Diamonds and Dogs

3/8/19

Costco (COST) bucking the trend. The wholesale box retailer is up 5% to a three month high following earnings. Costco beat by 32 cents as revenue rose 7.3% to $35.4 billion. February comps were 3.5% and comparable sales growth rose 6.7%. E-commerce sales surge 25.5% to start the year. Most of Costco's online sales strength came from its loyalty rewards program. Membership fees revenue grew 7.2% year-over-year.

No holding back at National Beverage (FIZZ). The waters, juices, energy drinks, and carbonated soft drinks maker is down 16% today and down over 50% in the last six months. Last night the company missed earnings estimates by 22 cents as sales fell to 2.9% to $221 million, well below expectations. The CEO did not hold back in the conference call. The CEO stated he was truly sorry for the results. Negligence nor mismanagement nor woeful acts of God were the reasons for the bad earnings. The bad earnings were the result of injustice! Managing a brand is not so different from caring for someone who becomes handicapped. Brands do not see or hear, so they are at the mercy of their owners or care providers who must preserve the dignity and special character that the brand exemplifies. It is important that LaCroix's true character is not devalued intentionally - in any way. National Beverage Corp. is and will remain the preeminent innovator that adds zest and authenticity to the 'sparkling water' phenomenon in North America. I can't wait to hear the next quarterly results.