According to Jacobs Douwe Egberts’s website, the company holds either the number-one or number-two position in coffee markets for more than 18 countries in Europe, Latin America, and Australia.
D.E Master Blenders and Mondelez have created a larger coffee player that will put up a tough fight with market leader Nestlé. The joint venture brings some powerful coffee brands under one roof.
PepsiCo (PEP) announced its 2Q15 results before the opening of financial markets on July 9. After rising in pre-market trade that day, PepsiCo’s share price fell 1.1% to $94.59.
PepsiCo’s gross margin for 2Q15 improved 103 basis points to 55.0% compared to 2Q14. The company’s 2Q15 operating margin improved by 107 basis points to 18.2%.
PepsiCo’s innovations include healthier product variations such as Quaker Quick 3-Minute Steel Cut Oats, Cracker Jack’D protein snacks, and the nuts-based milks under the Naked Juice brand.
PepsiCo is aggressively developing its noncarbonated beverage portfolio. Carbonated soft drinks made up less than 25% of its 2014 global revenue.
PepsiCo’s Frito-Lay North America segment continued its growth streak in 2Q15 ended June 13, 2015. The segment’s revenue rose 2% to $3.5 billion compared to 2Q14, mainly due to higher pricing.
PepsiCo’s 2Q15 revenue fell 5.8% from the comparable quarter of the previous year due to a 10% impact of currency headwinds. PepsiCo expects a strong dollar to continue to impact its revenue in 2015.
PepsiCo (PEP) announced its 2Q15 results on July 9, 2015. The company’s adjusted EPS came in at $1.32 per share, beating the consensus Wall Street estimate of $1.24.
The stock prices of Target and CVS Health rose seven sessions in a row, from June 15–June 23. The pharmacy sale announcement by both companies resulted in a positive reception by the markets.
It may make sense for other pharmacy chains to pursue similar deals with retailers. Diplomat Pharmacy’s focus on specialty medication gives it a fee-for-servicing model with several major food and staples retailers.
Target’s sales and profitability numbers have been affected firstly due to its data breach and secondly due to its Canada exit. Its operating margins have declined for three straight years.
CVS Health has been aggressively expanding, announcing its intention to acquire long-term care provider Omnicare in May for $12.7 billion in an all-cash deal.
Return on capital for CVS came in at ~10.1% in 1Q15. The Target deal may enable CVS to enhance its capital utilization metrics.
CVS Health is the largest drug retailer in the US in terms of revenue and market cap. The company posted almost $139.4 billion in sales in 2014.
CVS’ retail pharmacy segment earned an operating income margin of almost 10% in 2014 on sales of $67.8 billion.
CVS is planning to transfer Target’s generic business to Red Oak Sourcing. Target currently sources from McKesson.
Target’s decision to sell its pharmacy business to CVS Health for $1.9 billion will allow Target to focus on more complementary products to CVS’ pharmacy business, including health and wellness.
Target’s customer traffic has been pressured in the last two years, partly due to the data breach in 2013. Plus, the number of transactions has been declining.
Target reported an annual turnover of ~$4.2 billion for its pharmacy business in the last fiscal year, representing ~5.6% of its sales.