📦 UPS’ reverse delivery

Ordering five pairs of shoes… only keepin’ one. UPS is doubling down on returns. The mega shipper said yesterday that it was buying Happy Returns, a “reverse logistics” company purchased by PayPal in 2021. Happy Returns specializes in label-free, box-free returns (picture: just dropping off jeans at the counter). UPS said that after the deal closes this quarter, the simplified-return service will be available at 12K+ locations. 

• Happy Returns said it saves merchants as much as 40% on return costs like shipping, restocking, and junking (partly) by batching returns.

• Lotsa orders, one return… If thousands of fans return their newly purchased Philadelphia Phillies jerseys via Happy Returns, it can then send ’em all back at once.

“Free returns” ain’t free… America’s send-it-back habit was supercharged by the pandemic online shopping boom: the # of packages returned in 2020 soared 70% on the year. The National Retail Federation said that last year customers sent back about 16.5% of purchases. Now online retailers see 20% of orders returned. US end-of-year holiday returns alone are said to be worth $300B/year. Because returns are so expensive for retailers, companies like Zara and H&M have started charging for online returns (#FeeReturn).

☁️ (AI)l in the cloud… Microsoft flew past Wall Street’s growth estimates, notching record quarterly sales and 27% profit growth. The Word wizard benefited as the AI craze drove its Azure cloud sales up 29%. Yet Google’s stock slid after its cloud revenue fell short of expectations, and Amazon also disappointed with its AWS cloud growth. Tech heavyweights have been trying to incorporate more AI into their cloud-computing products after Microsoft’s $10B investment in OpenAI positioned it as a leader in the race.

📱 Ad-pocalypse over?… Meta posted its fastest sales growth in two years (up 23%) and a record Q3 profit, fueled by rebounding ad sales (which, btw, make up nearly 100% of its revenue). But Meta’s metaverse unit lost $3.7B and saw revenue drop 26%. Snap’s sales grew for the first time in two quarters as it attracted more ad $$ with fresh features. Snap said 200M+ people have used its My AI chatbot, which now includes sponsored links. Google’s quarterly revenue popped 11% thanks to stronger-than-expected YouTube and ad sales.

🛍️ Full e-carts… Amazon’s quarterly profit more than tripled from a year ago to $9.9B, crushing estimates. Its North American biz turned an operating profit after posting a loss last year, as consumers splurged on pumpkin-scented candles and holiday deco. The ecomm juggernaut credited its Prime Big Deal Days (including its largest two-day October holiday event) for selling “hundreds of millions” of products worldwide.

Looking forward → Big Tech has been rebounding, partly because of cost-cutting measures like layoffs. AI continues to fuel growth, with forecasts saying it could boost corporate profits by a massive $4.4T/year. But tech shares tumbled this week, and Meta and Snap warned that the Israel-Hamas war could hurt ad spend this quarter. Investors have eyes on reports from Apple, AMD, Pinterest, and Qualcomm next week.

🪙 Coins… Crypto exchanges including Coinbase and Binance are delisting coins at a record pace this year. It could be in response to increased pressure from regulators like the SEC, which called 19 tokens unregistered securities.

💰 Spendy… Crypto-analytics biz Chainalysis says North America is the largest crypto market by total transaction value received. But: 76% of transaction volume was from institutional investors, not mom-and-pop traders.

⚖️ Judgy… Prosecutors rested their case in Sam Bankman-Fried’s fraud trial. The former FTX CEO finally took the stand yesterday (though only after the jury was sent home) as the judge decided whether SBF’s planned testimony would be admissible.

• Truckulent: Ford disappointed on earnings and followed GM in pulling its annual guidance. Ford said the UAW strike cost it $1.3B in lost production — but it did reach a tentative deal with the union (feat. a 25% pay bump).

• Eats: Chipotle popped after the asada icon beat growth estimates as appetite for its burritos and bowls stayed high, despite price hikes. Piper Sandler found that Chipotle’s a top-three favorite resto for rich teens.

• Plus: Apple TV is the latest streamer to hike prices (to $10/month), double its cost just one year ago. Apple’s also raising costs for subs like Arcade and News as it looks to offset flagging hardware sales with services.

• Helix: 23andMe said its new $1.2K/year genetic-testing service would give customers a fuller picture of their health risks. This month, several hacks reportedly exposed millions of its customers’ genetic data.

• Rx: Bristol-Myers and Merck kicked off Big Pharma earnings with beats. Cancer drugs took center stage: YoY, sales of Bristol-Myers’ Revlimid plunged 41% because of generic rivals, while Merck’s Keytruda grew 17%.

• World Series starts

• Personal spending and consumer sentiment

• Earnings expected from AbbVie, Charter, Chevron, Colgate-Palmolive, Exxon, and Phillips 66

Authors of this Snacks own shares of: Alphabet, Amazon, Apple, Exxon, GM, Microsoft, Snap, and Uber

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