MyTheresa’s consistent execution which is reflected in the steady growth of active customers, revenue and profitability from FY18 to date, as well as 100% brand retention which is key to supply,” wrote analysts led by Oliver Chen.

Analysts note that MyTheresa is a $ 600 million platform with a potential long-term revenue growth of over 20%.

Read: Germany-based MyTheresa joins a growing list of e-commerce retailers that are going public

“As well as consistency, MyTheresa is positioned as a major beneficiary of global luxury online; Cowen predicts the global online luxury goods market will grow + 25% CAGR [compound annual growth rate]. “

Cowen initiated the performance of the MyTheresa stock with a target price of $ 40.

JPMorgan analysts said MyTheresa had “the opportunity to have a head start on e-commerce growth in the underrated luxury online retail sector.”

In the online luxury retail category, analysts say MyTheresa has less than 20% overlap with its competitors. Other companies in the sector include Farfetch Ltd.
FTCH,
-1.63%

and Nordstrom Inc.
JWN,
+ 1.95%,
which sells online in addition to its traditional department store locations.

See: Ralph Lauren cuts 30% of the company’s North American office space, closing stores around the world

Too: Michael Kors became a stronger brand by growing smaller

“MyTheresa is uniquely positioned in the online multi-brand luxury sector, driven by a highly curated product offering and a disciplined focus on the high-end luxury segment,” wrote JPMorgan.

“On the product side, MyTheresa facilitates an efficient purchasing process for time-limited consumers, with a focus on quality over quantity, making it easier for consumers to find the best product in a short amount of time.”

JPMorgan started up MyTheresa stock overweight with a target price of $ 38.

UBS, which started MyTheresa on a neutral basis, highlighted the risk of stocks.

“Risk factors include competition from the luxury industry, a concentrated supply base, a concentrated customer / shopper base and the complexity of an international presence,” the note said.

However, UBS remains “constructive” on the opportunities for retailers as a luxury online businessman.

MyTheresa shares rose 5.3% in trading Tuesday. The stock started trading at $ 35.85 and closed Friday at $ 31.34.

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Food & Drink

DoorDash buys Chowbotics, a maker of food preparation robots | Instant News


DoorDash Inc. has purchased Chowbotics, a maker of food-preparation robots, as part of its efforts to help merchants grow their businesses, the delivery app company announced Monday.

Hayward, California-based Robot Chowbotics makes customizable salads, grain and stir bowls, parfaits, cereals, and snacks and can be found at grocery stores, hospitals and other locations. DoorDash thought that the machine could be used to automate some food preparation in restaurants.

By Dash
RUN,
-2.10%

did not disclose how much was paid for the company, which said on its LinkedIn profile that it had deployed more than 100 of its robots. The deal was finalized late last year, said a DoorDash spokesman.

“Bringing Chowbotics technology to the DoorDash platform provides us with new opportunities to help merchants expand their current menu offerings and reach new customers in new markets,” said DoorDash co-founder Stanley Tang in a statement.

As the coronavirus pandemic has pushed the delivery of food and other goods to record levels, DoorDash is the top food delivery app in the US, with a 50% market share, according to Edison Trends.

See: The pandemic has doubled the food delivery app business

The venture-backed Chowbotic raised $ 20.8 million, according to Crunchbase, and was valued by PrivCo for $ 50 million to $ 100 million in 2018.

Rick Wilmer, Chowbotics chief executive, said in a statement that the deal would allow his 7-year-old company to take advantage of DoorDash’s lead in US food delivery.

“DoorDash has unmatched reach and expertise to help us develop and apply our technology more broadly, so together, we can make fresh, nutritious food easy for more people, says Wilmer.

DoorDash shares closed at $ 177.43, a 2.1% decline, on Monday. The company’s shares are up more than 24% so far this year.

The company’s acquisition of Chowbotics is not the first step in automation. In 2019, it bought Scotty Labs, which works on technology to remotely operate vehicles. The fair value of the purchase is $ 5 million, according to DoorDash’s filings with the Securities and Exchange Commission.

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Travel

The impact of the Covid-19 pandemic on business travel hits local economies | Instant News



The coronavirus pandemic has inflicted a lingering, and possibly permanent, impact on business travel that is likely to weigh on jobs and economic growth in some communities for years. Beyond the blows to airlines, hotels, travel agents and car rental companies, the decline in business travel is rippling through entire ecosystems of related commerce, including airport stores, downtown bars and restaurants, construction companies building convention stages, artists, taxi drivers and aircraft parts makers. Domestic and international business travelers to the United States directly spent $ 334.2 billion in 2019, supporting 2.5 million jobs, according to the US Travel Association. But when you consider the follow-up effects, he estimates that the economic output and jobs supported by business travel were about double those before the pandemic. “When a big convention or event takes place, the whole city is involved,” said Tori Emerson Barnes, the association’s public affairs and policy manager. “The florist who supplies the flowers, the dry cleaner who prepares the linens, the cafe which serves travelers. Entire city centers have been revitalized as a result of meetings and events, and they’ve really struggled this year. When global restrictions to control the spread of Covid-19 were put in place last spring, businesses and road workers were forced to adapt, make sales calls and attend meetings of the board of directors by videoconference rather than on-site visits, and adapt to virtual training. and networking instead of seminars in conference centers. .



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Travel

Wyndham Destinations, in Travel and Leisure Shopping, Looks Beyond Timeshare | Instant News


Courtesy Wyndham Destinations Text size Timeshare company Wyndham Destinations is gearing up for a post-Covid world. In an effort to expand its reach and change its brand, Wyndham Destinations (Ticker: WYND) earlier this week struck a $ 100 million deal with Meredith (MDP) to purchase Travel + Leisure, which operates a platform- eponymous and well regarded media form and several travel clubs. Wyndham Destinations next month will change its name to Travel + Leisure Co. and trade under the ticker symbol TNL. However, the timeshare business, which will remain the primary focus of the company, will continue to operate under the Wyndham Destinations name. “With the acquisition of Travel + Leisure, we are starting to reach the roughly 100 million homes that travel outside of the timeshare space,” Michael Brown, CEO of Wyndham Destinations, told Barron’s in an interview Thursday. Wyndham Destinations, based in Orlando, Fla., Will make a $ 35 million payment to Meredith at close, with the remainder to be paid by 2024. Meredith will continue to operate Travel + Leisure’s media operations independently, including marketing and advertising, over a period of 30 years. renewable license agreement. T + L’s two travel clubs have around 60,000 members, Brown said, adding that the deal will help the company in several areas, including its branding strategy. “By switching to T + L, it opens up multiple opportunities for other travel and tourism brands,” he says. Until now, he adds, “people saw us as being directly related only to Wyndham hotels and therefore if we had to talk to other hotel companies or other companies in the travel industry and tourism, the question becomes, ‘Do I want my brand and Wyndham; is this a good fit? Wyndham Hotels & Resorts (WH), a hotel franchise company, was split in 2018. The two companies, however, maintain a temporal relationship. Wyndham Destinations operates the hotel company’s rewards program for its business assistance, for example. T + L Travel Clubs also offer potential benefits to Wyndham destinations. “It will really boost our ability to serve a different demographic, in many cases a younger demographic,” says Brown. A Credit Suisse research note observed on Tuesday that Wyndham Destinations will be able to use T + L’s network, including magazine readers, “to reach a customer who has shown a clear affinity for travel but [is] not to be marketed. Wyndham’s primary businesses are the sale of timeshare and the operation of a timeshare exchange. In 2019, it acquired the Alliance Reservations Network for $ 102 million, a move the company sees as a way to eventually expand its travel offerings. “We will continue to focus on growing the Wyndham Destinations timeshare business, while utilizing the technology we obtained when we purchased Alliance Reservations Network and the brand and clubs we acquired from Meredith to expand. our addressable market, ”a company spokesperson said. Like its peers, Wyndham Destinations has been hit hard by the pandemic. It said third-quarter earnings of 47 cents per share, down from $ 1.47 a year earlier, but reversing the previous two quarters of losses. The business has been helped by many clients who visit its properties. “People are really staying closer to home, and we now have over 90% of our car arrivals where it was 70, 72%,” says Brown. Wyndham stock jumped nearly 8% on Wednesday, when the deal was announced, and closed at $ 49.13. Since then, stocks have lost some ground and were trading around $ 48 on Friday morning. The stock has held up relatively well over the past year, returning around minus 1%. Write to Lawrence C. Strauss at [email protected]



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