Consumer Product Companies' Sales Intact Despite Supply-Chain Mess

Profits Intact at Large Consumer Products Companies

Large consumer products companies like Procter & Gamble (PG), Albertsons (ACI), and other big names have been weathering the global supply-chain meltdown better than other industries, relying on their large cash reserves, brand recognition, and worldwide operations to ensure that shelves remain stocked now and into the holidays. The companies have been able to maintain relatively normal operations despite delivery delays, rising costs, and labor and raw material shortages, enabling them to meet rising demand and to continue to grow.

Take P&G for example. When the consumer products company reported quarterly earnings yesterday, the company forecast sales and profit growth, despite rising costs. Because of its size, P&G has been able to keep products in stock and keep its profit forecast for 2021 intact.

IKEA and Albertsons Weather the Storm

Furniture seller IKEA is also weathering the supply-chain slowdown relatively unscathed. The company said inventory shortages are not having a significant impact on sales because it sells a wide range of products. That enables IKEA to sell enough alternative items to cushion the blow from shipment delays.

Meanwhile Albertsons, one of the nation’s largest grocers, reported a close to 5% increase in sales for its most recent quarter, despite limited inventory. It too is offering customers alternatives to keep sales intact. The grocer said shoppers may not find the exact items they want in stores, but there are similar options available. Both Albertsons and P&G said they are also raising the prices they charge consumers.

Nike Passes Costs on to Consumers

Nike (NKE), which is facing higher costs, especially for products coming from Asia, still expects its gross margin to grow, even though it lowered sales forecasts for the year. Premium brands like Nike can raise prices without facing as much consumer backlash as other brands might. A shift to online sales is also expected to help Nike.

Large consumer products companies are faring better than other industries as supply-chain difficulties continue and the holidays approach. Companies are using their cash reserves, global operations, and brand-name recognition to keep profits up and consumers happy.

Exchange-Traded Funds: What You Need to Know

An exchange-traded fund (ETF) is an investment fund that you can buy and sell like a stock, but that pools together different assets, such as stocks, bonds, commodities, or currencies, and then divides its ownership up into shares.

An ETF bundles many investments together to be bought and sold in one neat and tidy package. The purchase of one ETF provides exposure to dozens or even hundreds of different investments at once.

This means that with just a few clicks, it is possible to buy one fund that provides exposure to hundreds or thousands of investment securities. ETFs are often heralded for helping investors gain diversified exposure to the market for a relatively low cost.

This is important to understand—the ETF is simply the suitcase that packs investments together. When you invest in an ETF, you are exposed to the underlying investment. For example, if you are invested in a stock ETF, you are invested in stocks. If you are invested in a bond ETF, you are invested in bonds.

Most ETFs are passive, which means to track an index. Their aim is to provide an investor exposure to some particular segment of the market in an attempt to return the average for that market. If there’s a type of investment that you want broad, diversified exposure to, there’s probably an ETF for it.

Though less popular, there are also actively-managed ETFs, where a person or group makes decisions about what securities to buy and sell within the fund. Generally, these will charge a higher fee than index ETFs, which are simply designed to track an index or segment of the market.

With SoFi Invest®, it’s easy to browse and buy intelligently weighted and affordably priced ETFs. Get started in the SoFi app!

ExxonMobil and Saudi Aramco Back Emission Monitoring Startup

Satellites Play Role in Combating Climate Change

ExxonMobil (XOM) and Saudi Aramco are among the multinational companies using satellites to track emissions. In the last three years, satellite imagery has exposed methane leaks across the world including in Russia and Texas.

Private companies, environmental agencies, and activists are using satellite data to put a spotlight on greenhouse emissions leaks. Meanwhile, governments and startups are launching their own satellites to spot greenhouse gases. ExxonMobil and Aramco are using satellites to prove they are meeting new emissions standards. Both hold a stake in GHGSat, a global emissions monitoring company which relies on satellites.

Satellites on the Agenda

Using satellites to measure companies and countries' greenhouse gases will be the topic of an international climate summit being held in Glasgow in November. The US, the United Nations, the European Space Agency, and private companies are expected to call for wider use of satellites during the meeting.

GHGSat’s Plans

The emissions monitoring company GHGSat, which the oil industry owns roughly one-third of, counts Royal Dutch Shell (RDSA) and Chevron (CVX) as customers. GHGSat has launched two satellites this year which have powerful cameras that can zoom in on all the pipelines and wellheads across the globe. GHGSat raised $45 million in a second round of venture funding in July and plans to use the money to build 10 more satellites.

Climate change is heating up and companies and governments are working to meet ambitious emissions goals. Satellites are emerging as a powerful tool in the fight, given their ability to help track greenhouse gases. It will be interesting to watch as the new industry progresses.

Lawmakers Make Progress on Big Tech Regulation

Bipartisan Support and a Sense of Urgency Drive Lawmakers

Facebook (FB), Alphabet (GOOGL), Amazon (AMZN), and Apple (AAPL) are in the crosshairs of US lawmakers. Washington is making progress on new legislation aimed at curbing the tech industry’s power.

Last week, a group of bipartisan senators released legislation which would prevent tech companies from favoring their products and services over others. Meanwhile, lawmakers on the House Energy and Commerce Committee are working on a proposal to stop social media companies from promoting content on their platforms which is harmful to users. Lawmakers appear to have a new sense of urgency to get legislation passed. There is also a level of bipartisan cooperation that hasn’t been seen in the past.

Facebook Revelations Drive the Legislative Push

The push to regulate Big Tech has been spurred by recent reports which shed light on the harm Instagram causes teenagers. Facebook was aware of the damage Instagram was doing to some of its teenage users, but didn’t disclose its internal findings. The reports prompted two hearings before the Senate and are driving many of the recently proposed bills.

One regulation, which has a good chance of passing, is an update to the Children’s Online Privacy Protection Act, which was first put in place in 1998. The change would prohibit internet companies from gathering information on 13- to 15-year-olds without their consent.

An Uphill Battle for Lawmakers

Despite the momentum in Congress, even passing an update to the Children’s Online Privacy Protection Act could prove difficult. After all, Facebook, Google, Amazon, and Apple all have big lobbying operations in Washington and spend millions to get their points across. In the first six months of 2021, Amazon spent close to $10.2 million on lobbying. Facebook spent $9.6 million in the same period.

The tech companies say they support updated regulations for the internet but oppose a lot of the specific legislation Congress is working on. For years, calls for more regulation of tech companies have fallen on deaf ears in Congress. Now, that has changed. It will be interesting to see how negotiations in Washington unfold and what impact regulations could have on the tech industry.