Monday, January 19, 2015

Week's Winners and Losers: Tough Sell for Some Gadgets

3dsystems.com3D Systems made these sugar cubes with a 3-D printer There were plenty of winners and losers this week, with a leading toy maker posting strong growth across its product lines and one of this year's most hyped smartphone rollouts struggling to connect with consumers. Here's a rundown of the week's smartest moves and biggest blunders. Fire Phone -- Loser It has been widely assumed that Amazon.com (AMZN) hasn't gained a lot of traction with its first foray into proprietary smartphones, but now we have confirmation directly from the leading online retailer. Amazon took a $170 million accounting hit on Thursday to write down the value of its Fire Phone inventory and supplier commitment costs. Amazon isn't ready to throw in the towel on the smartphone, but it clearly miscalculated in a big way by not pricing it more aggressively. It may not have much of a choice now. Chipotle Mexican Grill (CMG) -- Winner The restaurant industry's market darling lived up to the hype with another blowout quarter. Revenue and earnings climbed 31 percent and 56 percent, respectively, over the prior year. The most stunning nugget in Chipotle's report is that comparable-restaurant sales soared 19.8 percent during the quarter. Yes, the average Chipotle rang up 19.8 percent more in sales than it did during last year's third quarter. A springtime menu price increase has helped spice up sales, but Chipotle continues to be a fast-casual rock star. The stock did disappoint the market by initiating a lackluster outlook for 2015. That was enough to find the bears outnumbering the bulls. However, it's hard to generate a nearly 20 percent spike in store-level comps without being called a winner. 3D Systems (DDD) -- Loser 3-D printing may be one of the coolest technologies to arise in years, but consumer adoption has been slow. Printing physical objects sounds cool -- and there are plenty of consumer and industrial applications -- but the high prices of printers have kept 3-D printing from cracking the mainstream market. 3D Systems is a leader in 3-D printing, but lately the leader has been a bleeder. 3D Systems has shed nearly 60 percent of its value this year. Its latest tumble came on Wednesday after it announced preliminary third-quarter results that show sales and profitability falling short of expectations. 3D Systems blames the shortfall on delays in new consumer printers and weak sales of its metal printers. If you ever see a 3-D printer in action, you'll come to appreciate the potential of printing out everything from figurines to medical products. However, until the printers get cheaper and, ideally, faster, the revolution will be slow in coming around. Hasbro (HAS) -- Winner Traditional toys aren't dead just yet. Hasbro kicked off the week with a better-than-expected quarterly report. Revenue moved higher after Hasbro posted top-line gains in all seven of its leading toy franchises. Hasbro's strong report came a trading day after rival Mattel (MAT) missed Wall Street's profit target. Mattel has come up short on the bottom line every single quarter over the past year. Hasbro is clearly getting the better of its longtime rival. Sears Holdings (SHLD) -- Loser Things are going from bad to worse at Sears Holdings. The parent company of Kmart and Sears is closing more of its fading department stores. Sears said that at least 5,457 employees will be let go as the struggling retailer will close 46 Kmart, 30 Sears and 31 Sears Auto Centers. Sears Holdings has already closed nearly 100 stores this year. The carnage continues, but the real problem is that the company won't make the necessary investments to update its remaining stores -- 1,077 Kmart stores and 793 Sears stores in the United States as of Aug. 2 -- to make them relevant to modern shoppers. More from Rick Aristotle Munarriz
•As Multiplexes Slump, IMAX Thinks Big, and Grows Bigger •If Everybody Hates Yelp, Why Is It Still Growing? •Halloween Is Raking in Scary Profits for Theme Parks

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