We have Sweetgreen at home

The Olympics are over, but a lifetime supply of noodles lasts forever. A gymnast who won two golds for the Philippines has been offered unusual prizes, like endless mac and cheese, a house, wedding photography, fog lights, and free colonoscopies.

Don’t call it a comeback: the S&P 500 and Nasdaq sealed a six-day win streak yesterday after news that US retail sales popped 1% in July —about 3x more than expected.

😎 Risky quizness: Test how well you know the latest business news by taking this week’s Snacks Seven quiz. Try the first Q:

Overflowing cart… of half-priced paper towels. Walmart shares jumped 7% yesterday after the world's largest retailer unloaded an earnings beat. Its revenue grew 5% to $169B last quarter as its global ecomm sales jumped 20%. Walmart said higher-income customers accounted for most of its new customer gains as shoppers traded down. Even after rolling out price cuts and summer sales events, Walmart boosted its annual profit and sales forecast, signaling demand is strong. Merch sales (think: air fryers, sun dresses) rose for the first time in 11 quarters — a good omen for consumer spending.

“We’ve got Chipotle at home”… Even after annual inflation hit its slowest pace in three years, food prices have stayed high, especially at restaurants. While US grocery prices are up 1% year over year, restaurant prices have popped 4%. As folks opt to save $$ by cooking at home, discount retailers are in a sweet spot. Walmart’s dominated in groceries — which make up over half of its US sales — capturing a record 37% of online grocery sales in Q2. Rivals like Target and Aldi have cut prices to keep up (FYI: Target reports on Wednesday). Meantime, chains like McDonald’s and Starbucks have been pushing “value” with promos as their sales fall.

It pays to have the right price… As inflation eats into budgets, shoppers want more bang for their buck. Picture: buying Keurig pods in bulk versus a $6 Starbs cold brew. Walmart’s prices are estimated to be ~25% lower than traditional supermarkets, giving it an edge over grocery rivals. As consumers prioritize value, discount retailers appear poised to thrive.

Oh Deere… Deere’s quarterly earnings showed that the world’s largest farm-equipment manufacturer has a cornucopia of problems. Sagging demand for its green-and-yellow tractors plowed into sales, which fell 17%. Profit plunged 42%. Still, the drop was less than analysts expected, and Deere stuck with its annual profit forecast. The stock popped 6% yesterday (its biggest daily gain in over a year). It’s been a bumpy road for the company.

Not bringing home the bacon… The USDA forecast that this year farms will rake in $116B, down 27% from last year and down 41% from 2022. That’s the biggest two-year decline in over four decades. Corn prices fell to below $4/bushel in July, marking a 37% drop from last summer’s peak. Seed and chemical costs have spiked, and intense heat waves and droughts have damaged crops and livestock. All these problems have hurt farmers’ ability to invest in shiny new equipment from companies like Deere.

Cost cuts are investors favorite “cover crop”… Deere’s profit-pumping moves (layoffs, higher prices) could help offset slowing sales and cratering earnings. Investors have cheered similar measures from other companies. But companies can’t cut costs forever, and like cover crops, those moves can’t be harvested for long-term growth.

📜 Policy… Crypto insiders and Democratic lawmakers gathered Wednesday for a digital “Crypto4Harris” town hall. As many in crypto embrace former Prez Trump, the group argued that a President Harris would be good for the digital-assets industry.

🤔 Sus… The SEC sued crypto co NovaTech, alleging its founders fraudulently raised $650M+ from 200K investors. The biz promoted itself as a crypto-investment operation, but regulators called it a pyramid scheme that targeted Haitian Creole-speaking churchgoers.

🌶️ Spicy… Some traders are sick of the deluge of new meme coins after Pump.fun made it free to launch solana-based coins. As of Saturday, users had created 1.7M meme coins with the platform. Only 41 have maintained a $1M market cap.

Millennials who want to buy homes face an uphill battle. Their boomer parents have $76 trillion in wealth. You do the math. Read More.

July had the highest global temperatures on record

Authors of this Snacks own shares of: Alphabet, Apple, Starbucks, and Walmart

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