5 Winners and Losers of the Week in Business
Lennar (LEN) -- Winner
Real estate continues to bounce back.
The National Association of Realtors revealed this week that sales of existing single-family homes are at their highest level in more than three years. The prices that prospective home buyers are willing to pay are also up nicely, soaring nearly 12 percent to a median sales price of $173,600 over the past year.
It's against this uplifting backdrop that Lennar reported blowout quarterly results. If existing homes are selling briskly this naturally bodes well for new construction, and that's where Lennar and its fellow developers are thriving.
Profitability more than tripled in Lennar's latest quarter as revenue climbed 37 percent. Like a game of Monopoly an hour or so in, folks are finally starting to buy houses.
Lululemon Athletica (LULU) -- Loser
The yoga apparel retailer became the butt of a lot of jokes this week after recalling its Luon pants for excessive sheerness.
The recall at Lululemon covers black yoga pants of its proprietary Luon brand that have been sold since March. The fabric is thin enough in this particular batch that it's embarrassingly transparent. The retailer blamed a supplier for the issue.
Google (GOOG) -- Winner
The world's leading search engine may have taken some heat seven years ago for shelling out $1.65 billion to buy YouTube, but the move continues to pay off.
YouTube announced this week that the video-sharing site is now attracting one billion unique monthly visitors. This finds YouTube drawing as many active users a month as social networking juggernaut Facebook (FB).
Sure, YouTube is harder to monetize. Serving up chunky video files on a free ad-supported site doesn't come cheap. However, YouTube's success has helped Google attract video advertisers worldwide, and it gives Android a leg up too.
J.C. Penney (JCP) -- Blunder
If the turnaround at J.C. Penney isn't going well, maybe we can blame the turbulence.
Bloomberg is reporting that CEO Ron Johnson and as many as nine executives are making costly weekly commutes into the struggling retailer's headquarters in Texas.
The company counters that many of the top brass do a lot of traveling anyway on business -- so it's not as if it's a major loss to have them out of the office on Fridays and weekends -- but that's not the point here.
J.C. Penney has three corporate jets, and those things aren't cheap. At a time when the team that Johnson has assembled is performing horribly -- sales plunged $4 billion last year to its lowest level since 1987 -- having shareholders foot the bill to fly the execs home and back every week seems excessive.
Nike (NKE) -- Winner
The sultan of swoosh had a strong holiday quarter.
Nike posted better than expected quarterly results on Thursday night. Revenue climbed 9 percent to $6.2 billion, and adjusted earnings of $0.73 a share landed ahead of both the $0.60 a share in net income it generated a year earlier and the $0.67 a share that analysts were targeting.
Between an improving economy and a growing awareness of personal fitness, Nike's in the right place at the right time with its athletic footwear and sweat-shaking apparel.
Motley Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google, Lululemon Athletica, and Nike. The Motley Fool owns shares of Facebook, Google, and Nike. Try any of our newsletter services free for 30 days.