Week's Winners and Losers: Netflix Flies, Shutterfly Flubs
From a struggling department store chain delivering better than expected financial results to a popular photo-printing services provider botched a mass mailing, here's a rundown of the week's smartest moves and biggest blunders in the business world.
Keurig Green Mountain (GMCR) -- Winner
Coca-Cola (KO) is apparently a coffee addict. The world's leading beverage company turned heads earlier this year when it paid $1.25 billion for a 10 percent stake in Keurig Green Mountain. This week it announced that it's bumping its stake to 16 percent, paying a much higher price for the new shares.
Keurig Green Mountain is the company behind the country's most popular single-serve coffee maker. In a few months it plans to enter the carbonated beverage market with Keurig Cold. Coca-Cola is on board to provide soft drink flavors for the machine, and now the company has a greater stake in seeing that Keurig Cold is successful.
Shutterfly (SFLY) -- Loser
"There's nothing more amazing than bringing a new life into the world," begins a promotion that Shutterfly mailed out this week. "As a new parent you're going to find more to love, more to give and more to share -- we're here to help you every step of the way."
Shutterfly intended for the mailing to go out to customers who had recently ordered birth announcements, reminding them that matching thank you cards are now in order for the family and friends who provided gifts for the new baby. The problem here is that the marketing email went out to a far wider base of Shutterfly registered users. Twitter and Facebook were alive with folks joking or complaining about the mishap. It was an amusing blunder for most recipients, but it's easy to see how this kind of missive could hit hard to others.
Netflix (NFLX) -- Winner
We're apparently a nation of Netflix addicts. Online trend watcher Sandvine (SVC) reports that the streaming video service accounted for 34.2 percent of the North America's peak downstream Internet traffic during the first half of the year.
Chipotle Mexican Grill (CMG) -- Loser
There may be a groundswell of support to pay employees at fast food chains more, but at least some hires at a popular quick-service chain may be making too much. There was a surprise at Chipotle's annual shareholder meeting on Thursday as just 23 percent of Chipotle's investors voiced approval for the chain's executive pay package.
The "say on pay" vote doesn't carry the same kind of weight or meat as one of Chipotle's heavy burritos. The non-binding poll sends a clear message that investors don't want to see its co-CEOs combine to take home $49.5 million in compensation last year.
J.C. Penney (JCP) -- Winner
One of Friday's biggest winners was J.C. Penney, soaring after posting better than expected quarterly results. The struggling department store chain posted a smaller loss than expected, but the real gem in the report was that same-store sales rose 6.2 percent during the period.
That's great, but let's be realistic. Comps fell 16.6 percent during last year's fiscal first quarter and plunged 20.1 percent the year before that. In other words, comparable-store sales may be positive, but we're actually eyeing a nearly 30 percent slide in comps since the fiscal first quarter of 2011. It's great to see the retailer take a step in the right direction, but it's still far away from where it used to be.
Motley Fool contributor Rick Munarriz owns shares of Keurig Green Mountain and Netflix. The Motley Fool recommends Chipotle Mexican Grill, Coca-Cola, Keurig Green Mountain and Netflix. The Motley Fool owns shares of Chipotle Mexican Grill and Netflix and has the following options: long January 2016 $37 calls on Coca-Cola and short January 2016 $37 puts on Coca-Cola. Try any of our newsletter services free for 30 days.