If you’re a company that manages ticket sales for concerts and other live events, it makes sense that after a long 18 months, you’d be getting excited about the future.
What’s happening: “Momentum for the return of live has been building every month,” Live Nation CEO Michael Rapino told analysts after the company reported earnings Tuesday. “Looking forward to 2022 and now 2023, all our leading indicators continue to point to a roaring era for concerts and other live events.”
There’s no denying that the strong desire for a return to normalcy is there, feeding demand for travel and entertainment. But as the Delta variant courses through the United States, Wall Street faces a tough question: Is the recovery really going to play out as companies have expected?
A spate of companies considered “recovery stocks” have reported results this week — and what they’re disclosing is promising.
Live Nation said that June was Ticketmaster’s fourth best month ever in North America, and that more concerts were put on sale in the United States than ever before. Shares are up 4% in premarket trading.
Lyft achieved its profitability goal a quarter ahead of target as revenue rose 26% quarter-over-quarter and 125% year-over-year. The company said that active riders jumped by 3.6 million compared to the previous period as old customers returned and new ones signed up. Its stock is up 1% in premarket trading.
And Caesars Entertainment, which owns brands like Caesars Palace, touted the comeback of Las Vegas, where it said occupancy at its properties was at 89%. Chief Operating Officer Anthony Carano said the company is “encouraged by booking trends for the second half of ’21 and into 2022.” Shares are up 3% in premarket trading.
But executives are admitting that the spread of the Delta variant poses a risk.
“I want to remind investors that while declining Covid case counts in [the second quarter] fueled a rebound in our business, the pandemic is not yet over, especially with emerging variants and a return of restrictions in certain markets,” Lyft Chief Financial Officer Brian Roberts told clients. “We are cautiously keeping an eye on new developments and expect continued volatility and variability among cities. Future conditions can change rapidly and may impact our outlook.”
New York City announced Wednesday that it would require vaccines for entry to restaurants and gyms, while Las Vegas is back under a mask mandate.
Caesars Entertainment CEO Tom Reeg said he’s still bullish.
“What’s going on now with the mask mandate is far less onerous in terms of restrictions that we have dealt with in the last quarter,” he said.
Still, these stocks may start to be a tougher sell, depending on how the situation develops. Caesars’ stock is up almost 17% year-to-date, but has dropped 6% in the past week and 15% in the last month.
Activision Blizzard is in turmoil. Here’s what you should know
The gaming company behind “Call of Duty,” “World of Warcraft” and “Candy Crush” is doing solid business.
Activision Blizzard just reported revenues of $2.3 billion for its most recent quarter, a 19% jump from the same period last year and beating its own forecast. Shares are up more than 5% in premarket trading.
But that’s not why it’s been in the headlines. Activision Blizzard has been roiled by a scandal over its response to a California discrimination lawsuit, which triggered a walkout by employees.
Get caught up: It all started with a lawsuit filed by California’s Department of Fair Employment and Housing, alleging a “frat boy” work culture where multiple female employees were subjected to gender discrimination, sexual harassment and unequal pay.
The company’s effort to paint the suit’s claims as “inaccurate” and “distorted” only made matters worse. More than 2,000 current and former workers signed a petition slamming the response as “abhorrent and insulting,” while dozens of employees staged a walkout at the company’s campus in Irvine, California (with hundreds more joining virtually).
Activision Blizzard CEO Bobby Kotick, an industry veteran who became CEO of Activision in 1991, has tried to dial the temperature down, admitting in a note to employees last week that the company’s initial response had been “tone deaf.”
On Tuesday, the company announced that J. Allen Brack, president of the company’s Blizzard Entertainment studio, would be leaving his post — the first high-profile departure.
But the fallout is already rippling across the gaming world, the tech industry and corporate America, where workers have been feeling more empowered to speak out on working conditions, my CNN Business colleague Rishi Iyengar writes. Even with the rest of the business on track, Kotick’s job may not be secure.
Split screen: “With respect to our financial performance, we are pleased that the company continued to deliver strong results in the second quarter, and we are raising our outlook for the year,” Kotick said in a statement Tuesday. “We remain intensely focused on the well-being of our employees and we are committed to doing everything possible to ensure that our company has a welcoming, supportive and safe environment.”
Tyson’s employee vaccine requirement stands out
Meat producer Tyson Foods’ announcement this week that it will require all of its workers to be fully vaccinated against Covid-19 by Nov. 1 is unusual.
A number of big companies are moving ahead with such mandates. But so far, most have only applied to corporate workers, not frontline employees in stores or on factory floors, my CNN Business colleague Nathaniel Meyersohn writes.
See here: Tech companies such as Google and Facebook and banks like Morgan Stanley and Jefferies are implementing vaccine requirements for workers in office jobs. But employees in industries like retail, restaurants and manufacturing, who are exposed to coworkers and customers on a daily basis, are largely free of such mandates.
Tyson is taking a different tack as the Delta variant surges across the United States. The company, whose vaccine requirements are subject to negotiations with meatpacking plants represented by unions, said only half of its workforce has been vaccinated so far.
Such edicts could become more common as companies try to keep their businesses running smoothly. But for now, many firms are treading carefully — especially since they’re already grappling with labor shortages.
Employers have not implemented similar mandates for hourly workers because they worry some will quit rather than get vaccinated at a moment when it’s challenging to hire workers, said Brian Kropp, chief of HR research at Gartner, a research and advisory firm to companies.
The latest: Target, Home Depot and McDonald’s will require their workers to wear masks in many of their stores regardless of vaccination status. Walmart, meanwhile, is requiring US-based corporate employees and regional managers to be vaccinated by Oct. 4, but hasn’t issued the same mandate for store and warehouse workers.
CVS, Kraft Heinz, Marathon Petroleum, Royal Caribbean and The New York Times report earnings before US markets open. Etsy, Fox Corporation, Hostess Brands, IAC, McKesson, Roku and Uber follow after the close.
- The ADP private employment report posts at 8:15 a.m. ET.
- The ISM Non-Manufacturing Index, which tracks the US services sector, arrives at 10 a.m. ET.
Coming tomorrow: Earnings from Virgin Galactic, Beyond Meat and Zillow.
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