Stupidity is contagious. It gets us all from time to time. Even respectable companies can catch it. As I do every week, let's take a look at five dumb financial events this week that may make your head spin.
1. Oh no U didn't We know that the Wii U has been a flop since its release last November, but did anyone thing it would be this bad?
Nintendo Co., Ltd (ADR) (OTCBB:NTDOY) revealed on Wednesday that it sold just 160,000 Wii U consoles in its latest quarter. It has sold just 3.6 million systems worldwide since last year's debut, well short of expectations. However, seeing the platform collapse in the June quarter is brutal.
Nintendo Co., Ltd (ADR) (OTCBB:NTDOY) itself did turn a profit. There was a nice bounce in software sales for its handheld 3DS system. However, Nintendo Co., Ltd (ADR) (OTCBB:NTDOY)'s about to be rubbed out of the console market with the more powerful Xbox One and PS4 on the way later this year.
Why didn't Nintendo Co., Ltd (ADR) (OTCBB:NTDOY) come through with a price cut on the Wii U sooner? It needs an established base. Nintendo Co., Ltd (ADR) (OTCBB:NTDOY) also sold just a little more than a million first-party games during the quarter, and that's perhaps even more troubling than the weak console figure. Even folks who have already bought the system aren't rallying around the in-house releases that have been so magnetic in the past.
The industry's changing, and Wii U appears to be the first casualty of this round of the console war.
2. Coach, Inc. (NYSE:COH) potato
It isn't easy being Coach, Inc. (NYSE:COH) these days.
With the economy showing signs of life, high-end shoppers are starting to buy premium handbags and accessories. They're just not buying Coach, Inc. (NYSE:COH)'s products.
Coach, Inc. (NYSE:COH) took a hit after posting financial results that fell short of Wall Street expectations. Net sales may have climbed 6%, but North American comps actually declined 1.7%. North American comps have fallen in two of the past three quarters. Net income inched a mere 1% higher.
A pair of Coach, Inc. (NYSE:COH) executives also announced that they would be leaving the company at the end of the month.
The news contrasts at least one smaller premium handbag rival that's sporting some serious growth these days. Coach, Inc. (NYSE:COH)'s weakness at a time of upper class prosperity is troubling.
3. Don't drink and SkyDrive If you've warmed up to Microsoft Corporation (NASDAQ:MSFT)'s SkyDrive, prepare to experience the cloud-base file storage platform under a new moniker.
Microsoft Corporation (NASDAQ:MSFT) came up short in its legal tussle with Britain's BSkyB over using the Sky name. Microsoft won't appeal the trademark battle that it lost on Wednesday, and will be allotted a reasonable amount of time to rebrand its service.