Good Evening! On Wednesday, there was a sharp drop in US stocks after the credit rating downgrade of the US government by Fitch, a prominent rating agency. This downgrade was attributed to concerns regarding fiscal and political instability.
All three indexes saw declines today with Dow Jones falling by 0.98%, S&P 500 falling a little more by 1.37%, and Nasdaq Composite seeing the biggest drop with 2.17%.
STUNNING PERFORMANCE
E.l.f Beauty (ELF) experienced a significant increase of 14% on Wednesday, reaching a record-high closing price of $133.19. This surge was attributed to the company’s strong financial performance during the quarter.
How well did the company do? The company which is recognized for its distribution of cosmetics in beautifully designed packaging at affordable prices through drugstores and large-scale retailers, has revised its projections following a 76% increase in net sales during the first quarter of the fiscal year. Additionally, the company experienced a noteworthy expansion of 280 basis points in gross margin, resulting in 70.5%. The growth of E.l.f. can be attributed to its value proposition, new product innovation, and marketing efforts.
With the current economy, it is perfect for E.L.F. The results line up with the observations made by other corporations regarding a discerning consumer base that remains active in their purchasing behavior, yet exhibits a heightened level of selectivity when making buying decisions. The reason for this is that the CEO of E.l.f. emphasized the average price range of the company’s products, which is around $6, in contrast to the average prices of over $9 for traditional cosmetics brands and over $20 for high-end brands.
COLD DRINKS TAKE OVER
Starbucks (SBUX) is intensifying its focus on cold beverages, a trend that is currently highly popular. With the heat, it makes sense.
Why though? The cold beverage business in the U.S. accounted for 75% of the total drink sales in the company’s fiscal Q3 results. According to CFO Rachel Ruggeri, the popularity of cold products is on the rise, particularly among younger consumers such as Gen Z and millennials, who exhibit a stronger preference towards cold items due to their distinct tastes.
On top of that, the consumption of cold beverages experienced an 8% increase during the previous quarter, in contrast to a 2% growth observed in the consumption of hot drinks. According to her statement, cold drinks exerts influence across all periods of the day, resulting in increased business activity throughout the entirety of the day.
They are even changing their ice cubes! The utilization of traditional cubed ice may become outdated as Starbucks considers changing to nugget ice, which includes smaller, pellet-shaped ice resembling the type commonly served at Sonic. According to Ruggeri, we are currently in the initial stages of our exploration into the realm of nugget ice.
Some testing is being done first! The ice is presently undergoing testing at its cold beverage establishments with the highest volume, in order to enhance cold storage capabilities. The corporation intends to implement the supply of nugget ice throughout its retail locations but it may require a considerable amount of time.