Latest / What the Flux / Woolworths' e-commerce issues | Apple's got a problem | Meta’s doubling down on AI

Transcript

Woolworths' e-commerce issues | Apple's got a problem | Meta’s doubling down on AI · What the Flux

• 0:05
  Speaker 1: This is what they flugs. I'm Brett and I'm justin.
• 0:08
  Speaker 1: As Monday, the fourth of November, new information has come
• 0:10
  Speaker 1: out Judy Boy via the ato's Tax Transparency Report. Get
• 0:14
  Speaker 1: this little one, three thousand, nine hundred and eighty five
• 0:17
  Speaker 1: entities that lodged tax returns in twenty twenty two to
• 0:20
  Speaker 1: twenty twenty three did not pay tax. There were a
• 0:23
  Speaker 1: number of reasons like tax offsets accounting uses, but it
• 0:26
  Speaker 1: all is also due to global profit shifting for some
• 0:30
  Speaker 1: big companies, not the ranking at you big tech companies.
• 0:34
  Speaker 2: Black fam As we kick off the new month, we're
• 0:36
  Speaker 2: very excited to launch our latest course in the Academy,
• 0:38
  Speaker 2: getting savvy with buying a property. Getting into the property
• 0:41
  Speaker 2: market can feel as complicated as learning how would you
• 0:44
  Speaker 2: break equations? So we've covered the ins and outs of
• 0:46
  Speaker 2: buying a property, including some hot hips. What to look
• 0:49
  Speaker 2: out for in the next six months.
• 0:50
  Speaker 1: Three highly beneficial stories today Jusy Boy, Let's do it
• 0:53
  Speaker 1: for our first. Woolworths has warned its investors that earnings
• 0:57
  Speaker 1: for the six months to December are looking likely to
• 0:59
  Speaker 1: be five percent below last year's results.
• 1:03
  Speaker 2: Not the ideal. First impression for Willie's new CEO, then
• 1:06
  Speaker 2: tell me what's going on here?
• 1:07
  Speaker 1: So juzy boy. We all know woo Works formerly the
• 1:09
  Speaker 1: Fresh Food People, formerly Safe Way.
• 1:12
  Speaker 2: Yeah, they're the biggest supermarket in Australia with roughly thirty
• 1:15
  Speaker 2: seven percent market.
• 1:16
  Speaker 1: Share, ahead of Coals with twenty eight percent market share.
• 1:19
  Speaker 2: And be Man Let's be honest. Willie has had a
• 1:21
  Speaker 2: loft to deal with over the past year.
• 1:23
  Speaker 1: Yep, between losing their reputation is the second most trusted
• 1:26
  Speaker 1: brand in Australia down to number thirty four.
• 1:28
  Speaker 2: Then the XEO resigned early after a bit of a
• 1:31
  Speaker 2: media bungle.
• 1:32
  Speaker 1: And there have been extensive inquiries into its price gouging
• 1:34
  Speaker 1: of customers by government committees.
• 1:36
  Speaker 2: But now be Man Woolly's new CEO has warned that
• 1:39
  Speaker 2: its earnings before interest in tax or it's EBERT for
• 1:41
  Speaker 2: the six months to December is expected to be down
• 1:44
  Speaker 2: down and.
• 1:45
  Speaker 1: Not in the Coals down down good kind of way,
• 1:48
  Speaker 1: Juzzy boy, Nope, Woolli's EBIT is expected to drop five
• 1:51
  Speaker 1: point six percent below last year's one point six billion
• 1:54
  Speaker 1: dollars and doze boit Woolies has been forced to discount
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  Speaker 1: its goodies.
• 1:58
  Speaker 2: But interestingly, the growth of its e commerce business has
• 2:01
  Speaker 2: also been a key reason for its e bit struggling.
• 2:04
  Speaker 1: Interesting, so what is the key learning here?
• 2:06
  Speaker 2: When companies pursue new initiatives, they can unleash hidden costs
• 2:09
  Speaker 2: that come back to buys.
• 2:11
  Speaker 1: Yep, Woolies has done a really good job growing its
• 2:14
  Speaker 1: e commerce sales.
• 2:15
  Speaker 2: In the most recent quarter, it greuba over twenty three percent.
• 2:17
  Speaker 1: Meaning e commerce now accounts for fourteen and a half
• 2:20
  Speaker 1: percent of all of its sales. Sounds pretty good to me,
• 2:22
  Speaker 1: b man, it does sound pretty good. But here's the problem,
• 2:25
  Speaker 1: O Juzzy boy e commoce sales are less profitable than
• 2:28
  Speaker 1: those in physical supermarkets. How about that?
• 2:30
  Speaker 2: Yeah, for Woollies, they need to pick the stock, they
• 2:31
  Speaker 2: need to pack the stock, and they need to dispatch
• 2:33
  Speaker 2: it vir its logistics.
• 2:34
  Speaker 1: Are and that is a lot more expensive than having
• 2:36
  Speaker 1: a customer rock up to the shop and b.
• 2:38
  Speaker 2: Man, this is part of the reason. Why will the
• 2:40
  Speaker 2: share price drop more than six percent after the news?
• 2:43
  Speaker 1: For our second story, Apple has seen its quarterly sales
• 2:46
  Speaker 1: jump five percent after investors got their first peak on
• 2:50
  Speaker 1: how its iPhone sixteen sales are fairy.
• 2:52
  Speaker 2: Surely every person is just buying the iPhone sixteen to
• 2:55
  Speaker 2: get rid of sire.
• 2:56
  Speaker 1: So tell me what well, Apple needs zero introduction three
• 2:59
  Speaker 1: point five for trillion US dollar company.
• 3:02
  Speaker 2: Fair to say, value is around the same as the
• 3:04
  Speaker 2: annual GDP of India, a COFU with nearly one point
• 3:07
  Speaker 2: five billion people and juzzyboy.
• 3:09
  Speaker 1: Apple released its new iPhone sixteen in the US in
• 3:11
  Speaker 1: late September, but it's Apple Intelligence features still haven't been
• 3:15
  Speaker 1: rolled out.
• 3:15
  Speaker 2: And now, b Man. Apples announced that its revenue was
• 3:17
  Speaker 2: up six percent year over year to nearly ninety five
• 3:20
  Speaker 2: billion US dollars.
• 3:22
  Speaker 1: And juzbay overall iPhone revenue jumped six percent, So it
• 3:25
  Speaker 1: seems like iPhone nerds are chueuing up big time here.
• 3:29
  Speaker 2: Slow down there, b Man, because despite all the backslabs
• 3:31
  Speaker 2: and the high fives around these results, Apple still needs
• 3:34
  Speaker 2: to take stock and look in its rearview mirror.
• 3:36
  Speaker 1: I feel like you're alluding to something here. Why is that?
• 3:39
  Speaker 2: Well, it's because Apple services business, which generated nearly twenty
• 3:42
  Speaker 2: five billion US dollars, is facing some pretty big challenges
• 3:45
  Speaker 2: right now.
• 3:46
  Speaker 1: Yep, Disney has joined Netflix and they're Spotify as well.
• 3:49
  Speaker 1: They're all skipping the App Store when it comes to
• 3:51
  Speaker 1: their own new subscriptions.
• 3:53
  Speaker 2: And They're pushing customers to sign up directly through their
• 3:55
  Speaker 2: website to avoid the thirty percent commission that Apple charges
• 3:58
  Speaker 2: in the app Store's war juzzy boys.
• 4:01
  Speaker 1: So what is the key learning here?
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  Speaker 2: Not all revenue streams are created equally.
• 4:04
  Speaker 1: Good news for Apple that it's seen a growth in
• 4:06
  Speaker 1: its iPhones recently, but.
• 4:08
  Speaker 2: Its services division is what a lot of Apple investors
• 4:11
  Speaker 2: are currently drawn to and excited by.
• 4:12
  Speaker 1: That's, of course, the division that includes revenue from Apple
• 4:15
  Speaker 1: TV plus iCloud, and of course the App Store.
• 4:18
  Speaker 2: In fact, the man Apple's gross margin for its services
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  Speaker 2: business this quarter was seventy four percent.
• 4:23
  Speaker 1: And Judy boy, don't followf your chair over there. That's
• 4:25
  Speaker 1: almost double the approx. Forty percent margin for all of
• 4:28
  Speaker 1: Apple's hardware products.
• 4:29
  Speaker 2: And that's why Apple's been pushing services hard for that
• 4:32
  Speaker 2: particular reason.
• 4:33
  Speaker 1: Here's the thing. As companies like Netflix and Disney, they
• 4:35
  Speaker 1: funnel users elsewhere. Apple services revenue has just started to
• 4:39
  Speaker 1: slow down.
• 4:40
  Speaker 2: In fact, its services revenue was behind its forecast for
• 4:43
  Speaker 2: the last quarter.
• 4:44
  Speaker 1: So despite these positive results, Apple investors will be keeping
• 4:46
  Speaker 1: a very close eye on this one.
• 4:49
  Speaker 2: For our third and final story, Meta shares have dropped
• 4:52
  Speaker 2: four percent after its quarterly update warned that AI investments
• 4:55
  Speaker 2: were expected to ramp up.
• 4:57
  Speaker 1: Half bought, half man Zuckerberg has clearly not made investors happy.
• 5:02
  Speaker 1: What is going on?
• 5:03
  Speaker 2: We no mata as the massive tech company that's behind
• 5:06
  Speaker 2: some of the bigger social media platforms. Your facebooks, your Instagram's,
• 5:09
  Speaker 2: You're WhatsApps.
• 5:10
  Speaker 1: Do not forget threads, juzzy boy man.
• 5:12
  Speaker 2: It hard to imagine b Man. This one point four
• 5:14
  Speaker 2: trillion US dollar company started as an online student directory.
• 5:18
  Speaker 1: And twenty years later, it's trying to replace smartphones with
• 5:20
  Speaker 1: the metaverse.
• 5:22
  Speaker 2: And now b man. Metas announced its quarterly results of
• 5:24
  Speaker 2: just over forty billion US dollars in sales or a
• 5:27
  Speaker 2: nineteen percent increase your own year, which was way more
• 5:31
  Speaker 2: than investors had expected, but as daily active users only
• 5:33
  Speaker 2: increased by five percent, which was less than investors were
• 5:36
  Speaker 2: hoping for, and as a result, Metas shares actually dropped
• 5:39
  Speaker 2: over four percent and be Man. On top of these results,
• 5:41
  Speaker 2: Meta also announced that spending on its AI and its
• 5:44
  Speaker 2: metaverse is going to ramp.
• 5:45
  Speaker 1: Up, and half man, half bot Zuckerberg gave serious airtime
• 5:49
  Speaker 1: to the positive outcomes from its investments in AI.
• 5:51
  Speaker 2: So what is the key learning here.
• 5:53
  Speaker 1: Highlighting success stories is a key way in which companies
• 5:56
  Speaker 1: justify investments to the share market.
• 5:58
  Speaker 2: One thing that's stuck out in metas quarterly update was
• 6:00
  Speaker 2: the amount of airtime that it gave to how AI
• 6:03
  Speaker 2: investments have performed so far.
• 6:04
  Speaker 1: They claim Meta Ai was on track to be the
• 6:06
  Speaker 1: most used AI assistant in the universe, with over five
• 6:10
  Speaker 1: hundred million monthly active users.
• 6:12
  Speaker 2: It seems like a bit of a stretch to me
• 6:13
  Speaker 2: and b Man. Beta also claim that AI driven recommendations
• 6:16
  Speaker 2: have led to an increasing time spent on Facebook and Instagram.
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  Speaker 1: Sounds like Metas buttering up investors with these AI success stories.
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  Speaker 2: Definitely does b Man, especially given that Meta's capital expenditure
• 6:26
  Speaker 2: could reach up to fifty billion US dollars in twenty
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  Speaker 2: twenty five.
• 6:29
  Speaker 1: So if investors are going to see billion spent on
• 6:31
  Speaker 1: non core business investments, you can bet they'll want to
• 6:34
  Speaker 1: see payoffs sooner rather than later.
• 6:36
  Speaker 2: Flox Am if you're looking to buy properties at six
• 6:39
  Speaker 2: twelve months or you've currently got a property, the Flux
• 6:41
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• 6:50
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• 6:52
  Speaker 2: this month. Thanks for listening and it would set you
• 6:54
  Speaker 2: on Wednesday,