Filed under: Company News, JC Penney, Earnings, Barnes & Noble, Food & Beverage, Target
From a free music website that’s trying to encourage more of its users to pay to an energy drink maker that trying to win back its good name, here’s a rundown of this week’s big winners and losers in the business world.
J.C. Penney (JCP) — Loser
Ron Johnson has bitten off more than he can chew.
The retail guru worked wonders at Target (TGT) before taking over Apple’s (AAPL) retail operations just as it was launching its wildly successful Apple Store concept. Unfortunately for J.C. Penney’s beleaguered CEO, there is no such thing as an iSkirt.
Johnson’s makeover of the department store chain early last year continues to get worse. Just follow the head-scratching year-over-year declines in same-store sales at J.C. Penney since last Feburary’s reboot.
| Comps | |
|---|---|
| Q1 2012 | (18.9%) |
| Q2 2012 | (21.7%) |
| Q3 2012 | (26.0%) |
| Q4 2012 | (31.7%) |
Source: J.C. Penney.
Johnson is finally admitting that getting rid of sales and coupons was the wrong move. J.C. Penney saw its net sales shrink by a stunning $4.3 billion this past year.
Now about that iSkirt thing …
Monster Beverage (MNST) — Winner
Energy drinks came under heavy fire last year for health issues such as “palpitations, seizures, strokes, and even sudden death,” but Monster CEO Rodney Sacks wants to restore the image of the second-largest energy drink company.
During his quarterly conference call, Sacks made it clear that a serving of Monster’s signature energy drink contains less than half the caffeine of a similar coffee beverage.
He also points out that coffee chains have been expanding their menus to offer iced and sweet coffee drinks that are appealing to younger drinkers. In other words, don’t buy the argument that Red Bull and Monster are dangerous because they appeal to adolescents with their cool and sweetened adrenaline-fueling drinks.
Sacks doesn’t want regulators and the media to go after the baristas. He just wants the press to cool it on the attacks on his niche when there are so many other companies selling beverages that are far more caffeinated.
The NOOK — Loser
The week began with Barnes & Noble’s (BKS) CEO Leonard Riggio moving to take the retailer private, but now we know why he only offered to acquire the namesake bookstores and the BN.com website. Riggio didn’t want to buy the NOOK business, and apparently holiday shoppers felt the same way.
NOOK sales declined 26 percent to $316 million during the holiday quarter, and the segment’s operating loss more than doubled. It’s hard to compete against cheap Kindles, especially when Amazon.com (AMZN) is willing to use its hardware as a loss-leader with the aim of making it up later in media and e-book sales.
This is a sharp slide for NOOK, and it will be even harder to get readers to hop on the platform now that it’s failing in public.
Dollar Tree (DLTR) — Winner
Thriftiness is always in fashion. Shares of Dollar Tree moved higher after the discounter posted better than expected results. Giving shoppers more bang for their bucks is literally what dollar stores do, and the holiday quarter was a market-beating period for Dollar Tree. The retailer’s profit of $1.01 a share on $2.25 billion in sales landed just ahead of analyst expectations.
Pandora (P) — Loser
Music-loving freeloaders better start watching the clock.
Pandora is capping free ad-supported streaming of its popular music service at 40 hours a month. Avid listeners will have to pay $0.99 to continue listening that month or just pay more to become Pandora One premium subscribers, where they don’t have to put up with the ads and get better quality streams.
Pandora points out that just 4 percent of its users are streaming that much, but that isn’t the point. Many of Pandora’s 65.6 million active listeners may start scaling back on usage fearing that they may bump the ceiling.
It’s the wrong time for Pandora to be doing this. Usage was flat sequentially from December to January, and the number of active listeners actually declined last month. Pandora needs to find a way to encourage more of its freeloaders to start paying, but erecting this type of tollbooth seems like a bad idea.
Motley Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com, Apple, and Monster Beverage. The Motley Fool owns shares of Amazon.com, Apple, and Monster Beverage. Try any of our Foolish newsletter services free for 30 days.
Photo Credit: Bebeto Matthews, AP
