Chamber networking lunch set Wednesday
The Capitola-Soquel Chamber of Commerce will hold a networking lunch from 11:30 a.m. to 1 p.m Wednesday at Bargetto Winery, 3535 N. Main St.
The guest speaker is photographer and inspirational speaker Taylor Boone. Her presentation, “The Power of Video– Visual Storytelling for Business, will explain video marketing for business
Whole Foods Market Capitola will cater lunch and Zizzo’s Coffeehouse & Wine Bar will provide coffee. Heritage Chocolates Corralitos will provide chocolate. Wine from Bargetto Winery will be available for purchase. The lunch will also include raffle prizes and an opportunity for networking.
Cost: $20 for Capitola-Soquel Chamber members and $25 for nonmembers. Seating is limited. Advance registration is required. Register at master.capitolachamber.com.
To view previous business digest items, visit santacruzsentinel.com/tag/business-digest/. Send your business news items to firstname.lastname@example.org or call 831-706-3253.
Target reports fiscal 2019 q2 earnings
Target’s profit jumped 17% during the second quarter as its in-store pickup and same-day shipping services drew more customers, prompting the retailer to raise its outlook for the rest of the year, the company said Wednesday.
Sales at the company’s stores that have been open for at least a year grew 3.4% during the second quarter, also exceeding expectations. Target said same-day fulfillment services, including order pick up, drive up and Shipt same-day delivery business contributed nearly 1.5 percentage points of its overall same-store sales growth.
Target’s shares surged 13% in premarket trading, on pace to open at a record high.
Here’s what Target reported for the fiscal second quarter ended Aug. 3 compared with what analysts were expecting, based on Refinitiv data:
- Earnings per share: $1.82 vs. $1.62 expected
- Revenue: $18.42 billion vs. $18.34 billion expected
- Same-store sales: up 3.4% vs. growth of 2.9% expected
Target and its peers are searching for ways to make shopping more convenient. To compete with Amazon, they are improving their online stores and trying to ship faster. They are also betting that consumers do not mind visiting stores, especially when it’s faster than waiting for delivery.
“By appealing to shoppers through a compelling assortment, a suite of convenience-driven fulfillment options, competitive prices and an enjoyable shopping experience, we’re increasing Target’s relevancy and deepening the relationship between our guests and our brand,” Target CEO Brian Cornell said in a statement announcing the earnings results.
Net income rose to $938 million, or $1.82 a share, compared with $799 million, or $1.49 per share, a year ago. That was 20 cents better than expectations for earnings per share of $1.62, based on Refinitiv data.
Total revenue grew 3.6% to $18.42 billion from $17.78 billion a year ago, topping estimates for $18.34 billion.
Sales at Target stores open for at least 12 months and its website were up 3.4%, better than expectations for growth of 2.9%. A year ago, same-store sales climbed 6.5%. Target said traffic was up 2.4% during the latest quarter. Meanwhile, digital sales surged 34%, down from a 42% increase during the first quarter.
Like Walmart, Target is expected to have seen somewhat of a sales bump around Amazon’s 48-hour Prime Day event in early July.
Cornell said the company had “outstanding performance” during the first half of 2019, giving it the “confidence” it needed to boost expectations. Target is now calling for adjusted earnings per share to fall within a range of $5.90 to $6.20, up from a prior range of $5.75 to $6.05.
“Traffic and sales continue to grow,” Cornell said.
Target’s report comes on the heels of its bigger rival Walmart’s, which last week reported earnings that topped expectations and also raised its outlook for the year. That’s despite the ongoing threat of additional tariffs taking effect amid the U.S.’ trade war with China.
Analysts have largely expected Target to continue to see same-store sales gains, while other retailers like department store chains are struggling to draw traffic. Target also suffered a register outage during the latest quarter, but that wasn’t enough to noticeably weigh on sales.
Target’s report comes on the heels of its bigger rival Walmart, which last week reported earnings that topped expectations and raised its outlook for the year. That’s despite the ongoing threat of additional tariffs taking effect amid the U.S.’s trade war with China.
Analysts have largely expected Target to continue to see same-store sales gains, while other retailers like department store chains are struggling to draw traffic. While Target suffered a register outage during the latest quarter, which could end up slightly hitting its same-store sales, its traffic is still anticipated to climb this quarter.
Target this week announced the launch of a new grocery line, called Good & Gather, marking its biggest private-label venture to date. The retailer has been investing heavily in incubating its own brands. It’s also been investing in store remodels, opening small-format locations in major metros like New York and rolling out curbside pickup for online orders.
Target shares, which have a market cap of $44.2 billion, are up more than 30% this year.
Netflix and Big Theater Chains Haggle Over Release of Scorsese’s ‘Irishman’
LOS ANGELES — When Martin Scorsese signed with Netflix to make “The Irishman,” the star-studded epic scheduled to have its premiere on the opening night of the New York Film Festival next month, he put himself in the crossfire of the so-called streaming wars.
The film, which may represent Mr. Scorsese’s grandest statement yet on the intersection of organized crime and American politics, is expected to be a strong contender in the 2020 Oscar race. He took his $159 million movie, with Robert De Niro in the lead role, to Netflix after his home studio of recent years, Paramount Pictures, balked at the budget.
The full extent of the theatrical rollout remains up in the air. Where, exactly, moviegoers will be able to see “The Irishman” won’t be clear until the discussions between Netflix and select major theater chains end. They have been dragging on for months. The negotiations are just the latest chapter in the conflict between the film industry’s old guard and the tech-driven upstarts.
“The Irishman,” a throwback to the 1990s Scorsese hits “Goodfellas” and “Casino,” was announced more than a decade ago at Paramount, the studio where he made “The Wolf of Wall Street” and “Silence.”
Mr. Scorsese struck the deal with Netflix in 2017, and filming started soon afterward. The film, which makes use of “de-aging” special effects to keep the actors looking the right ages in a saga that spans decades, is in the final stages of postproduction as the director works to get it done in time for its Sept. 27 festival premiere.
In his ninth collaboration with Mr. Scorsese, Mr. De Niro plays the title character, Frank Sheeran, a hit man known as the Irishman who claimed he killed the Teamsters boss Jimmy Hoffa, whose body has never been found, in 1975. He is joined in the cast by the “Goodfellas” and “Casino” alumnus Joe Pesci, who came out of retirement to play the mob boss Russell Bufalino. Al Pacino — appearing for the first time in a film directed by Mr. Scorsese — portrays Hoffa.
Scott Stuber, the head of Netflix’s film division, is leading talks for the streaming company with at least two large chains, AMC Theatres, which operates 11,000 screens worldwide, and Cineplex, the largest exhibitor in Canada, with over 1,600 screens, according to two people familiar with negotiations. Ted Sarandos, Netflix’s chief content officer and Mr. Stuber’s boss, has also taken part in the talks. The director has been pushing for a robust national theatrical release, two people with knowledge of Mr. Scorsese’s thinking said.
Two other large chains, Regal and Cinemark, told The New York Times that they were not in discussions with Netflix over “The Irishman.”
Adam Aron, the AMC chief executive, said in a statement, “Talks are underway with Netflix about our showing ‘The Irishman’ and other Netflix films, but the outcome of those conversations is not yet clear.”
AMC and Cineplex are negotiating with Netflix separately, the people familiar with the talks said. A crucial sticking point has been the major chains’ insistence that the films they book must play in their theaters for close to three months while not being made for available for streaming at the same time, which does not sit well with Netflix. Talks broke down in July, only to pick up again two weeks ago, the people said.
Netflix, Mr. Scorsese and Cineplex declined to comment for this article.
Because of the impasse over the three-month theatrical window, Netflix has yet to give any of its films the kind of blockbuster theatrical releases that companies like AMC can provide. The streaming giant’s reluctance to concern itself with weekend box-office numbers reflects its laser focus on its main mission: delivering streaming video on demand to its 151 million subscribers worldwide.
Having built itself into an entertainment powerhouse by keeping its subscribers interested and coming back for more, the company does not want to be distracted by the demands of the old-style movie business, even as it makes deals with legendary filmmakers like Mr. Scorsese.
“Netflix is in the subscriber happiness business,” said Richard Greenfield, a tech and media analyst. “They need to attract more members and make current members happier. ‘The Irishman’ is really important.”
Many Netflix movies, like the Adam Sandler vehicle “Murder Mystery,” which Netflix said had 78 million household views in its first four weeks, seem made for living-room viewing. But Netflix has also come out with more ambitious offerings, like “Roma,” the meditative black-and-white film from the director Alfonso Cuarón. “Roma” won praise from critics on its way to three Oscars this year, for best director, best cinematography and best foreign language film.
As Netflix’s movie division has matured, the company has softened its stance on theatrical distribution. Last year, it struck deals with independent movie houses and small theatrical chains like Landmark and Alamo Drafthouse, which have looser requirements than the big exhibitors on exclusive showings, for one-week runs of the Sandra Bullock thriller “Bird Box” and the Coen brothers’ Western “The Ballad of Buster Scruggs” before they were made available for streaming.
For “Roma,” Netflix went further, giving it a 21-day theatrical release at the independent and small-chain theaters before its subscribers could watch it on devices or TV screens. Netflix has said there will be some kind of theatrical release for “The Irishman,” but has so far resisted going much beyond the 21 days it granted “Roma,” the people familiar with the talks said.
When he agreed to make the film for Netflix, Mr. Scorsese was aware that a wide release was not guaranteed, but he chose the company because it was “actually making our movies, from a place of respect and love for cinema,” he said in an email to The Times last year.
The trailer for “The Irishman,” released last month, has racked up millions of YouTube views, suggesting that it has greater commercial potential than “Roma.” The potential box-office revenue could be a boon for a company that has bet big on a single revenue stream, despite calls from Wall Street to diversify. Netflix stock fell by 12 percent last month after it reported its first decline in domestic subscribers since 2011.
“While direct release of smaller budget films on Netflix makes economic sense, we believe franchise-oriented films will need to include theatrical release on a large scale to optimize returns,” said the financial services company Barclays in a January report.
The coming Scorsese film also has a shot at the prize that eluded “Roma” despite Netflix’s costly awards campaign on its behalf: the Academy Award for best picture.
Oscar eligibility is not much of a factor in how Netflix handles the rollout. To qualify for the Academy Awards, a film must have a 7-day run in a commercial theater in Los Angeles County, according to rules recently confirmed by the Academy of Motion Picture Arts and Sciences’ board of governors; it can even be shown on another platform at the same time. Still, there is an Academy contingent that may look askance at Netflix if it does not play by the old rules for a cinematic feature like “The Irishman.”
Despite its craving for Oscar gold, Netflix does not want to be distracted from its core business — especially now that it will be challenged by the Walt Disney Company, which plans to unveil its Disney Plus streaming service Nov. 12, and Apple, which is starting its equivalent, Apple TV Plus, on an unspecified date this fall. Following those giants into the increasingly crowded digital-video marketplace will be WarnerMedia and Comcast, among others.
In an effort to stay ahead of its current and future rivals, Netflix spent $12 billion on original content in 2018. While the company has paid large sums to star television producers like Ryan Murphy, Shonda Rhimes and the “Game of Thrones” duo David Benioff and D.B. Weiss, it has not stinted on its movie division, which made 55 films last year, not counting documentaries and animated movies, and has brought aboard A-list directors like Noah Baumbach, Ron Howard, Dee Rees, Steven Soderbergh and Guillermo del Toro.
Even as it works to add subscribers, Netflix cannot afford to alienate top filmmakers. Mr. Stuber is mindful that the way to keep the talent happy is to get their work on the big screen. He recently bolstered the Netflix film arm by hiring two distribution executives from 21st Century Fox, Spencer Klein and Pablo Rico.
AMC and other large chains worry that if they grant Netflix a shorter theatrical window, they will have to do the same for other studios. In his statement, Mr. Aron added that he would be “delighted” to show Netflix movies, but he had a caveat: “We can only do so, however, on terms that respect AMC’s important and close relationships with our longstanding studio partners, including Disney, Warner Brothers, Universal, Sony, Paramount, Lionsgate and so many other filmmakers who are the lifeblood of our substantial business.”
Some Hollywood executives have said the theater chains must adapt if the cinematic experience is going to compete with the convenience of streaming. “Both the studios and the exhibitors have to look at every aspect of how we do business together and figure out different paradigms to move it forward,” said Chris Aronson, the former chief distribution executive at Twentieth Century Fox.
More than 95 percent of movies stop earning their keep in theaters at the 42-day mark, well short of the three-month window demanded by major chains, according to Mr. Aronson. That suggests the need for change, he said.
“The movie theaters feel that if they blink at all, it will all blow up,” said Jeff Blake, the former chairman of worldwide marketing and distribution for Sony Pictures.
Netflix’s unwillingness to promise wide releases has come with a cost. The company lost out on the rights to “Crazy Rich Asians,” the 2018 romantic comedy that grossed nearly $240 million at worldwide box offices. The director, Jon M. Chu, and the author of the novel it was based on, Kevin Kwan, decided to go with Warner Bros., saying they wanted the movie to play in as many theaters as possible.
Netflix’s stance has also put it at odds with the theatrical chain Regal, which said in a statement to The Times: “Currently, we are not in any discussion with Netflix on ‘The Irishman’ nor on any other movie. Of course, if Netflix will decide to respect the industry business model and release the movie with a proper theatrical window, we will be more than happy to discuss the booking of the movie in Regal theaters.”
Mr. Scorsese directed another film for Netflix, “Rolling Thunder Revue: A Bob Dylan Story by Martin Scorsese,” a playful documentary released simultaneously in select theaters and on the streaming service in June, but he plans to make his next film, “Killers of the Flower Moon,” starring Leonardo DiCaprio, at Paramount.
DealBook Briefing: Trump Admitted to Exploring Tax Cuts. Here’s Why.
Good Wednesday morning. Apparently President Trump was serious about wanting the U.S. to buy Greenland: He called off a state visit to Denmark after the Nordic country’s prime minister said that the island wasn’t for sale. (Was this email forwarded to you? Sign up here.)
Why Trump admitted that he’s exploring tax cuts
President Trump confirmed yesterday that he is considering tax reductions, after White House officials denied the idea. The reason: The U.S. economy might need the extra help.
Mr. Trump said he’s weighing cuts to payroll taxes and capital gains taxes. He claimed that it’s not because he is worried about a recession, and argued that the U.S. economy remains “incredible.”
• Private nonresidential fixed investment has dropped well below its 2018 peak.
• The growth rate for companies’ investments in new equipment is just under 1 percent.
• The Institute for Supply Management’s Purchasing Managers’ Index, a gauge of manufacturing health, is now just above recession levels.
And White House officials think a recession may happen. They’ve told donors as much, but have argued that any downturn would be “moderate and short,” according to Politico.
But the new proposals may not do much. Payroll tax cuts would increase workers’ paychecks, but they’re unlikely to make it through Congress. Lowering capital gains taxes would primarily benefit the wealthy. And by far the bigger problem, in many economists’ eyes, is the damage that the White House’s trade war with China, which Mr. Trump appears committed to, will inflict on the economy.
“It’s not a particularly coherent economic and political strategy,” Douglas Holtz-Eakin, an economic adviser to President George W. Bush, told the WSJ.
More: Central bankers are searching for new ways to combat slowing global growth as they prepare for their annual gathering in Jackson Hole, Wyo., tomorrow.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
For sale on Facebook: guns
The company’s Marketplace explicitly bans the sale of firearms. But a WSJ investigation suggests that sellers are using a very simple trick to trade guns on the platform.
• Sellers appear to list gun cases or boxes, which normally cost tens of dollars, for hundreds of dollars.
• “Those postings have become code for actual guns,” the WSJ writes, with sellers then explaining over private messages what is actually for sale.
• The WSJ found one gun case that usually retails for $30 listed at $950, and the seller explained that “he was really offering an AR-15 style semiautomatic rifle.”
Facebook has had problems with gun sales before, when users sold firearms in private Groups in 2016, and when Marketplace was first launched. But it tried to clamp down on the listings in both instances, saying they violated its rules.
The company said its screening “will never be perfect,” but added that it is “always looking for ways to improve our policies and enforcement.”
Four ways to rein in Big Tech
The Justice Department is doing it. So are the F.T.C. and Congress. Oh, and state attorneys general, too. We’re talking about antitrust investigations of Big Tech — but it’s unclear what kinds of remedies might result from the inquiries. Steve Lohr of the NYT takes a look at four main possibilities.
Bright-line breakups. The idea here is that a company can’t sell goods on a dominant online marketplace or platform that it owns, Mr. Lohr writes. It’s an aggressive approach that could prevent companies from entering new businesses. Many economists are leery of the approach, but it’s not implausible — and is supported by the presidential candidate Senator Elizabeth Warren.
Selective split-ups. “This is a case-by-case approach to breakups,” Mr. Lohr writes. One example: forcing Facebook to shed Instagram and WhatsApp. It’s probably more palatable to economists than the bright-line approach, but it’s important to consider whether it would actually enhance competition. There’s also a question of how easy it would be, if the businesses have become tightly enmeshed.
A tech watchdog. A new regulator “would be an expert group to supplement traditional antitrust regulators,” Mr. Lohr writes, that would be “able to move faster and have the expertise to constantly track the tech markets and trend.” Yet it’s unclear how much traction this idea would have with the Trump administration, despite bipartisan concern about Big Tech.
Unlocking our data. There are also more targeted ideas, some of which propose loosening companies’ control of user data, letting customers easily move from one service to another. Proponents say this would remove a barrier to competition. But it would require some finely crafted technical solutions.
Alibaba may be delaying its Hong Kong listing
The Chinese internet giant has reportedly pushed back a float of its shares on the Hong Kong Stock Exchange amid the ongoing protests in the territory, Reuters reports.
The listing may be pushed back until October after having been set for late this month, according to Reuters, citing unnamed sources. The hope is that political tensions will ease by then.
It would be one of the most prominent stock offerings in Asia in recent years, with a fund-raising target of $15 billion. Alibaba set a record for the largest-ever I.P.O. when it went public on the N.Y.S.E. in 2014.
Alibaba’s plans “are being closely watched by the financial community for indications on the business environment in the Chinese-controlled territory,” Reuters reports, because they provide “a window into Beijing’s reading of the situation.”
But there’s little sign that Hong Kong’s tensions will ease soon. Protests continue on the streets and in the airport, while Beijing and its state media continue to portray the demonstrations as “violent activities” meant to “trample the rule of law.”
The fallout could spread beyond Alibaba’s stock float. Secretary of State Mike Pompeo told CNBC yesterday that any violent crackdown on the protests by Beijing would make a U.S.-China trade deal “more difficult.”
Facebook’s conservative bias audit gets slammed
The company yesterday published the findings of an audit into whether its platform censors right-wing views, as many Republicans have argued without substantive evidence. But it quickly drew criticism from both sides of the aisle.
• The audit was performed by former Senator Jon Kyl, a Republican from Arizona, and a team from the law firm Covington & Burling.
• It was based on interviews with approximately 133 conservative lawmakers and groups.
• It describes their concerns about how posts are ranked, how content is determined to be misinformation and how the company defines hate speech.
• But it stopped short of concluding whether bias actually exists on Facebook’s platform.
Few people were impressed by the findings, according to Politico:
• “Left-leaning groups blasted the Facebook report for lending legitimacy to the bias allegations, which they say lack merit.”
• Republicans deemed it a whitewash, with Senator Josh Hawley of Missouri calling it “a smokescreen disguised as a solution.”
Mr. Hawley proposed a deeper analysis, urging Facebook to “conduct an actual audit by giving a trusted third party access to its algorithm, its key documents and its content moderation protocols,” then make the results public. That might be a good idea — though it’s unclear whether such an examination would support his view that conservative bias exists.
Why Apollo went to war with a former rising star
Imran Siddiqui was once considered a bright young star at Apollo Global Management, the giant investment firm. But he fell out with his mentor and Apollo co-founder Marc Rowan, and their row is now the talk of Wall Street, Mark Vandevelde and Sujeet Indap of the FT write.
• The battle revolves around Athene, a life insurer that the pair set up and which later became one of Apollo’s most profitable affiliates.
• But the two men feuded over how to run Athene. By 2017, Mr. Siddiqui had left Apollo — and Mr. Rowan didn’t even stop by to say farewell.
• By then, Mr. Siddiqui had begun work on a rival to Athene. That led to legal battles in the U.S. and Bermuda over noncompete clauses and misuse of Apollo insider information.
• The disagreement “has degenerated into an ugly grudge match that one rival private equity executive likens to ‘a circular firing squad.’”
• The fight “shows that Apollo’s veteran founders, like their counterparts at Blackstone, KKR and Carlyle, are wrestling with how to groom new leaders without giving up control.”
Bank of America has hired Samardh Kumar from Citigroup as a managing director to lead a new investment banking team focused on promising privately held start-ups.
The speed read
• A U.S. national-security panel has approved BlackRock’s purchase of a stake in the cybersecurity company Cofense from an investment firm with Russian ties. (WSJ)
• Goldman Sachs is sending top executives to Saudi Arabia in hopes of winning a role on Saudi Aramco’s I.P.O. (FT)
• Cigna is reportedly considering the sale of its group benefits insurance business, which could raise up to $6 billion. (Reuters)
• Uhuru, a Japanese start-up that connects smart devices to the cloud and is backed by SoftBank, plans to stage an I.P.O. in London this fall. (FT)
• Companies are financing stock buybacks with debt like never before. It could lead to disaster. (Fortune)
Politics and policy
• President Trump retreated from support for universal background checks on gun sales yesterday after a 30-minute phone call with the head of the N.R.A. (NYT)
• Mr. Trump said that Russia should be readmitted to the Group of 7, a proposal that other members will probably dislike. (NYT)
• Italy’s government collapsed yesterday amid a power struggle within its governing nationalist-populist coalition. (NYT)
• Prime Minister Boris Johnson of Britain will reportedly seek Mr. Trump’s support to name George Osborne, the former British finance minister, as the next head of the I.M.F. (Bloomberg)
• Foreign investment in Britain has fallen sharply since the country’s 2016 vote to leave the E.U. (FT)
• Britain is enrolling nearly 90,000 companies in a new customs system in hopes of minimizing disruption if it leaves the E.U. without a deal. (Reuters)
• The U.S. and Japan are rushing to finalize a partial trade deal. (FT)
• Why charging Ghislane Maxwell, who is accused of abetting Mr. Epstein in identifying girls who became his victims, could be difficult. (Politico)
• A new Facebook tool lets you see which apps and websites have tracked you. (NYT)
• YouTube reportedly plans to stop serving targeted ads to kids in order to comply with an F.T.C. settlement. (Bloomberg)
• Walmart has sued Tesla over claims that its solar panels caused fires on store roofs. (NYT)
• China denied that it was meddling with social media in an effort to undermine Hong Kong protesters. (WSJ)
• Getting faster internet at home might not be worth it. (WSJ)
Best of the rest
• Harvey Weinstein wants his trial moved out of New York City, arguing that intense media scrutiny makes it impossible to get a fair trial. (NYT)
• How the rising number of college-educated women is changing the workplace. (WSJ)
• One way to save capitalism: Pay workers more? (NYT Op-Ed)
• A whistle-blower has accused Disney of overstating revenues. (WSJ)
• Robots can’t replace compliance officers at banks. Yet. (Bloomberg)
• Why McDonald’s has embraced podcasts. (NYT)
Thanks for reading! We’ll see you tomorrow.
You can find live updates throughout the day at nytimes.com/dealbook.
We’d love your feedback. Please email thoughts and suggestions to email@example.com.
Survey says scientists mistrust a large amount of published research
Trump and Maduro confirm high-level talks between officials
Target reports fiscal 2019 q2 earnings
Russian Land of Permafrost and Mammoths Is Thawing
Gigi Hadid in Black Bikini in Greece 2019
Proteína animal X Proteína vegetal
Tech2 weeks ago
Russian Land of Permafrost and Mammoths Is Thawing
Fashion3 weeks ago
Gigi Hadid in Black Bikini in Greece 2019
Sports3 weeks ago
Proteína animal X Proteína vegetal
Entertainment3 weeks ago
SHAWN MENDES AND CAMILA CABELLO KISSING
Business4 weeks ago
Financial Crisis Yields a Generation of Renters
Entertainment3 weeks ago
Joyce Laboso was always the voice of reason among us – governor Ann Waiguru
Sports3 weeks ago
29/07/2019 || KHANAPARA TEER || ASSAM TEER || DIRECT HIT NO. || ASSAM GUTI || COMMON NO.
Politics2 months ago
A #MeToo Episode From 1969 Casts a Long Shadow for a Folk Legend