Woolworths' e-commerce issues | Apple's got a problem | Meta’s doubling down on AI

This is what they flugs. I'm Brett and I'm justin. As Monday, the fourth of November, new information has come out Judy Boy via the ato's Tax Transparency Report. Get this little one, three thousand, nine hundred and eighty five entities that lodged tax returns in twenty twenty two to

Black fam As we kick off the new month, we're very excited to launch our latest course in the Academy, getting savvy with buying a property. Getting into the property market can feel as complicated as learning how would you break equations? So we've covered the ins and outs of buying a property, including some hot hips. What to look out for in the next six months.

Three highly beneficial stories today Jusy Boy, Let's do it for our first. Woolworths has warned its investors that earnings for the six months to December are looking likely to be five percent below last year's results.

Not the ideal. First impression for Willie's new CEO, then tell me what's going on here?

So juzy boy. We all know woo Works formerly the Fresh Food People, formerly Safe Way.

Yeah, they're the biggest supermarket in Australia with roughly thirty seven percent market.

Share, ahead of Coals with twenty eight percent market share.

And be Man Let's be honest. Willie has had a loft to deal with over the past year.

Yep, between losing their reputation is the second most trusted brand in Australia down to number thirty four.

Then the XEO resigned early after a bit of a media bungle.

And there have been extensive inquiries into its price gouging of customers by government committees.

But now be Man Woolly's new CEO has warned that its earnings before interest in tax or it's EBERT for the six months to December is expected to be down down and.

Not in the Coals down down good kind of way, Juzzy boy, Nope, Woolli's EBIT is expected to drop five point six percent below last year's one point six billion dollars and doze boit Woolies has been forced to discount its goodies.

But interestingly, the growth of its e commerce business has also been a key reason for its e bit struggling.

Interesting, so what is the key learning here?

When companies pursue new initiatives, they can unleash hidden costs that come back to buys.

Yep, Woolies has done a really good job growing its e commerce sales.

In the most recent quarter, it greuba over twenty three percent.

Meaning e commerce now accounts for fourteen and a half percent of all of its sales. Sounds pretty good to me, b man, it does sound pretty good. But here's the problem, O Juzzy boy e commoce sales are less profitable than those in physical supermarkets. How about that?

Yeah, for Woollies, they need to pick the stock, they need to pack the stock, and they need to dispatch it vir its logistics.

Are and that is a lot more expensive than having a customer rock up to the shop and b.

Man, this is part of the reason. Why will the share price drop more than six percent after the news?

For our second story, Apple has seen its quarterly sales jump five percent after investors got their first peak on how its iPhone sixteen sales are fairy.

Surely every person is just buying the iPhone sixteen to get rid of sire.

So tell me what well, Apple needs zero introduction three point five for trillion US dollar company.

Fair to say, value is around the same as the annual GDP of India, a COFU with nearly one point five billion people and juzzyboy.

Apple released its new iPhone sixteen in the US in late September, but it's Apple Intelligence features still haven't been rolled out.

And now, b Man. Apples announced that its revenue was up six percent year over year to nearly ninety five billion US dollars.

And juzbay overall iPhone revenue jumped six percent, So it seems like iPhone nerds are chueuing up big time here.

Slow down there, b Man, because despite all the backslabs and the high fives around these results, Apple still needs to take stock and look in its rearview mirror.

I feel like you're alluding to something here. Why is that?

Well, it's because Apple services business, which generated nearly twenty five billion US dollars, is facing some pretty big challenges right now.

Yep, Disney has joined Netflix and they're Spotify as well. They're all skipping the App Store when it comes to their own new subscriptions.

And They're pushing customers to sign up directly through their website to avoid the thirty percent commission that Apple charges in the app Store's war juzzy boys.

So what is the key learning here?

Not all revenue streams are created equally.

Good news for Apple that it's seen a growth in its iPhones recently, but.

Its services division is what a lot of Apple investors are currently drawn to and excited by.

That's, of course, the division that includes revenue from Apple TV plus iCloud, and of course the App Store.

In fact, the man Apple's gross margin for its services business this quarter was seventy four percent.

And Judy boy, don't followf your chair over there. That's almost double the approx. Forty percent margin for all of Apple's hardware products.

And that's why Apple's been pushing services hard for that particular reason.

Here's the thing. As companies like Netflix and Disney, they funnel users elsewhere. Apple services revenue has just started to slow down.

In fact, its services revenue was behind its forecast for the last quarter.

So despite these positive results, Apple investors will be keeping a very close eye on this one.

For our third and final story, Meta shares have dropped four percent after its quarterly update warned that AI investments were expected to ramp up.

Half bought, half man Zuckerberg has clearly not made investors happy. What is going on?

We no mata as the massive tech company that's behind some of the bigger social media platforms. Your facebooks, your Instagram's, You're WhatsApps.

Do not forget threads, juzzy boy man.

It hard to imagine b Man. This one point four trillion US dollar company started as an online student directory.

And twenty years later, it's trying to replace smartphones with the metaverse.

And now b man. Metas announced its quarterly results of just over forty billion US dollars in sales or a nineteen percent increase your own year, which was way more than investors had expected, but as daily active users only increased by five percent, which was less than investors were hoping for, and as a result, Metas shares actually dropped over four percent and be Man. On top of these results, Meta also announced that spending on its AI and its metaverse is going to ramp.

Up, and half man, half bot Zuckerberg gave serious airtime to the positive outcomes from its investments in AI.

So what is the key learning here.

Highlighting success stories is a key way in which companies justify investments to the share market.

One thing that's stuck out in metas quarterly update was the amount of airtime that it gave to how AI investments have performed so far.

They claim Meta Ai was on track to be the most used AI assistant in the universe, with over five hundred million monthly active users.

It seems like a bit of a stretch to me and b Man. Beta also claim that AI driven recommendations have led to an increasing time spent on Facebook and Instagram.

Sounds like Metas buttering up investors with these AI success stories.

Definitely does b Man, especially given that Meta's capital expenditure could reach up to fifty billion US dollars in twenty twenty five.

So if investors are going to see billion spent on non core business investments, you can bet they'll want to see payoffs sooner rather than later.

Flox Am if you're looking to buy properties at six twelve months or you've currently got a property, the Flux Academy this month is perfect for you. It explains everything from house deposits to getting pre approved, what's in a mortgage and first home buyers, costs and schemes. Make sure to download the Flux app and check out the Academy this month. Thanks for listening and it would set you on Wednesday,