Monday Business Briefing: A terrible week for local stocks; Waterfront Park authority to test donation boxes; appliance prices rising; and more
Welcome to the Oct. 29 Monday Business Briefing, your weekly business intelligence digest from Insider Louisville.
Local stocks tumbled amid concerns about future earnings
With the exception of Ford and Texas Roadhouse, all stocks of local importance fell last week — some sharply — as investors fled markets over worries about higher interest rates, the election, international trade wars, lower earnings forecasts and domestic terrorism.
The Dow Jones industrial average shed nearly 3 percent last week, while the broader S&P 500 fell nearly 4 percent.
Of 15 companies Insider tracks, either because they’re based in Louisville or have sizable operations here, 13 saw their stock price fall last week.
Ford’s shares rose nearly 5.7 percent last week on a strong earnings report and Texas Roadhouse, which will report earnings Monday, rose nearly 1.5 percent.
However, shareholders of Republic Bancorp, Papa John’s and CafePress saw the value of their holdings decline by less than 2 percent. And shares of Sypris Solutions, Apellis Pharmaceuticals, Brown-Forman, Humana, Turning Point Brands and Yum Brands fell, more or less, in line with markets.
Other local stocks, though, fared much worse: Limestone Bancorp was down 5.3 percent; Stock Yards Bancorp and UPS both nosedived around 9.6 percent; and Churchill Downs, which will post third-quarter results on Wednesday, stumbled down 8.5 percent last week.
While overall economic conditions — unemployment rate, inflation, GDP growth — have remained strong, investors increasingly worry about earnings outlooks. While third-quarter earnings reports generally have come in with solid revenue and profit data, companies have warned about potentially deteriorating business conditions. Both Ford and GE Appliances rival Whirlpool, for example, have said they’re incurring hundreds of millions of dollars in added costs because of tariffs on imported steel and aluminum.
One other major employer will release third-quarter results this week: Yum Brands is expected to post earnings on Wednesday. And watch for results this week from other corporate giants, including Starbucks, Facebook and Apple.
Waterfront Development Corp. to test donation boxes at Waterfront Park
As part of an effort to fill a gap in the Waterfront Development Corp.’s operating budget, the entity, which manages Waterfront Park, will place donation boxes in the popular park.
The test will start with four boxes, with locations on the Great Lawn, on the Big Four walking bridge, at the Adventure Playground and outside the offices for the Waterfront Development Corp., next to Joe’s Crab Shack. The boxes could be spotted in Waterfront Park by the end of the month.
The boxes ask people to place a donation inside, saying “every gift helps!” and also encourages those without cash on hand to donate online. Money equals a clean park, the boxes will note.
“If everyone who came to the park gave us a dollar, we’d have $2 million a year. That’s not going to happen, but that just tells you the scope of that,” said Kelley Runyon, WDC’s assistant finance director.
She added that new signage also will be placed at the park’s boat docks encouraging users to give.
“They’re very nice, and they would be secure. It’s clever,” said Susan Moss, chair of the WDC board.
Insider has reported that the WDC faces an annual deficit of more than $200,000 after the state eliminated a previously annual allocation to the corporation. WDC leadership have given up hope that the funding will return after being excluded from multiple budgets and has instead been investigating ways to make up the difference.
WDC’s board of directors abandoned an idea to charge for parking in Waterfront Park’s lots following an outcry from residents and city officials. Meanwhile, a group of wealthy Louisvillians stepped up to cover the budget deficit and give the board more time to come up with an alternative solution.
The organization’s officials are still considering other ways to boost income, including a possible fundraiser on the Big Four Bridge and a voluntary membership program. —Caitlin Bowling
Tariffs pushing up appliance prices
If you’re in the market for a new fridge, oven or washing machine, you might want to buy it sooner rather than later.
Appliance maker Whirlpool said in an earnings call last week that it has and will continue to raise prices to recover the $600 million in higher materials costs it is incurring because of the trade war between the U.S. and other nations, especially China.
Whirlpool CEO Marc Bitzer told analysts Thursday that the company is projecting to incur higher raw materials costs of about $300 million next year — about the same as this year — but planned to recover all of that through prices hikes.
GE Appliances would not discuss its pricing, though Consumer Reports wrote as early as April that the Louisville-based appliance maker would be raising prices. According to a letter obtained by Consumer Reports, GEA notified retailers in February that it, too, would be raising prices because of “significant cost increases.” South Korea-based competitor LG raised prices by up to 8 percent in March.
GEA employs about 6,000 at Appliance Park in Louisville.
A GEA spokeswoman told Insider last week that the company is “experiencing cost increases for finished goods and the components that go into our products due to tariffs and material inflation” but declined to provide details.
From a revenue standpoint, Whirlpool was about three times as big as GE Appliances in 2014 before General Electric sold the unit to Qingdao, China-based Haier, though comparisons between GEA and Whirlpool are difficult in part because Whirlpool generates a much greater share of its sales outside of North America.
Whirlpool and GEA in January had applauded a decision by President Donald Trump to impose tariffs on imported residential washing machines, but the president’s imposition of tariffs on imported aluminum and steel has meant higher materials costs for employers in many industries, including automotive, appliances and beverages (beer cans).
To counteract the higher prices, businesses can make changes to their supply chains, but that effort can be complicated and costly and may not be worth it if the tariffs remain for only a short period. If businesses keep their supply chains and incur higher raw materials costs, they can pass some or all of the higher costs to consumers or accept lower margins and profits. —Boris Ladwig
Monogram banks on Top Chef exposure
GE Appliances’ luxury brand, Monogram, expects to get a big reputational boost from its partnership with the TV show “Top Chef,” which filmed its latest season in Kentucky at iconic Louisville locations and elsewhere.
The show pits some of the nation’s chefs against one another in cooking competitions in which, this season, they will use Monogram-branded appliances.
A preview of the new season shows clips that contain many quintessential references to Kentucky, from basketball to boxing to bourbon. The teaser features Churchill Downs, famous chefs including Eric Ripert and a well-known basketball arena that’s not in Louisville. The clip also prominently displays lots of appliances made by the 6,000 workers in Louisville’s Appliance Park, such as the $10,000 Monogram pizza oven, which can cook pizzas in two minutes (after a 30-minute preheat) and fits into a standard wall oven space.
Monogram Commercial Brand Director Ed Mammorella told Insider that GEA staff have not seen the new episodes but expect the appliances, including the Louisville-made Monogram dishwasher, to get a great deal of airtime.
The “Top Chef” creative team visited the Monogram Experience Center at Appliance Park to inspect the luxurious refrigerators, ranges and ovens and chose some of them for the challenges in which contestants will participate, Mammorella said. Monogram also outfitted the cast house.
The Monogram line targets primarily well-to-do customers, some of whom may spend more on their kitchens than other people spend on their entire homes. Mammorella said that luxury brands have few opportunities to set themselves apart in the high-end market, which sees about 150,000 kitchens built every year, and that makes the exposure Monogram will get from its starring role on “Top Chef” all the more critical.
“It was all hands on deck,” he said. “This is a very important partnership for us.”
Mammorella was guarded about sharing details of the partnership and whether it involved money changing hands. He also did not want to discuss any goals the company may have set regarding projected market share gains, but he acknowledged that Monogram certainly expects the TV exposure to generate some brand awareness.
“It’s just a great way to tell the Monogram story,” Mammorella said.
Brownsboro area gets $38 million cancer institute
Norton Healthcare has opened a $38 million cancer institute in northeastern Jefferson County.
The nearly 48,600-square-foot building, dubbed Norton Cancer Institute – Brownsboro, is a comprehensive cancer care center with radiation oncology, medical oncology and infusion therapy all in one location.
Donor support for this project “will bring new hope and unique care to many patients and families touched directly and indirectly by cancer,” Norton Healthcare Chief Executive Russell Cox said in a news release.
The three-story building has a state-of-the-art oncology pharmacy, a Prompt Care Clinic to provide urgent care, and streamlined registration and preregistration that use mobile apps and self-check-in kiosks.
Among several other features, there’s also a healing garden, quiet room and education center.
“Our aim was to use space and advanced technologies strategically to create an environment that minimizes wait time and promotes harmony, well-being and advanced compassionate care,” Norton Cancer Institute Physician-in-Chief Joseph Flynn said in the release. —Darla Carter
Louisville Collegiate School will have a new leader next year. Robert Macrae is slated to begin as the school’s 15th Head of School on July 1 next year, succeeding interim leader Geoff Campbell.
After a national search, the Kentucky Council on Postsecondary Education hired Aaron Thompson to be its next president. Thompson, who is CPE’s chief academic officer, will be the first African-American to hold the role.
University of Louisville Hospital, which was recently re-verified as a Level I Trauma Center, has opened its newly renovated and expanded Burn Center. A ribbon cutting and celebration were held Friday for the 16-bed center, which is located on the sixth floor. “We are expanding all of our services, from beds to staff to therapy, to offer even better care for patients and their families,” clinical nurse manager Lori Sipes said in a news release.