HBO CEO Richard Plepler announced his nico collins or dk metcalfresignation Thursday from HBO afteter informing WarnerMedia CEO John Stankey he wanted to leave earlier this month.
Plepler's departure is ominous for AT&T, which has little to no experience running giant media assets.
AT&T T spent more than $85 billion to acquire Time Warner and its crown jewel, HBO.
Now, just two days after the U.S. government finally gave up its pursuit to block the deal, HBO's CEO Richard Plepler is resigning.
According to people familiar with the matter, this is an issue of autonomy. Plepler wanted to run HBO, and new WarnerMedia CEO John Stankey, an AT&T veteran, was effectively running HBO. Plepler had ideas about technology and international expansion that didn't jibe with Stankey's vision, according to a person familiar with the matter. The two are also "different people" and didn't have the closest relationship, another person said. So after six years of running HBO autonomously, Plepler told Stankey earlier this month he wanted to leave, two of the people said.
Plepler hasn't decided where he will go next, though he'll only entertain jobs where he has leadership autonomy, the people said. He is expected to stay at HBO for at least two more weeks, the people said.
Leadership changes are common in acquisitions. But it's concerning that a company with no experience in Hollywood or media -- a company whose core business is wireless networks -- has caused the CEO of the jewel asset it coveted to want out.
Turner president David Leavy is also planning to depart, according to a person familiar with the matter. AT&T is in the final stages of bringing in former NBC head of entertainment Robert Greenblatt to run a new combined Turner and HBO division.
Greenblatt is a well respected veteran entertainment executive who has had success at several companies running content divisions. But integration is frequently made easier when leaders stick around. Leavy and Plepler won't be there to help. And former Turner CEO John Martin has already left .
The departures conjure up memories of resignations from the last time Time Warner was acquired by a large company that didn't specialize in its business -- 2000's AOL-Time Warner merger . That mega-deal has gone down in history as one of the most disastrous acquisitions in history.
Not every Warner executive is departing. Content chief Kevin Reilly and Kevin Tsujihara, chairman and CEO of Warner Bros, for example, are sticking around. But it's hard to see Plepler's choice to leave as a boon for AT&T.
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【nico collins or dk metcalf】HBO boss Richard Plepler wanted more autonomy at AT&T, and his departure is an ominous sign
人参与 | 时间:2024-09-29 12:24:41
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- 5%, led by a 17% increase in average ticket and a slight decline in traffic. Growth in the quarter reflected the impact of households stocking up on essentials like paper goods and cleaning supplies as the pandemic became a nationwide concern, along with strength in discretionary categories as the quarter came to a close and stimulus dollars and tax refunds were disbursed.
As shown below, the results in the quarter materially changed the trend in two-year stacked comps for each of the banners, along with a significant acceleration for consolidated comps.
The increase in consolidated comps was the primary driver of an 8% increase in revenues to $6.3 billion. The company ended the quarter with 15,370 locations, up less than 1% year-over-year. This reflects a 7% increase in Dollar Tree units, offset by a 4% decline in Family Dollar units.
The top-line results at each banner flowed through to their respective income statements, with Dollar Tree gross margins and operating margins declining year-over-year while Family Dollar gross margins and operating margins expanded year-over-year. On a consolidated basis, gross margins contracted by 120 basis points in the quarter to 28.5%, reflective of a shift to lower-margin consumables, tariff costs and the impact of markdowns from the Easter headwinds at the Dollar Tree banner. The company saw slight operating leverage on SG&A from higher comps, with the net result being an 80 basis point contraction in operating margins to 5.8%, with operating income declining 5% to $366 million. This is not adjusted for $73 million of pandemic-related costs, such as PPE supplies.
In the first quarter, the company opened 85 stores (net of closures) and completed 220 Family Dollar renovations to the H2 format. Importantly, comps at renovated Family Dollar stores continue to outpace the chain average by more than 10%. On the call, management indicated that they plan on reducing both the number of new store openings (from 550 to 500) and the number of H2 renovations (from 1,250 to 750) in 2020.
Personally, given the fact that Family Dollar is seeing material benefits to its business from the pandemic with new or lapsed customers coming into its stores, I think the company should try to get more aggressive with its renovation plans, not less. On the other hand, you could argue that renovations cause short-term disruptions and limit their ability to fully capitalize on the business momentum they are currently experiencing.
As a result of fewer new stores and remodels, management now expects 2020 capital expenditures to total $1.0 billion compared to previous guidance of $1.2 billion. In addition, the company has temporarily suspended share repurchases. At quarter's end, the company had $1.8 billion in cash on its balance sheet compared to $4.3 billion in total debt.
Conclusion
In recent years, Dollar Tree has been a tale of two cities. While its namesake banner has generally delivered impressive financial results, Family Dollar has been a persistent underperformer. This quarter, those results flipped, and given what we've seen in the weeks since quarter's end, there's a decent possibility that we will see something similar in the coming months. As the CEO noted, the second quarter is off to a very good start at Family Dollar.
Here's the important question: how useful is that information is in terms of making future predictions about the business? Will recent success at Family Dollar translate into long-term success for the banner? The optimistic take is that new or lapsed customers, especially those visiting the renovated stores, could become recurring business for the banner. The pessimistic take is that they have experienced short-term success out of necessity as people went to any store that was open to try and find essentials like toilet paper and hand sanitizer that were largely out of stock throughout the retail landscape. From that view, many of these customers could abandon the retailer when life returns to normal. As Philbin noted on the conference call, early on [during the pandemic], folks needed us. Will people still shop as much at Family Dollar when it's no longer a necessity?
Personally, I do not place too much weight on the recent results. I will need to see incremental data points that indicate that Family Dollar has truly won sustained business from these new customers. While I still believe that the Dollar Tree banner is a well-positioned retailer with attractive unit returns, I'm not yet willing to say the same thing for Family Dollar. For that reason, along with the recent run-up in the stock price, I plan on staying on the sidelines for now.
Disclosure: None
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