AmEx's profit for 3Q jumps 22%
NEW YORK — American Express said its third quarter profits jumped by 22 percent from a year earlier, as the credit card giant benefited from a lower tax rate and increased spending on the company's credit cards.
The company said it earned a profit of $1.65 billion, or $1.88 a share, which is up from $1.36 billion, or $1.51 a share, in the same period a year ago. The results beat analysts' expectations, who were looking for AmEx to earn $1.77 a share, according to FactSet.
"We delivered strong results this quarter driven by higher card member spending, fee income and loans," said CEO Stephen Squeri, who succeeded the retired Kenneth Chenault earlier this year.
American Express card users spent $294.7 billion on their cards globally last quarter, an 8 percent jump from a year earlier. In the U.S., the company's largest market, card user spending was up 10 percent from a year earlier. AmEx takes a fee from merchants for each time their cards are used.
AmEx has also been encouraging its users to maintain a balance on their cards as well, collecting interest income. Total loans held by AmEx users were $77.6 billion in the quarter, up from $67.9 billion a year earlier. That helped contribute to a 20 percent rise in interest revenue this quarter.
But that move into lending comes with a risk that some customers will be unable to repay their debts. The company's net charge-off rate, or the percentage of loans AmEx sees as unrecoverable, creeped up to 2.5 percent from 2.1 percent a year earlier. That figure still remains among the lowest in the industry, but it has been moving higher or holding steady for several quarters now.
Kleenex to rebrand 'mansize' tissues
LONDON — Kleenex maker Kimberly-Clark says it will re-brand its "Mansize" tissues after consumers complained the name was sexist.
The company says that following a "consistent increase of complaints on gender concern" the product will now be called "Kleenex Extra Large." Packages for the tissues describe them as "confidently strong" and "comfortingly soft."
Kimberly-Clark told Britain's Daily Telegraph on Thursday that it in "no way suggests" that being both soft and strong was "an exclusively masculine trait, nor do we believe that the Mansize branding suggests or endorses gender inequality.
"Nevertheless, as we remain committed to developing the best possible products for our consumers and take any feedback extremely seriously, we decided to renovate our current product and update the product sub-brand as Kleenex Extra Large."
Starbucks is scaling back in Europe
SEATTLE — Starbucks is restructuring its European operations after several years of slowing sales.
The Seattle-based coffee chain is selling 83 company-owned stores in France, the Netherlands, Belgium and Luxembourg to its longtime partner, Alsea. Alsea will also provide services to 177 other Starbucks locations in those countries which are owned by franchisees.
Mexico City-based Alsea already operates more than 900 Starbucks stores in Mexico and South America.
The deal is similar to one Starbucks made in 2016, when it sold off its stores in Germany.
Starbucks also plans to close offices in Amsterdam and consolidate its European headquarters in London. The closure will impact 186 employees, who will be encouraged to apply to open jobs in London.
Starbucks will retain a roasting plant in the Netherlands which employs 80 people.
Constellation CEO to step down
VICTOR, N.Y. — Constellation Brands chief executive officer Rob Sands will step down next year and hand over the reins of one of the world's largest beverage companies to its current president.
The company announced that Sands will relinquish his CEO position in March to Bill Newlands, hired in 2015 as chief growth officer and promoted to president in February.
The 60-year-old Sands, CEO for the past 11 years, will succeed his brother Richard as executive chairman. Richard Sands will become executive vice chairman.
The company was founded by the brothers' father, Marvin Sands, in 1945.
Newlands' previous experience in the beverage industry includes serving as a president at Beam Inc., now Seam Suntory Inc. Constellation's portfolio includes Corona beer, Robert Mondavi wines and Svedka vodka. The company based near Rochester employs about 10,000 workers.
Ebay sues Amazon, alleges poaching
NEW YORK — Ebay filed a lawsuit against Amazon Wednesday, saying the online retail giant used eBay's messaging system to steal its sellers.
In the lawsuit, eBay said Amazon representatives signed up for eBay accounts and messaged sellers to get them to sell their goods on Amazon.com, which eBay said violated its user agreement. According to the complaint, Amazon representatives spelled out their email addresses and asked eBay sellers to talk on the phone in order to evade detection.
Ebay called it an "orchestrated, coordinated, worldwide campaign" to "illegally lure eBay sellers to sell on Amazon." Seattle-based Amazon declined to comment.
Both eBay and Amazon rely on independent sellers to boost their revenue, but it's become a big part of Amazon's growth: Last year, for the first time, more than half the items sold on Amazon were from third-party sellers.
London black cabs head to Paris
LONDON — London's black cabs will be seen on the streets of Paris next year as the company that makes them begins selling its wares in the City of Light.
London Electric Vehicle Co., which makes plug-in electric taxis that look like traditional black cabs, has put about 600 vehicles on the streets of London and has already expanded to Amsterdam, Berlin, Hamburg and Oslo.
The move into Paris comes as Mayor Anne Hidalgo aggressively works to improve air quality in the city.
CEO Chris Gubbey says London Electric Vehicle wants to provide "new options" for drivers and passengers given the pollution problem facing French cities.
Weekly mortgage rates fall slightly
WASHINGTON — Long-term U.S. mortgage rates dipped slightly this week, taking a pause after weeks of steady increases stoked by rising interest rates.
Home borrowing rates remain at their highest levels in more than seven years, with the key 30-year rate approaching 5 percent. Mortgage buyer Freddie Mac says the rate on 30-year, fixed-rate mortgages declined to an average 4.85 percent this week from 4.90 percent last week.
Last week's average was the highest level for the benchmark rate since spring 2011. A year ago, it stood at 3.88 percent.
The average rate on 15-year, fixed-rate loans eased to 4.26 percent this week from 4.29 percent.
StarKist admits fixing tuna prices
SAN FRANCISCO — Authorities say StarKist has agreed to plead guilty to price fixing as part of a broad collusion investigation of the canned tuna industry.
Federal prosecutors announced the plea agreement Thursday and said the company faces a fine up to $100 million. Bumble Bee Foods last year pleaded guilty to the same charge and paid a $25 million fine.
Chicken of the Sea has not been charged because prosecutors say the company exposed the scheme and cooperated with the investigation.
Two former Bumble Bee executives and a former StarKist executive also each pleaded guilty to price-fixing charges.
Former Bumble Bee chief executive Christopher Lischewski has pleaded not guilty to a price fixing charge.
The three companies are accused of conspiring to keep canned tuna prices artificially high between 2010 and 2013.