Data Dive: Bottom-Line Thinking On Bottom Lines

This week, data was all about the bottom line, at least it seemed, as data writ large, including the employment numbers and the hiring numbers tied to the U.S. labor markets, became events viewed through the rearview mirror.

Bank earnings, good and bad, held sway over the end of the period, as JPMorgan trumpeted growth and Wells offered a mixed bag. And in another way of looking at the bottom line, fleet card management, or mismanagement — and the impact to the Postal Service’s bottom line due to questionable transactions — got heavy scrutiny from the Inspector General (IG).

Wells Fargo:

It seems that lukewarm news might be good news — for Wells Fargo, also known as anything that does not have a lawsuit attached to it feels like good news.

Consider the latest earnings results. Yes, the company beat the Street by four pennies even as net income was stagnant and the top line slipped. Credit card applications were down by 42 percent year over year, off about 200,000 cards, but that decline is a bit better than has been seen previously on a percentage basis.

The green shoots may be shooting, at least per the company, where 23 million-and-change checking accounts were on the books, up a bit from last year and showing single-digit percentage growth in the digital realm.

Not much to crow about, but then again, not as much as might have been to squawk about either. In the meantime, the famed investor Warren Buffett cut his stake in the beleaguered bank, aiming to keep its ownership stake below 10 percent and withdrawing an application to keep its presence above that level, with the net result of selling 9 million shares.

Whole Foods:

Whole Paycheck, the firm has been called by critics, owing to the prices charged by the organic grocery chain. And, on the heels of last week’s news, perhaps the new moniker may be “Wholly Owned?”

The shift may be coming where the grocer may go from standalone to some larger firm’s unit via takeout, and not the kind that comes in those cardboard cartons. Amazon had considered buying the firm as recently as last year, and nothing materialized. But perhaps the door is opened for this roughly $11 billion (by market cap) company, to begin dancing with potential partners in earnest. Same-store sales have been declining, and the company has cut its own forecast and expansion plans as competitive pressures are eating into results, with a squeeze from online, brick-and-mortar and any number of meal delivery firms. Organic food may be healthy, but as an industry, it is no piece of (flourless ganache) cake.

Activist investors such as Jana Partners are raising their voices in support of a sale, perhaps via old-line firms such as Kroger — and with an 8 percent stake in Whole Foods, it is likely their words matter.

Fleet Card Oversight:

In a move that might tighten oversight down the road, no pun intended, around fleet cards, in the United States the IG considered the United States Postal Service’s (USPS) use of those cards (the USPS operates one of the biggest fleets in the country).

The upshot has been to question the validity of transactions totaling in the millions of dollars — as much as $9.9 million, in fact. The focus has been on movement and transactions confined geographically to the eastern part of the country. The report by the IG said that there should be more oversight of the cards, as 42 percent of transactions were not validated by invoices or other corroborating information. Perhaps insight and investigation into one fleet’s expense management practices may change the way those cards are used elsewhere or across other industries, and it just may be that buying fuel and maintaining vehicles en masse is about to get a much lengthier paper trail.

The week showed that, perhaps not surprisingly, Wells Fargo will have Far to Go to get Well (see what we did there?), and even the mightiest juggernauts in an industry might have to grapple with the vagaries of public markets and investors — certainly (Whole) food for thought.