Latest / What the Flux / IGA vs Tobacconists | Aussies fuel KFC profit zing[er] | Shopify tanks after Cyber Monday outage

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IGA vs Tobacconists | Aussies fuel KFC profit zing[er] | Shopify tanks after Cyber Monday outage · What the Flux

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  Speaker 1: This is what the Flux. I'm Brett and I'm Justin
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  Speaker 1: and it's Wednesday, the third of December. The numbers are in.
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  Speaker 2: Juzzie Boy, it pays to love teeth. Get this one.
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  Speaker 2: The medium first year salary for UNIQUE graduates has been
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  Speaker 2: released and dentists came out on top. First year dentists
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  Speaker 2: earned a median salary of one hundred and three thousand
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  Speaker 2: dollars on two twenty four. Those in medicine AE doctors
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  Speaker 2: came in second, within median salary of eighty seven thousand.
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  Speaker 2: For those who studied Justice and Policing came in shortly
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  Speaker 2: after that at eighty two and a half hours.
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  Speaker 1: Justice and Policing coming up the ranks. Here they come,
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  Speaker 1: fox Am. As we roll over into December, that means
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  Speaker 1: we get to review the top performing ASX listed companies
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  Speaker 1: for November. We've done a big breakdown in the Flux
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  Speaker 1: out showing you who performed the best and who might
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  Speaker 1: not have performed as well. There are some very interesting
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  Speaker 1: companies in there. See If you want to see which
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  Speaker 1: ASEX two hundred companies perform the best in November, make
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  Speaker 1: sure to download the Flux app and check it out.
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  Speaker 2: Three revolutionary stories today. Juzzy boy, let's do it for
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  Speaker 2: our first metsh has seen it shares fall more than
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  Speaker 2: nine percent after illegal tobacco caused a three hundred and
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  Speaker 2: forty five million dollar knock on their sale.
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  Speaker 1: Talk about a smoke show, b man, what is going
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  Speaker 1: on here? So?
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  Speaker 2: Met cash is the wholesaler behind many independent retailers.
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  Speaker 1: IgA and Foodland Mity ten total tools.
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  Speaker 2: In fact, metcash supplies more than ten thousand independent retailers
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  Speaker 2: across Australia.
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  Speaker 1: And the man. Despite metcash trying to battle head to
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  Speaker 1: head against your woolies and coals in the supermarket battle,
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  Speaker 1: it's not doing too bad on the food sale side, yep.
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  Speaker 2: For the first half, total food sales increased over seven
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  Speaker 2: percent to four and a half billion bucks excluding tobacco.
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  Speaker 1: Sorry, what did you say that?
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  Speaker 2: I said excluding tobacco? Go on, well, dozy boy. Metcash
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  Speaker 2: revealed it illegal tobacco caused a three hundred and forty
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  Speaker 2: five million dollar hole in its revenue in just six months.
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  Speaker 1: Wow. So, despite strong food sales outside tobacco, Metcash's overall
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  Speaker 1: profit slipped five point nine percent and.
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  Speaker 2: Shares dropped more than nine percent Following this big news because.
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  Speaker 1: The man shoppers haven't stopped smoking, They've just stopped buying
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  Speaker 1: the legal stuff.
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  Speaker 2: They've just substituted from a legal way to buy cigarettes
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  Speaker 2: to an illegal way.
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  Speaker 1: So what is the key learning here?
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  Speaker 2: Illicit market substitution happens when consumers shift from regulated and
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  Speaker 2: taxed goods to the cheaper and under the counter alternatives.
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  Speaker 1: And they man in categories with high government taxes, like tobacco.
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  Speaker 1: The price gap between legal and illegal products can be enormous.
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  Speaker 2: A quick example, a legal pack of cigarettes costs up
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  Speaker 2: to fifty dollars now, while illegal cigarettes can cost as
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  Speaker 2: little as fifteen bakkarnis.
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  Speaker 1: So while the demand remains steady or even grows, the
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  Speaker 1: revenue has shifted yeap. Instead of being captured by legitimate businesses,
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  Speaker 1: it's drifting into the pockets of the smoked filled criminal suppliers.
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  Speaker 1: And it ain't just met cash missing out. The government
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  Speaker 1: is supposedly losing three point three billion dollars per year
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  Speaker 1: in lost tobacco tax revenue.
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  Speaker 2: And clearly investors have realized that metcash can't rely on
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  Speaker 2: tobacco anymore as a reliable source of revenue.
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  Speaker 1: So it's no surprise that Metcash's share price was whacked for.
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  Speaker 2: Our second story, The owner of KFC Australia store has
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  Speaker 2: upgraded its full year profit guidance after Australians get stuck
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  Speaker 2: into some zinger burgers.
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  Speaker 1: Nothing like a zinger barn me to get investors clucking
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  Speaker 1: with excitement. B man, so tell me more so.
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  Speaker 2: Colin's Foods is the asxisted at a restaurant operator.
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  Speaker 1: We're talking the operator of nearly three hundred and fifty
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  Speaker 1: KFC franchises across Australia and Germany and the Netherlands.
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  Speaker 2: As well as more than twenty five taco bells to
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  Speaker 2: Juzzy Boy, you always forget the taco bells really good
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  Speaker 2: for when you need a little break from the Colonel's
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  Speaker 2: fried goodness.
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  Speaker 1: Yeah, and the man Colin's Food got investors very perky
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  Speaker 1: after revealing its half year results. We're talking profit jumping
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  Speaker 1: nearly thirteen percent to over twenty seven million.
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  Speaker 2: Bucks and its revenue is up over six percent as well.
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  Speaker 2: All right, hit me with the winning combos, Juzzy Boy,
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  Speaker 2: no model man.
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  Speaker 1: KFC is getting a little bit cultured at the moment
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  Speaker 1: with its zinger barn me and it's zinger Kebat.
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  Speaker 2: And Juzy Boy. Now KFC's owner has upgraded its full
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  Speaker 2: year profit guidance to mid to high teen growth.
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  Speaker 1: And b Man Colin's Food ain't just expanding its chicken empire.
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  Speaker 1: It's selling more chicken in every store too, Is that right?
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  Speaker 2: So what's the key learning here?
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  Speaker 1: Same store sales measure the performance of restaurants against the
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  Speaker 1: same store last year, and.
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  Speaker 2: It's one of the most important indicators for a franchise.
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  Speaker 1: Or it shows whether a brand is actually growing with
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  Speaker 1: customers or just expanding its footprint.
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  Speaker 2: Now, this metric strips out the effect of new store openings,
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  Speaker 2: so be man, it gives investors a cleaner look at
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  Speaker 2: the underlying health of the actual business. For example, positive
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  Speaker 2: same store sales suggest stronger demand for those barn meazingers
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  Speaker 2: and just singers in general, and.
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  Speaker 1: In Colin's Foods case, Australian same store sales roast three
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  Speaker 1: point six percent and as for Germany, same store sales
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  Speaker 1: increased five and a half percent. And this points to
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  Speaker 1: what I believe economists call chicken mania. Yeap.
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  Speaker 2: So as the cost of living bites, KFC and its
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  Speaker 2: new products are becoming an affordable way to eat fast food.
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  Speaker 1: And investors are loving this growth.
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  Speaker 2: For our third and final story, Shopify, so it shares
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  Speaker 2: plummet five percent after it suffered major outages on Cyber Monday.
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  Speaker 1: Not on the biggest day of the shopping year, tell
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  Speaker 1: me more so.
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  Speaker 2: Shopify is the Canadian e commerce platform that has grown
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  Speaker 2: into a megabehemoth.
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  Speaker 1: Yep. It was founded in two thousand and six and
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  Speaker 1: now it powers more than one point seven million merchants globally.
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  Speaker 2: And Black Friday and Cyber Monday Juzy Boy, they are
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  Speaker 2: Shopify's Olympics.
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  Speaker 1: But then man, this year, Shopify hit quite a bit
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  Speaker 1: of a snag, a pretty sizable snag in fact, YEP.
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  Speaker 2: At eleven am on Cyber Monday, New York Time, more
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  Speaker 2: than four thousand users reported outages.
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  Speaker 1: Merchants were unable to log into their admin dashboards, all
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  Speaker 1: their point of sale systems, and jugy Boy.
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  Speaker 2: This clitch even impacted checkouts for some merchants.
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  Speaker 1: Now, shopif says the issue has now been fixed and
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  Speaker 1: the systems are recovering, but the timing could not have
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  Speaker 1: been worse.
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  Speaker 2: Neck minute, shopify share price dropped five percent as investors
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  Speaker 2: really questioned Shopify's reliability on the biggest day.
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  Speaker 1: Of the year. So what is the key learning here?
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  Speaker 2: In e commerce? Reliability isn't just a feature, it's the
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  Speaker 2: whole product.
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  Speaker 1: On a normal day, downtime is annoying, but on Cyber
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  Speaker 1: Monday it is catastrophic.
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  Speaker 2: Merchants lose sales and customers bounce.
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  Speaker 1: And on top of that, platform like Shopify, risk damaging
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  Speaker 1: the trust that they've spent years building.
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  Speaker 2: A bit of perspective for you, Josey boy, just sit
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  Speaker 2: there and listen to this. One last year, Shopify merchants
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  Speaker 2: recorded eleven and a half billion dollars USD. Might I
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  Speaker 2: add in sales for the three day period of Black
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  Speaker 2: Friday and Cyber Monday.
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  Speaker 1: Yeah, more than seventy six million customers brought from businesses
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  Speaker 1: powered by Shopify over these days.
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  Speaker 2: So even four hours of outages could cost merchants hundreds
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  Speaker 2: of millions of dollars in lost sales.
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  Speaker 1: And when you're supporting millions of transactions every hour, small
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  Speaker 1: cracks can turn into big, big issues.
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  Speaker 2: And for Shopify, clearly these more cracks cost its merchants.
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  Speaker 1: But it also costs them because it whacked their share
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  Speaker 1: price by more than five percent. Bucks am If you
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  Speaker 1: want to know the winners, on the ASX two hundred
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  Speaker 1: in the month of November. We have it all covered
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  Speaker 1: in the Flux app the top performing stocks. Make sure
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  Speaker 1: to download the Flux app and check out our latest article.
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  Speaker 2: Thanks for listening and we'll see you on Friday.