There were plenty of winners and losers this week, with the country’s largest Italian casual-dining chain announcing a new sandwich and the Blizzard royalty sending mixed signals with its latest menu move.
American Express (AXP) — Winner
The financial services giant is returning more of its money to shareholders. American Express announced that it would be purchasing as many as 150 million shares, boosting the power of an earlier buyback plan that still had 45 million shares left to purchase on the open market. American Express is also boosting its quarterly dividend by 12 percent to 29 cents a share. The move pushes its yield to 1.5 percent.
Macy’s (M) also announced a payout hike and a stock buyback, but it didn’t make the cut this week because those treats accompanied a quarterly report by the department store chain that was surprisingly light.
King Digital (KING) — Loser
Mobile gamers can be fickle. King Digital continues to shed players of its defining “Candy Crush Saga” game, and it can’t seem to develop new titles to make up for the defections quickly enough.
King Digital clocked in with gross bookings of $604 million in its latest quarter, 6 percent below where it was a year earlier. That’s not so bad — and it was actually a sequential uptick — but then King Digital rained on its own parade by warning that bookings for the current quarter will come in between $490 million and $520 million. That’s a sharp sequential drop, even with seasonal tendencies.
Olive Garden — Winner
A breadstick sandwich is coming to the rescue at Olive Garden. Darden Restaurants (DRI) revealed that its traffic-hungry casual Italian chain will introduce a new line of sandwiches served on breadsticks as buns.
The meatball or chicken Parmesan options will come with fries as well, and yes, unlimited breadsticks. Darden knows how to milk its signature menu items. Just before it unloaded Red Lobster two years ago it rolled out a lobster pot pie with the chain’s addictive Cheddar Bay biscuit in crust form. A new sandwich line isn’t enough to end the streak of two years of negative declining store traffic at Olive Garden, but it should generate plenty of free publicity for the chain hungry for attention.
Berkshire Hathaway (BRK-A) (BRK-B) — Loser
Berkshire Hathaway’s Dairy Queen is removing sodas as a choice from its kid meals. The move, in theory, makes sense. Sugary soft drinks have been tied to childhood obesity, and Dairy Queen becomes the latest chain that serves fast-food to go this route.
However, this makes the cut as a losing move because Dairy Queen still includes decadent ice cream as treats in its kid meals. Are you telling me a small cup of Coke is worse than a Dilly Bar with 220 calories and 10 grams of saturated fat?
This also makes the cut because Berkshire Hathaway happens to be Coca-Cola’s (KO) largest shareholder.
Facebook (FB) — Winner
The leading social networking website is throwing media companies a bone. Facebook is rolling out Instant Articles, a platform that lets select media companies publish articles directly from Facebook. The first wave of publishers includes New York Times, BuzzFeed, and National Geographic.
It’s a win-win-win. Facebook users get articles that load quicker. Facebook keeps folks on its site. Media companies get to keep 100 percent of the ad revenue that they sell. They can also turn to Facebook’s revenue-sharing marketing platform for unsold inventory and collect 70 percent of that.
It’s yet another smart move by the dot-com darling.