Sarah Gilbert Portland, Oregon - http://www.cafemama.com
Sarah Gilbert is a blogger by trade and a finance geek at heart. She cut her teeth on her first Excel spreadsheet full of financials at the tender age of 21, when she began her investment banking career in First Union's Loan Syndications group. She went on to get her MBA from Wharton, work at Merrill Lynch and fall in love with analyzing company strategy and endless rows of numbers. So she tried her hand at *setting* strategy, working for a number of exciting and under-discovered startups in various product management roles, all of which seemed to center around writing business plans and, yes, making spreadsheets. She got into blogging as a marketing strategy and loved it so, it took. She now works for AOL and blogs all day (and some of the night) long, with her little boys yanking at her elbow, in her beloved 1912 Portland home.
Sarah Gilbert Portland, Oregon - http://www.cafemama.com
Sarah Gilbert is a blogger by trade and a finance geek at heart. She cut her teeth on her first Excel spreadsheet full of financials at the tender age of 21, when she began her investment banking career in First Union's Loan Syndications group. She went on to get her MBA from Wharton, work at Merrill Lynch and fall in love with analyzing company strategy and endless rows of numbers. So she tried her hand at *setting* strategy, working for a number of exciting and under-discovered startups in various product management roles, all of which seemed to center around writing business plans and, yes, making spreadsheets. She got into blogging as a marketing strategy and loved it so, it took. She now works for AOL and blogs all day (and some of the night) long, with her little boys yanking at her elbow, in her beloved 1912 Portland home.
This post is part of our Ads Gone Bad series. Share your thoughts and memories of this ad in the comments, and be sure to check out our other posts on marketing gone wrong.
Bloggers weren't kind to Nike's campaign for its Hyperdunk basketball shoes in late July. Three printed ads produced by Wieden+Kennedy were blamed as fostering anti-gay messages.
Most of the ads depicted one basketball player dunking over another in vaguely homo-erotic positions (mostly with one player's face in the other's crotch) with 'trash talk'-type slogans such as "Punks Jump Up," "Say Hello," "That Ain't Right." The hot-button line was from a popular 1992 rap song, "Punks Jump Up to get Beat Down," by Brand Nubian. The song was a good theme for basketball courts but for one thing; its lyrics, which advocated violence against homosexuals and featured the line, "I ain't down with gays."
At first, Nike supported the ad campaign. But when bloggers took the shoe giant to task for its "ethical sloppiness," Nike and its ad agency backed off and decided to withdraw the ads "to underline our ongoing commitment to supporting diversity in sport and the workplace."
Nike's move coincided with an ad-industry-wide debate about the use of gay stereotypes. Mars, Inc. also pulled an ad during the same week based on its criticism from national homosexual groups.
This post is part of our Ads Gone Bad series. Share your thoughts and memories of this ad in the comments, and be sure to check out our other posts on marketing gone wrong.
Wendy's ads promoting its dollar menu were meant to be hip. They depicted regular people mindlessly doing ridiculous things, like banging their heads against trees, or jumping in an enormous hole, or (in the ad in question), filling up with helium sucked from balloons so they floated near the ceiling. It was only the rare person dressed in a red-pigtailed Wendy's wig that countered the crowd. In the ad in question, a voice-over wonders why consumers would just fill up on anything when 99 cents will get you a junior bacon cheeseburger!
The subtlety of the message was lost on the National Inhalant Prevention Council. They made a public statement opposing Wendy's International, Inc.'s (NYSE: WEN) depiction of customers inhaling helium.
The Prevention Council said that the ad sends the wrong message and says that "Kids get the idea it's OK to put a gas in your body." While a Wendy's spokesperson contacted by BloggingStocks pointed out that even the ad does not condone helium inhaling; in fact, he says, "the enlightened consumer knows that it's wrong!" -- the ads didn't run much longer.
This post is part of our Ads Gone Bad series. Share your thoughts and memories of this ad in the comments, and be sure to check out our other posts on marketing gone wrong.
Was Rachael Ray wearing a keffiyeh, the ancient traditional Bedouin headdress that has lately become the symbol of Palestinian extremists, especially the Fatah? No, she wasn't, but when Michelle Malkin wondered if Dunkin' Donuts spokescheerleader Rachael Ray was promoting terrorism in an online ad, Dunkin' Donuts pulled it almost immediately.
Rachael Ray's paisley scarf with a fringe, selected by her stylist, wasn't anywhere close to a keffiyeh (and it turns out there are disagreements about whether the white-and-black color is a symbol of terrorism, or it's the red-and-black; even Palestinians can't agree). Honestly, I don't think it looks great on her, but what do I know. For Dunkin' Donuts to pull an ad based on the rantings of an ultra-conservative columnist? Far more worthy of boycott than being accused of having a spokeswoman who might wear a paisley scarf while drinking a Cool Latte. One liberal pundit says she's sticking with Starbucks (NASDAQ: SBUX) until the ad comes back. What do you think?
This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Four Bucks below in the comments.
As big multinational corporations go, Starbucks (NASDAQ: SBUX) had such possibility. Rooted in the heart of the Pacific Northwest, born of grunge rock and a commitment to really good coffee and a distinct sense of place, embracing the centuries-old European coffeehouse tradition with its literary name, Starbucks, Captain Ahab's first mate in Moby Dick. The company's founders were all about the beans, buying them directly from growers in Africa and Central America and roasting the beans themselves.
It was entrepreneurial upstart Howard Schultz who conceived of the strategy of making espressos, coffees, and lattes in the coffee shops and selling them for big profit margins. And in the 1980s, milk was cheap and coffee was cheaper. I like to imagine that, as the company's founders sat around a cafe table in Seattle's Pike Place Market, drinking their mellow brew and listening to Schultz's wild ideas, the others scoffed at the concept of someone paying upwards of three dollars for a latte.
This post is one in a series on prominent company nicknames. See all 25, and share your thoughts and memories about Whole Paycheck below in the comments.
Having long shopped at overpriced gourmet foods markets, I'll admit to having rolled my eyes a bit -- maybe even scoffed -- when I first heard the beloved nickname for Whole Foods (NASDAQ: WFMI), "Whole Paycheck." Of course, this was also when I was single and living on a dot-com boom-style income.
Today, I rarely shop at Whole Foods; there isn't one in my neighborhood, and it's true: it's not difficult to spend upwards of $100 on ingredients for one meal. While there are choices on the lower end of the price spectrum, especially in the company's 365 house brand line and seasonal produce, the grocery chain has long prided itself on providing a wide range of organic and gourmet ingredients; and if its customers demand star fruit from Brazil, stinky cheeses from around the globe, and sushi-quality tuna, by all means, Whole Foods will provide it, and won't bat an eye about charging for its hard work.
The analysts were right about one thing: Starbucks Corporation (NASDAQ: SBUX) recorded revenues of $2.6 billion in the third fiscal quarter of 2008, ending June 29, 2008. They were not so right, however, about the earnings per share, which they called at 18.3 cents. The coffee giant recorded a loss of $6.7 million, or about a penny a share, due to charges related to store closings. According to financial reports, the comparable figure is 16 cents a share. And Robert W. Baird analyst David Tarantino could have written the report on same-store sales (eerily, it was in his exact words): Starbucks' press release stated that the company suffered "a mid-single-digit decline in U.S. comparable store sales, and was a slight deterioration from the second quarter."
U.S. revenue growth was due to store growth, an odd circumstance in an environment where 600 stores will be closing this month and next. A bright spot is the Global Products Group, which attained a 4% increase in revenues, generated mostly from ready-to-drink products like iced coffee beverages.
Excluding the 19 cents of year-to-date restructuring charges, Starbucks now expects annual earnings per share to be "in the mid-seventy-cent range" with fiscal 2009 results between $0.90 and $1.00 per share. Investors were initially thrilled at the results (maybe they feared worse?), driving Starbucks shares up 63 cents, or 4.29%, to $15.30. I'll be listening to the investor call over the next hour and will update the post with any particularly interesting bits.
Like any vendor-of- unnecessary-luxuries in a recession-type era, Starbucks Corporation (NASDAQ: SBUX) hasn't been doing swimmingly this year. The company's stock is 27.7% since its January 2nd open of $20.14; the second fiscal quarter results showed declining same-store sales; and the company's founding CEO fired his replacement and took the company back over. Furthermore, yesterday marked announcements of dozens of store closings in Australia and the layoffs of about 1,000 nonstore employees.
It may not be a good time to be a Starbucks investor. The company reports fiscal third quarter earnings after market close today. Analysts expect Starbucks to have earnings growth despite the setbacks; they are projecting earnings of 18.3 cents a share on revenues of $2.6 billion, according to Thompson. My best guess, though, is that the same-store sales will decline further and that Schultz will attempt to bury the disappointment with promises of a streamlined, more open company and more efficient operations in the next quarter. With all the closings set to occur over the next few months, it's likely that efficiencies won't be recognized until the next fiscal year. Just how patient are Starbucks investors?
The stock was down today 28 cents, or 1.87%, to $14.71 a few minutes before market close.
When big cuts precede the announcement of quarterly earnings, I can't help but expect bad things in the earnings release. Today's twin announcements by Starbucks (NASDAQ: SBUX); first, that the company is shuttering most of its 84 Australia stores due to "challenges unique to the Australian market"; and second, that the company was cutting about 1,000 nonstore jobs; surely make it a likelihood that the fiscal third quarter was not pretty. There was not an estimate of the total job to be cut between Australian store closings, the 600 U.S. closings, the previously-announced reduction in headquarters staff and today's announcement; but it must total several thousand.
Starbucks hasn't offered any guidance for the quarter, but analyst consensus is that the company will earn profit of 18 cents a share on revenue of $2.62 billion. Analysts seem to agree that Starbucks' same-store sales, which declined in the fiscal second quarter, will decline further ("mid-single digits" according to Robert W. Baird analyst David Tarantino).
The fact that Starbucks is laying off thousands and shuttering hundreds of stores tells me the company is cleaning house in a big way due to startlingly poor results; but will investors be pleased or pessimistic about the company's now-slimmer future?
This post is part of a series on celebrity spokespeople who ended up doing serious harm to the brands they were hired to promote, or vice versa. See how we rank the 20 top spokesperson fiascos.
Ahh, Madonna. I was a teen in the late 80s and so she had me right where she wanted me: hanging on her every lyric, willing to be titillated, shocked, or otherwise addicted to her poppy music.
She had PepsiCo (NYSE: PEP) right where she wanted it, too, as a spokesperson for the would-be-edgy soda company in 1989. Pepsi and Madonna produced a very long and affecting commercial using her "Like a Prayer" song, in which Madonna watches the eight-year-old version of herself in a video dreaming of being a pop star one day.
The commercial was extremely well-done and well-received (it still gives me goosebumps today, despite those awful late-80s hairdos; that is, until the real video for "Like a Prayer" came out. It took "suggestive" to an entirely new level, what with the obvious flirtation between Madonna and a statue-cum-priest, the stigmata on her hands, and the burning crosses and racial tensions.
Pepsi pulled the ads and canceled all its appearances with the singer immediately, though I wonder if the company couldn't run the ads again now? If you can get past the salacious nature of the rumored affair with A-Rod, Madonna is not nearly so controversial today, and now the commercial seems sweet.
This post is part of a series on celebrity spokespeople who ended up doing serious harm to the brands they were hired to promote, or vice versa. See how we rank the 20 top spokesperson fiascos.
When Ben Curtis first hit the TV advertisement airwaves, I couldn't decide whether I was enchanted or annoyed. Personal computers were all the rage and Dell (NASDAQ: DELL) was the sweetest apple on the PC tree. When the "Dell Dude" enthusiastically told his little friend, "Dude, you're getting a Dell!" -- weren't we all a little excited?
And, let's be honest, wasn't he -- and Dell -- trading on the unspoken currency of the pot-smoking twang in his voice? It was hilarious, this college kid computer cheerleader. Unfortunately, hilarity equaled truth. In 2003 (right around the time he was phased out by the four cute Dell interns -- which is a whole different story) Curtis was busted for buying a very small amount of pot. "For personal use."
It was hardly the criminal arrest of the century (probably not even of that night in New York), it marked the end of Curtis' career with Dell. It didn't signal the end of his notoriety, however; he was given some coverage late last year for his bartending gig at Tortilla Flats, a popular financial district eatery in New York. The story goes that he makes great tips from fans of his former alter ego, and he's often asked to say his money line. He even dressed up as the Dell Dude for Halloween.
Who wants to bet we'll see him in an indie flick before too long?
This post is part of a series on celebrity spokespeople who ended up doing serious harm to the brands they were hired to promote, or vice versa. See how we rank the 20 top spokesperson fiascos.
When the Milk Processor Education Campaign hired the Olsen twins for its "Got Milk?" campaign, they though they were buying into the stars' wholesome image. But even from the start, the muttering began. Why was Ashley wearing a t-shirt with an image from the Velvet Underground album famous for celebrating drug use and sadomasochism? Aren't the Olsen Twins' short statures counter to the claims that milk builds strong bones? (The MPEC insisted that teens looked up to the Olsen twins, no matter how short they are.)
And then there was the controversy they really should have seen coming when they dressed up the ultra-mini Mary-Kate for the photo shoot. Two months after the magazine campaign hit the newsstands, Mary-Kate was checked into an eating disorder treatment facility. She not only didn't 'get milk?"; she didn't 'get' any kind of food.
Adding irony to the PR debacle was the statement made by the twins at the time of the campaign launch, that "we want to help make sure our fans are healthy like us." If "healthy" describes Ashley and Mary-Kate Olsen, and millions of their fans are planning to follow their dietary guidelines, well, the milk industry is in for some trouble.
I hemmed and hawed when I saw Jennifer Openshaw's piece on MarketWatch a few weeks ago; her opinion was that Starbucks (NASDAQ: SBUX) would recover much of its lost value in these past several months of sluggish sales, rising milk costs and slipping coolness, no matter what the naysayers, say. Her argument: that Starbucks was great because of its atmosphere and general quality standards in coffee. While I certainly agree that Starbucks is still an attractive "third place" and would pick Pike Place brew every time over McDonald's or Dunkin Donuts coffee, I hesitated. Had management already made too many mis-steps? Had hubris got the best of the 'Bucks?
The latest news; that Starbucks management has plans to close 600 stores in the U.S. this year; could be an indication of positive things in the company's stock price. It certainly had traders in after-hours activity eagerly snapping up shares, sending 72 cents, or 4.6%, to $16.34 around 2 a.m. I'm always leery, though, of a huge strategy reversal such as this. In my analysis of Starbucks' financial statements, the company spends about $300,000 to start a new store, and this is largely funded through cash. Management regularly offers old furniture and equipment to its high-ranking employees when upgrading or shutting down a store, so it's unlikely that much of the cost will be recouped. Doug McIntyre noted further that Starbucks will continue to pay more millions in lease costs; the company is known for locking up prime real estate with serious long-term lease agreements. Sure, the loss won't affect the cash balance much, and the charge will be "one-time," so the financial picture will still look rosy in a year when the charge has dropped into "historical financial statements." Investors don't look back.
But by acknowledging that some $180 million in costs, not to mention the hundreds of millions probably spent to train and employ staff at these locations, was a big waste of money, Starbucks management is owning up to a future of slow growth.
This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.
Johnnie Bryan Hunt, eponymous founder of J.B. Hunt (NASDAQ: JBHT), was, like so many Depression-era children, a jack-of-many-trades. He picked cotton, harvested grain, sold lumber, auctioned livestock, sold lawn sod, and drove a truck. He was a handy soul, inventing a rice hull press and designing a unique poultry truck.
It was the rice hulls that would be the start of J.B. Hunt. J.B. came up with the concept of using rice hulls for chicken bedding. He and a partner used the rice hull business as seed money to buy five trucks and seven trailers and in 1969 started J.B. Hunt Transport. Today the company operates 11,000 trucks and about 47,000 trailers and containers, though its founder died in 2006 -- in time to see his little transport business become the largest publicly-traded trucking company in the world.
It's fitting that J.B. Hunt, which made its start on the profit earned from chicken farmers, should be based in rural Arkansas -- the land of poultry. Lowell, Arkansas is a tiny town, made up of only about 5,000 residents, so J.B. Hunt is a big force. With 16,000 employees, the company could triple the town's size based on its payroll alone.
This post is part of our Big Company, Small Town series, featuring large companies and the small towns in which they are headquartered.
Like most big companies located in small towns, Tyson Foods (NYSE: TSN) has a delightfully quirky origin. John Tyson, owner of a battered truck and 500 chickens, opportunist, and debtor in the Depression-era 1930s struck an idea that probably seemed like folly to his neighbors: he'd deliver chickens to Chicago and Kansas City, where they'd get more money.
I'm sure for every story like Tyson's, there were 100 that didn't turn out so auspiciously. But in this tale, the hero comes back to his little Arkansas hometown with a profit and pays off his debts. He keeps on raising and selling birds in points north, eventually devising a plan to keep more of the profits by "vertically integrating" (I'll bet dollars-to-doughnuts he didn't call it that) and incubating his own chicks instead of buying them from a hatchery, as well as milling his own feed instead of buying it from a feed store.
This wasn't the end of Tyson's forethought. He bought a broiler farm in Springdale, Arkansas (beginning the company's history in that town) and started to cross-breed birds designed for meat production, instead of using heritage (or "pedigree") breeds.
Talk to anyone about what little technology company has a chance at being the Next Big Thing in social media, and chances are you'll hear the name "Twitter." Everyone's twittering about Twitter, even my mom knows all about it. News of the platform's $15 million funding round has been making the rumor rounds for over a month,
Today the rumors were confirmed with news of the funding on the Twitter blog, and a new nugget: Jeffrey Bezos of Amazon.com (NASDAQ: AMZN) is one of the funders, through his personal investment company, Bezos Expeditions. The company didn't confirm the size of the round (or so much of a whisper of the company's valuation), but said they would spend the money on the always-aching infrastructure and reliability.
As my favorite media analysis guy Marshall Kirkpatrick says, "As founders are concerned, Bezos could be called Mr. Scalability - making this an awesome partnership to tackle Twitter's biggest obstacle." It may not prove great things for Twitter's one-day IPO; Bezos certainly hasn't proven to be a brilliant generator of shareholder value -- but for today, it's proof that the great idea has a lot of legs.
This post is part of our 
This post is part of our 
This post is part of our 
This post is one in a series on prominent company nicknames. 
This post is one in a series on prominent company nicknames. 
The analysts were right about one thing: 
Like any vendor-of- unnecessary-luxuries in a recession-type era, 
When big cuts precede the announcement of quarterly earnings, I can't help but expect bad things in the earnings release. Today's twin announcements by 
This post is part of a series on celebrity spokespeople who ended up doing serious harm to the brands they were hired to promote, or vice versa. See how we rank the 
When Ben Curtis first hit the TV advertisement airwaves, I couldn't decide whether I was enchanted or annoyed. Personal computers were all the rage and 
When the Milk Processor Education Campaign hired the Olsen twins for its "Got Milk?" campaign, they though they were buying into the stars' wholesome image. But even from the start, the muttering began. Why was 
I hemmed and hawed when I saw 
This post is part of our 
This post is part of our 
UAL bankruptcy rumors untrue: Stock goes to 1 cent, old news story reportedly the culprit
Are you in love with Apple?
The Wal-Mart Weekly: Taking ownership of quality control and product support
