🚀 Target falls 15% on poor guidance

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Market Overview
Read time 1.4 minutes

Year To Date Performances:

1. Target's stock plummeted over 15% after missing earnings expectations, marking its biggest miss in two years, and slashing its full-year profit guidance amid lacklustre sales and cautious consumer spending. Despite slashing prices on over 10,000 items in 2024 to entice shoppers, the retailer only achieved a 0.3% uptick in comparable sales, falling short of analyst projections. Meanwhile, competitors like Walmart reported stronger discretionary sales and gains with affluent customers. Target attributed its struggles to "lingering softness" in non-essential categories and costly supply chain adjustments ahead of a brief port strike, though digital sales and beauty items provided some relief.

2. Delta Air Lines projects mid-single-digit revenue growth for 2025, aligning with analyst expectations, and plans a modest 3-4% capacity increase. Leveraging strong demand for premium services and a lucrative partnership with American Express, Delta attributes its success to targeting affluent households and growing Gen Z and millennial segments. Notably, 57% of its revenue now comes from premium seats and loyalty programs, a sharp shift from its 2010 reliance on main cabin sales. Despite United Airlines' 128% share surge this year, Delta maintains a competitive edge as the most profitable U.S. airline while exploring new cabin segmentation strategies.

3. Belgium-based Odoo, known for its open-source enterprise resource planning software, reached a valuation of €5 billion ($5.3 billion) following a secondary share round led by Alphabet’s CapitalG and Sequoia Capital. CEO Fabien Pinckaers highlighted Odoo's 50% year-over-year growth, cash profitability, and focus on providing affordable, user-friendly tools for small businesses in a fragmented ERP market dominated by complex, costly solutions like SAP. With billings of €370 million in 2023, Odoo aims for €1 billion by 2027. Despite its IPO-ready scale, the company prefers long-term private investment, maintaining its bootstrapped ethos and flexibility.

4. Headlines

   1. Comcast will spin off its cable networks in including CNBC, MSNBC, E!, Syfy, Golf Channel, USA and Oxygen into their own publicly listed company next year.

   2. TJ Maxx is reporting that there is already a stronger start to this year's holiday shopping season than in past years.

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Amazon Bets Big on Smart Homes, You Can Too

VCs know how difficult it is to spot promising early investment opportunities. Even the Sharks from Shark Tank declined the offer to buy 10% of Ring for $700,000 - a decision they would regret when Amazon acquired Ring, turning the $700,000 into $10M!

RYSE is the smart-home brand poised to follow a similar trajectory. The founder pitched on Canada’s version of Shark Tank, Dragons’ Den and received two offers - it seems the Dragons’ learned from the Sharks’ mistakes. Don’t make the same mistake the sharks did.

Invest now.

Onwards and Upwards,

Liam Gill