Penny Morgan

Both Donald Trump and Hillary Clinton have expressed a desire to reshape the tax code to make substantive changes in fiscal policy.

While Donald Trump wants to get rid of the Dodd–Frank Act, especially the Consumer Financial Protection Bureau, Hillary Clinton wants to retain it.

The 2016 US presidential election is scheduled for November 8, 2016. This election will mark the 58th quadrennial US presidential election.

Target’s (TGT) gross margin improved by ~50 basis points to 31.3% in fiscal 2Q16 from 30.9% in fiscal 2Q15.

Target’s (TGT) stock price fell 6.4% to $70.63 on August 17, 2016, after the company released its fiscal 2Q16 earnings.

Target’s (TGT) Signature Categories include Style, Baby, Kids, and Wellness. Target’s Signature Categories outpaced the total business by 3 percentage points in fiscal 2Q16.

Target’s (TGT) revenue declined 7.2% to $16.2 billion in fiscal 2Q16 from $17.4 billion in fiscal 2Q15.

Coty (COTY) and L’Oréal (LRLCY) are trading at higher valuation multiples relative to the S&P 500 Index (IVV)(SPY)(VOO) and the Dow Jones Industrial Average (DIA).

Coty (COTY) reported a decline in its gross margin in 4Q16 as well as fiscal 2016. The reported gross margin came in at 56.7% for 4Q16.

Fragrances net revenue rose 1.9% in fiscal 4Q16 and fell 7.6% to $2.0 billion for fiscal 2016 in reported terms.

After missing estimates last quarter, Coty came in ahead of Wall Street analysts’ estimates for revenue in fiscal 4Q16.

Coty (COTY) released its fiscal 4Q16 and full-year earnings on August 16, 2016. The quarter ended on June 30. Here’s what you need to know.

Altria Group (MO) and Philip Morris International (PM) are trading at higher valuations relative to the S&P 500 Index (SPY) (IVV) (VOO) and the Dow Jones Industrial Average (DIA).

Altria’s (MO) 1Q16 gross margin rose to 58.6% compared to 57.9% in 1Q15.

Estée Lauder (EL) ended calendar 1Q16 with a 3.5% rise in inventory.

Beauty companies continue to expand into a multi-pronged digital strategy that encompasses e-commerce, m-commerce, as well as digital and social media.

The beauty and personal care sectors have seen a high level of merger and acquisition (or M&A) activity in the last two years.

Like revenue, beauty companies’ calendar 1Q16 earnings gave out mixed signals to investors.

Philip Morris is planning to implement price increases in retail (XRT) markets that include Russia, Argentina, Germany, and Indonesia.

Philip Morris’s stock price fell by 1.3% to $99.28 after it released its 1Q16 earnings.

As a result of decreased operating income, Philip Morris’s (PM) operating margin fell by 2.8% to 41.9% in 1Q16.

After the Brexit referendum, Philip Morris’s risk exposure increased compared to other tobacco companies.

Philip Morris (PM) is set to release its 2Q16 earnings results before the Market opens on July 19, 2016. PM’s earnings and revenue missed the consensus Wall Street analyst expectations in 1Q16.

The Wall Street consensus analyst expectation for Philip Morris’s adjusted diluted EPS in 2Q16 is $1.19 per share.

Tobacco companies are trading at higher valuations compared to the S&P 500 Index (SPY) (IVV) (VOO) and the Dow Jones Industrial Average (DIA).

1Q16 inventory levels were lower for tobacco companies due to falling cigarette shipment volumes.

Due to increased health consciousness, most of the tobacco companies’ 1Q16 cigarette shipment volumes have seen falls.

The US tobacco industry is highly concentrated Its three leading players accounted for a combined retail (XRT) volume share of 86% in 2014.

Consumer packaged goods (or CPG) companies are trading at higher valuations compared to the S&P 500 Index (IVV) (SPY) (VOO) and the Dow Jones Industrial Average (DIA).

From January 2, 2015, to June 16, 2016, the stock prices of all consumer packaged goods (or CPG) companies have seen volatile movements.

The 1Q16 margins of consumer packaged goods (or CPG) companies sent strong signals. These companies have been investing heavily in innovative products and other growth initiatives.

In its fiscal 3Q16 earnings release, Procter & Gamble (PG) announced continued investment in innovation, new user trials, and improved consumer value.

Revenue results for consumer packaged goods (or CPG) companies for 1Q16 were mixed. Procter & Gamble (PG) and Colgate-Palmolive (CL) started the quarter on a disappointing note.

Coty (COTY) reported a fall in its gross margin in fiscal 3Q16. Its reported gross margin came in at 61.2% in fiscal 3Q16 compared to 62.3% in fiscal 3Q15.

Coty (COTY) operates under three reportable segments: Fragrance, Color Cosmetics, and Skin & Body Care.

In fiscal 3Q16, Coty missed Wall Street analysts’ consensus expectation for revenue after beating the expectation in the previous quarter.

Coty released its fiscal 3Q16 earnings on May 3, 2016. The quarter ended on March 31, 2016. The company’s adjusted diluted EPS fell 50.0% to $0.09.

On June 13, 2016, Coty’s (COTY) stock price was trading at $26.36. The stock price has risen 5.7% year-to-date (or YTD) and 29.0% since January 2015.

Clorox is focusing on Brita’s water filtration product via a partnership between Brita and Stephen Curry, the Golden State Warriors’ point guard who is the NBA’s first unanimous MVP.

Clorox (CLX) raised its sales outlook to 1%–2% growth. However, on a currency-neutral basis, Clorox expects sales growth of 4%–5% for fiscal 2016.

Clorox’s (CLX) fiscal year-to-date cash flow generation came in at $0.3 billion, compared to $0.4 billion in the same period in 2015.

Apart from the other segments’ brands, Clorox’s International segment’s brands include PinoLuz, Limpido, Bon Bril, Agua Jane, and Chux.

In fiscal 3Q16, Clorox beat the consensus Wall Street analyst estimates on revenue after missing these estimates during the previous quarter. The consensus had projected revenue of $1.41 billion.

On May 31, 2016, Clorox (CLX) was trading at $128.54, a fall of 0.7% since its fiscal 3Q16 earnings were released. The company’s stock was trading at its two-year peak of $132.88 on May 12, 2016.

Operating income for the All Other segment decreased by 44.3% to $30 million in 1Q16. Despite a weak top line, Vuse Digital Vapor Cigarette continued to deliver robust results in 1Q16.

Operating income Reynolds American’s (RAI) reported operating income increased by 786.3% to ~$6.1 billion in 1Q16 versus $0.7 billion in 1Q15. This includes charges for implementation costs, asset impairment, and exit costs. It also includes transaction-related and financing costs for the Lorillard acquisition and related divestitures to Imperial Tobacco Group (ITYBY), as well as other […]

Reynolds American’s (RAI) 1Q16 revenue for the American Snuff Co. increased by 7.5% to $0.22 billion compared to $0.20 billion in 1Q15. The increase was primarily due to higher pricing.

Natural American Spirit’s retail market share increased by 0.3% to 2% in 1Q16 in the US, on a volume growth of 22.1%. Natural American Spirit’s volume grew by double digits, increasing by 22% in 1Q16.

Reynolds American (RAI) released its 1Q16 earnings on April 26, 2016. The company’s adjusted diluted earnings per share rose by 16.3% to $0.50 per share in 1Q16.

During 1Q16, Reynolds American’s board approved an increase of 16.7% in its quarterly cash dividend to $0.42 per share, or an annualized $1.68.

Reynolds American’s (RAI) key to transformation is robust results and an active innovation pipeline. The company formed RAI Innovation Company to seek alternatives to traditional cigarettes.

Reynolds American’s (RAI) Santa Fe Natural Tobacco Company’s Natural American Spirit brand aligns with consumers seeking authentic products. The company notes that Natural American Spirit brand is made of natural, additive-free tobacco.

Reynolds American (RAI) redesigned Camel’s website in January 2016. The website features a bold, simple design optimized for mobile devices.

Reynolds American’s (RAI) acquisition transaction with Lorillard and its related divestitures to Imperial Tobacco (ITYBY) occurred in order to shift cigarette volumes into RAI’s drive brands.

Reynolds American (RAI) expects cigarette volumes to be down, closer to the -2% range for the year. RAI noted that consumers are moving into premium brands at the expense of value or discount brands in the US.

With increasing competition from L’Oréal, Shiseido, and Coty, Estée Lauder continues to expand its position in Western Europe and emerging markets.

Estée Lauder (EL) is trading at a higher valuation relative to the S&P 500 Index (IVV) (SPY) (VOO) and the Dow Jones Industrial Average (DIA).

Estée Lauder’s (EL) fragrance segment’s reported revenue rose 4.6% in reported terms and 7% on a constant-currency basis to $0.3 billion in fiscal 3Q16.

Estée Lauder’s makeup segment’s net revenue rose 7.3% in reported terms and 11% in constant currency terms to $1.2 billion in fiscal 3Q16.

After beating revenue estimates last quarter, Estée Lauder came in line with consensus Wall Street Estimates on revenue in fiscal 3Q16.

On May 16, 2016, Estée Lauder’s stock price was trading at $92.79. Its stock price has risen 6.4% year-to-date (or YTD) and 22.8% since January 2015.

Colgate’s (CL) Asia segment’s net revenue decreased 2.3% to $0.6 billion in 1Q16.

Colgate-Palmolive (CL) and Clorox (CLX) are trading at higher valuations relative to the S&P 500 Index (IVV) (SPY) (VOO) and the Dow Jones Industrial Average (DIA).

Colgate’s (CL) Africa/Eurasia segment’s net revenue decreased 9.1% to $0.2 billion in 1Q16.

Altria Group’s (MO) 1Q16 gross margin rose to 58.6% compared to 57.9% in 1Q15. The rise resulted from higher pricing.

Altria Group’s (MO) smokeless tobacco product segment’s net revenue rose 11.4% in 1Q16 to $0.5 billion versus $0.4 billion in 1Q15.

Altria Group’s (MO) wine segment’s 1Q16 net revenue rose 8.2% to $0.15 billion compared to $0.13 billion in 1Q15.

Altria Group’s (MO) smokeable product segment’s net revenue rose 3.8% to $5.4 billion in 1Q16 compared to $5.2 billion in 1Q15.

After missing revenue expectations last quarter, Altria came in ahead of analysts’ estimates in 1Q16. Analysts had projected revenue of $4.4 billion.

Altria Group (MO) released its 1Q16 earnings on April 28, 2016. Its adjusted diluted EPS (earnings per share) rose 14.3% to $0.72 in 1Q16.

P&G reported a gross profit margin increase of 250 basis points to 49.8% in fiscal 3Q16, as compared to fiscal 3Q15.

Net revenue from P&G’s Baby, Feminine, and Family Care segment came in at $4.5 billion in fiscal 3Q16. This was 7.9% lower than in fiscal 3Q15.

Net revenues from P&G’s Grooming segment in fiscal 3Q16 came in at $1.6 billion. But the segment’s net sales were 9.9% lower than in fiscal 3Q15.

P&G’s Beauty, Hair, and Personal Care segment’s organic sales increased by 1% in fiscal 3Q16 due to the positive impact of pricing.

Coty is trading at a higher valuation relative to the S&P 500 Index and the Dow Jones Industrial Average. Coty is trading at a forward PE multiple of 30.3x.

Coty was trading at $29.80 on April 25, 2016. Its stock price has risen 45.9% since January 2, 2015, and 19.3% year-to-date.

Coty’s fiscal 3Q16 earnings will be announced on May 3, 2016. Analysts’ consensus estimate for adjusted diluted EPS in fiscal 3Q16 is $0.12 per share.

Gross margin and free cash flow Philip Morris’s (PM) gross margin decreased 0.7 points to 65.5% in 1Q16, compared to 66.3% in 1Q15. Despite the adverse currency impact, Philip Morris is focused on generating strong free cash flow in line with last year’s level. The company’s free cash flow (or FCF) increased by more than […]

Net revenue for Philip Morris’s (PM) Asia region decreased 8.7% to ~$2 billion in 1Q16. This compares to $2.2 billion in 1Q15.

PM’s increase in revenue on a constant currency basis was primarily due to favorable pricing of $0.1 billion, driven by Russia and Turkey, and partially offset by Ukraine.

Philip Morris’s cigarette market share increased by 0.6 points to 38.7%, with gains notably in France, Germany, Poland, and Spain.

Philip Morris International (PM) released its 1Q16 earnings on April 19, 2016. The company’s adjusted diluted EPS fell 15.5% to $0.98 compared to $1.15 in 1Q15.

Colgate-Palmolive (CL) and Clorox (CLX) are trading at a higher valuation relative to the S&P 500 Index (IVV) (SPY) (VOO) and the Dow Jones Industrial Average (DIA).

Colgate stock has been volatile since the beginning of 2015. It fell almost 12.6% to $60.37 on August 25, 2015, from $69.08 on August 5, 2015.

Colgate said it will continue to raise prices in moderation in emerging markets to counter unfavorable foreign exchange and protect its margins.

Colgate-Palmolive (CL) is geographically diverse and derives 77% of its total revenue from outside the United States.

During 4Q15, Colgate announced it will no longer include the results of its Venezuelan operations in its consolidated financial statements. This will impact diluted EPS in 2016.

Procter & Gamble (PG) reported a slight improvement in its core gross margin in 2Q16. Its reported gross profit margin increased 170 basis points that quarter.

Since December 2015, FX (foreign exchange) headwinds have increased $0.3 billion after tax. That includes devaluations in Argentina, Russia, and Mexico.

Excluding the impact of negative foreign currencies, P&G’s core earnings increased in fiscal 2Q16. Diluted net EPS also increased, primarily driven by non-cash impairment charges.

Procter & Gamble (PG) is set to release its fiscal 3Q16 earnings before the Markets open on April 26, 2016. In fiscal 2Q16, P&G missed revenue estimates for the fifth consecutive quarter.

As of April 6, Philip Morris and Altria were trading at higher valuations relative to the S&P 500 Index and the Dow Jones Industrial Average.

Colgate is adding the greatest number of new shoppers among fast-moving consumer goods companies. Most are in India.

In Brazil, 70% of women are in the range of 18–49 years old, and Colgate has a lower CPM (cost per thousand) than TV for this group—60% of the cost.

Colgate-Palmolive’s global market share is ~45%. It is the leading toothpaste compared to Oral-B and Close-up, especially in emerging markets like India.

Colgate-Palmolive’s (CL) Hill’s business has been organically growing mid-single digits consistently, due to Hill’s innovation pipeline.

Colgate continues to put an enormous emphasis on gross margin. The company is also working hard to put down overhead costs as a percentage of sales.

Ian Cook has run Colgate-Palmolive for nine years and is expected to step down in five years. P. Justin Skala and Noel R. Wallace will assume CFO roles.

With the lawsuit filed against P&G’s Old Spice, margins could contract in the coming quarter as revenue would be affected.

After a lawsuit was filed against Procter & Gamble (PG), or P&G, for its Old Spice deodorant, P&G’s stock price opened with a fall of 0.4% to $82.46 on March 24, 2016.