In this segment of Friday's Investor Beat, Motley Fool analyst Ron Gross gives investors one stock that he'll be watching closely this week. He takes a look at Arcos Dorados , which holds the franchise rights to McDonald's in Latin America and the Caribbean. The company reports earnings next week, and while it has been a long-time holding for Ron in the Motley Fool's Million-Dollar Portfolio service, he sees reasons to be concerned here. The company's store growth is slowing, so he'll be watching closely to see what the company has to say next week.

The monthly jobs numbers are in, and they look good. How will this impact the Fed, and its tapering off of its quantitative easing program? In this video from Friday's Investor Beat, host Chris Hill and Motley Fool analyst Ron Gross discuss the jobs numbers, what they reflect about the economy today, and the key investor takeaways.

Then, Safeway, the second largest grocery chain in the U.S., has announced that it will be taken private by private equity firm Cerberus Capital. The firm will be paying $40 per share for Safeway in a $9 billion deal that will bring the grocery chain under the Cerberus umbrella to join Albertsons, which should help the business in terms of scale to take on other grocers like Kroger, or even the big box retailers that also sell groceries, such as Wal-Mart. While investors are seeing virtually no premium to the current stock price in the buyout, Ron notes that there has been talk of this being a possibility for a while now. The stock's growth during the past few months reflects the idea of a buyout being already baked in to today's price.

Also, shares of headphone-maker Skullcandy shot up nearly 30% today after the company reported fourth-quarter results that were better than expected. "Better than expected," however, translates to profits being down nearly 70%. Chris and Ron discuss just how low the sentiment around Skullcandy had to be for the stock to react this way on such awful news. Ron says a mix of beating expectations, plus investors doing some short covering who had thought the company was done for, can cause a pop like this. While he does see a handful of things that the company is doing right at the moment, he doesn't see much of a competitive advantage here, and wouldn't be a buyer at these prices.

And finally, Ron gives investors one stock that he'll be watching closely this week. He takes a look at Arcos Dorados, which holds the franchise rights to McDonald's in Latin America and the Caribbean. The company reports earnings next week, and while it has been a long time holding for Ron in the Motley Fool's Million-Dollar Portfolio service, he sees reasons to be concerned here. The company's store growth is slowing, so he'll be watching closely to see what the company has to say next week.

The Department of Defense awarded 12 separate defense contracts Friday, worth $10.33 billion in total. The vast majority of these funds, however, were awarded in just a single award -- a monster $10 billion firm-fixed-price, indefinite-delivery/indefinite-quantity contract for "support of special operational equipment tailored logistics support program."

Only five privately held firms will participate in this two-year contract (extendable up to five years). No publicly traded firms at all were chosen to participate -- but publicly traded firms did still win a few of the day's smaller contracts, among them:

• A $76.1 million contract modification awarded to the Bell-Boeing Joint Project Office, a joint venture between Textron  and Boeing , which instructs the JPO to delivery one single additional CV-22 tiltrotor aircraft to the U.S. Air Force by December 2016.
• A $39.4 million fixed-price with economic-price-adjustment contract for Sysco to provide "prime vendor food and beverage support" to the U.S. Army, Navy, Air Force, and Job Corps in Florida through April 16, 2019.
• A $32.3 million option exercise for NuStar Energy L.P. subsidiary Shore Terminals LLC to provide "petroleum storage services" to the U.S. Army, Air Force, and Marine Corps through Nov. 30, 2016.
• A $7.7 million undefinitized contract modification compensating Lockheed Martin for "non-recurring sustainment activities" performed on behalf of the government of the United Kingdom, related to the latter's purchase of F-35 Lightning II stealth fighter jets. This contract has a completion date of June 2014.

Investors seemed to get what they were looking for out of today's jobs report, but stocks still held steady as the Dow Jones Industrial Average  gained 31 points, or 0.2%, while the S&P 500 moved up a point, or just 0.05%. The Department of Labor reported that 175,000 jobs were added in February, better than estimates at 163,000, while the unemployment report ticked up to 0.1%, to 6.7%, above estimates at 6.6%, a reflection of more people looking for work as the number of long-term unemployed increased 203,000, to 3.8 million. The Department also revised December and January job counts upward by a total of 25,000, showing job growth earlier in the winter was not as poor as suspected. Still, any positive bump from the jobs report could have been neutralized by rising tensions in Ukraine, as the Russian government said it had the right to annex Crimea, rebuffing threats of sanctions from the U.S. and other western powers. European stocks were also down sharply on the military standoff, as the German DAX fell 2%. 

The employment report and continuing concerns in Ukraine dominated headlines, but there were still some individual stocks making news. Big Lots  shares exploded today, moving up 23% on a strong earnings report. The closeout retailer posted earnings of $1.45 per share, down from a profit of $2.08, but better than estimates at $1.40. Revenue fell 6%, to $1.64 billion, above expectations of $1.41 billion, and same-store sales dropped 3%. Big Lots also said it would complete the closure of its Canadian stores in the current quarter, and projected EPS of $0.40-$0.45, below estimates at $0.50, and full-year per-share profit of $2.25-$2.45, within the range of estimates at $2.44. Same-store sales are projected to be flat to 2%. Big Lots' surge seems to speak to the market's low expectations for retailers this quarter, but Big Lots' flat growth makes it unlikely that investors will see many more days like this.

Big Lots wasn't the only retailer soaring today. Foot Locker  finished the day up 8.8% after beating estimates in its fourth-quarter report. The sneaker retailer turned in a per-share profit of $0.82, ahead of expectations at $0.76, as revenue improved 4.6%, to $1.79 billion, topping the consensus at $1.77 billion. Comparable sales were up 5.3%. CEO Ken Hicks credited his team's execution for the strong quarter, and said there were a number of opportunities, including the expansion of shop-in-shops, its children's business, and banner.com, which would allow for mid-single-digit comp growth and double-digit earnings-per-share growth. Considering the environment that many retailers have been facing over the holidays, Foot Locker's report was particularly impressive. 

To figure out Target's potential  over the next year, we need to look at some key numbers. At the same time, one non-event as well as one key comment might be the clearest indications of the company's potential over this time frame.

Numbers tell a story
In the fourth quarter, Target suffered a 2.5% comps decline. This is exactly what Target had predicted following the data breach, which is a positive sign. It's always comforting to investors when a company tells the truth.

If you're looking at this comps decline from a factual perspective while eliminating expectations, then it's a negative. You could point to the fact that comps were on track to grow prior to the Dec. 19 announcement of the data breach, but so what? The data breach is an event that actually took place. Therefore, it matters.

Source: Target

(http://www.target.com/)

Let's take a look at the bigger picture. For the 12 months ended Feb. 1, comps suffered a 0.4% slide year over year with transactions declining 2.7%. On the other hand, those who shopped at Target generally spent more than in the prior year, with the average transaction amount increasing 2.3%. On top of that, REDcard sales (credit plus debit) jumped 19.3%. 

Up until this point, it might seem difficult to tell which way Target is heading. It's important to note that in addition to the data breach, Target is also struggling in Canada. For instance, while overall full-year diluted earnings per share came in at $3.07, that number was negatively affected by $1.13 due to Canada.

Now for that non-event and important comment.

What to worry about
When a company faces a PR nightmare, someone in upper management will sometimes buy a boatload of shares, putting his own money on the line. However, this only happens if that individual is highly confident in the company's future prospects. While it's highly likely that Target will eventually get back on track and be a long-term winner, nobody knows how long this will take.

Upper management has a much better idea than the public, and a relatively large insider purchase would demonstrate conviction. This non-event isn't a negative, but it does show that no one has stepped up to the plate, possibly because they know more pain is to come.

As far as that comment goes, this doesn't pertain to a personal comment but a comment written in the quarterly report, which was as follows: "At this time, the company is not able to estimate future expenses related to the data breach." 

Investors can handle bad news better than uncertainty. Without knowing what headwinds must be dealt with around the corner, investors get nervous. Target might not know what the future holds concerning future expenses due to the data breach, but that doesn't make this news any more comforting for investors.

Target will potentially have to contend with the following: claims by payment networks, card reissuance costs, civil litigation, government investigations, and remediation expenses -- just to name a few. However, the biggest hit isn't increased expenses but a loss of customer trust. For that reason alone, you might want to look into Wal-Mart Stores or Costco Wholesale . It's going to take time for Target to regain customer trust. 

Investing in the right discount retailer
Wal-Mart recently reported subpar results, which had a lot to do with targeting the low-income consumer who is struggling at the moment. Fortunately, Wal-Mart's massive cash flow generation -- $23.3 billion in operating cash flow over the past year -- makes up for this setback ... if you're looking for a solid dividend play. At the moment, Wal-Mart offers a dividend yield of 2.6%.

Target generated $6.7 billion in operating cash flow over the past year, and it currently offers a generous dividend yield of 3.1%.

Costco only generated $3.3 billion in operating cash flow over the past year, and it only offers a dividend yield of 1.1%. On the other hand, consider the five-year chart below. Costco might not be the best option for dividend investors, but it is growing the fastest: 

COST Revenue (TTM) data by YCharts

The Foolish takeaway
If you want to attempt to pick a bottom in Target, then you might still have an opportunity to get on board. However, this is guesswork. If you're looking at this from a Foolish perspective, then Costco is clearly the most efficient company of the three at the moment. The only reason not to consider Costco first is if you're looking for dividends as opposed to growth. Please do your own research prior to making any investment decisions.

Hate your taxes? Hate the banks? One proposal is seeking to revolutionize both.

Many have taken issue with the taxes -- or lack thereof -- paid by companies in recent years, yet a plan announced last week by Congress is proposing major a change in what the biggest financial institutions will pay. This could have dramatic impacts to firms including Bank of America , AIG , Citigroup , Wells Fargo , and JPMorgan Chase .

Chairman of the Ways and Means Committee, Dave Camp (R-Mich.), revealed his plan "to fix America's broken tax code by lowering tax rates while making the code simpler and fairer for families and job creators," in the Tax Reform Act of 2014, which proposes to simplify the tax code and reduce the burden face by individuals as a result of the current tax system.

The 979 page legislation is full of changes aimed to result in more growth for the United States economy, more jobs available to Americans, and ultimately more money back into the pockets of millions. 

The plan also introduces an additional tax on the biggest financial institutions.

President Obama signing Dodd-Frank.
Source: Flickr / Leader Nancy Pelosi.

The extension of Dodd-Frank
The Dodd-Frank act was passed in the wake of the financial crisis and brought change across the broader banking landscape. It also included the designation of the Systemically Important Financial Institution, (SIFI).

Yet the Tax Reform Act of 2014 takes issue with the provision of the SIFI designation and highlights this implicit government guaranty results in the biggest banks paying lower costs to borrower money. The proposal notes it "cannot undo Dodd-Frank," but it does seek to "ensure that Wall Street reimburses the American taxpayer for a portion of the subsidy it receives." 

The plan aims to introduce an additional tax which would require any financial institution with more than $500 billion in assets to pay a 0.035% tax on every dollar of their assets above $500 billion. In addition, it seeks to provide greater transparency across the variety of transactions banks are involved in.

What it would mean
While 0.035% doesn't sound like a lot, it is important to remember that is the quarterly suggested rate. That would mean a total tax of 0.14% of assets above $500 billion for the full year. And when you consider JPMorgan Chase has $2.4 trillion in assets that means it could expect an astounding $2.7 billion in additional tax payments. Bank of America would be next on the list with $2.3 billion in additional taxes:

Source: Federal Reserve. 

In total, the four largest banks would shell out $8.3 billion back to the Federal Government in the form of additional taxes, which would ultimately be taken straight out of the net income which is available to shareholders:

Source: Company Investor Relations.

In total, the Joint Committee on Taxation anticipates the new taxes would result in $86.4 billion paid to the government as a result of this tax from 2015 to 2023.

The bottom line
The Tax Reform Act of 2014 poses a number of notable initiatives and it is estimated it could result in 1.8 million new private sector jobs, grow GDP by as much as $3.4 trillion -- 20% of current levels -- and result in the average middle class family seeing $1,300 back in their pockets as a result of lower tax rates and economic growth. Those are all undeniably good things.

Yet one has to have some level of concern surrounding what higher taxes at banks could mean for the economy. They could attempt to overcome the impact by charging higher rates on loans to consumers, increasing fees, turning away depositors, or perhaps even expanding efforts to shelter themselves through off-balance sheet assets like derivatives.

The biggest banks have faced an appropriate amount of scorn for their roles in the financial crisis, but they are also one of the engines for economic growth and development in America. While that doesn't excuse prior actions, one has to wonder if the pendulum has now swung too far in the other direction, which could have an equally disastrous result.

Melco Crown is the latest gaming company to consider paying a dividend after its board of directors recommended paying both a special and regular dividend. If approved, it would join Wynn Resorts and Las Vegas Sands as dividend-paying gaming stocks. 

This is a huge shift from just a few years ago, when companies were drowning in debt and used junk bonds just to expand operations. But Macau is such a cash machine that it can pay back investors with dividends and investors can rely on the income long-term. 

In the following video, Fool contributor Travis Hoium covers what Melco Crown's dividend might look like and why dividends change how investors should look at gaming stocks. 

Some people believe Warren Buffett has lost his edge.

Berkshire Hathaway's book value growth has actually lagged the total return of the S&P in four of the past five years. Before you start saying that Berkshire's best days are behind it, consider the reasons why this simply doesn't matter.

It's not about the good years
Don't focus on the fact Berkshire has been outpaced by the S&P for four of the past five years. What people should be focusing on is how Buffett and team perform when the market is down, because that is the true key to the company's success. 

For example, in 2008 the S&P was down 37%, while Berkshire only lost 9.6% of its book value. The next year, the S&P gained 27%, compared with just 20% for Berkshire. In 2010 as well, the S&P outperformed with a gain of 15% vs. 13%. 

However, if we had invested $10,000 in both Berkshire's book value and an S&P index fund at the beginning of 2008 the Berkshire investment would be worth more than $12,200 in 2010, while our S&P investment would be worth just under $9,200. So even though the S&P outperformed Berkshire two out of three years around the financial crisis, Berkshire's total return for the period was 22%, while the S&P's return was -8%. This is why the performance during bad years matters more.

Over the past 50 years the S&P has had 11 losing years. Berkshire, on the other hand, saw just two!

What really happens when the market rises quickly
As a general rule of thumb, when the market rises quickly, riskier stocks are generally among the best performers. 

Well, Warren Buffett doesn't buy risky stocks. He wants stocks that are going to deliver consistently good performance, year in and year out, no matter what's going on in the world. As he said in regards to his two major purchases in 2013 (NV Energy and a major interest in Heinz), "Both companies fit us well and will be prospering a century from now."

The company also actively looks for opportunities to raise its stake in businesses that it already invests in, and just this year bought more shares in Wells Fargo (Berkshire now has a 9% stake) and IBM (6%) as both stocks were significantly undervalued in Berkshire's eyes.

The best investing lesson of Warren Buffett
In short, don't worry about any individual year's performance too much. As long as your investments provide you with growth and consistency, and you think they'll still be around and thriving in 100 years, you'll be fine. Look at the types of businesses Buffett invests in. People will always need banks, energy, insurance, and ketchup!

What happened when the financial crisis hit? Buffett invested in banks, because he knew that no matter how tough times got, people would still need banking services many years from now.  Where most people saw crisis, he saw opportunity.

When it comes to investing, slow and steady almost always wins the race. A few short-term home runs will never compare to a lifetime of base hits, and this is the one concept of investing that Buffett understands and has implemented better than anyone else.

Total consumer credit expanded at an annual rate of 5.3% for January to hit $3.11 trillion, according to a Federal Reserve Consumer Credit report (link opens a PDF) released Friday. 

After expanding at a seasonally adjusted annual rate of 6.2% for December, this month's increase was due exclusively to a 7.5% jump in nonrevolving credit, which includes fixed-payment loans such as car loans, school loans, and any other non-recurring credit.

But January's jump came mostly from government purchases of student loans, according to The Wall Street Journal, hiding an otherwise meaningful dip in revolving credit outstanding.

Revolving credit (no fixed number of payments, e.g., credit cards) fell 0.3% for January. While December's solid 4.3% expansion pointed to increased consumer confidence, this latest number alludes to increasingly careful consumption. 

In absolute terms, analysts had expected a $14 billion increase in overall credit outstanding, while actual numbers came in at $13.7 billion. 

US Total Consumer Credit Outstanding data by YCharts

Ferrari's 458 Italia is one of the world's most coveted sports cars. Ferrari has been taking steps to make them even more exclusive. Photo credit: Ferrari S.p.A.

It doesn't make sense that falling sales could be good for an automaker. Does it?

It does in the crazy world of Ferrari. The hallowed sports-car maker is one of Fiat Chrysler Automobiles'  crown jewels, a steady source of big profits year after year. Last year, profits were up big and revenues hit an all-time high -- but sales totals were down. 

What's the deal? In this video, Fool contributor John Rosevear digs into Ferrari's finances and explains why Ferrari's choice to limit sales -- yes, limit sales -- is a wise move in the long run.

A transcript of the video follows.

John Rosevear: Hey, Fools, it's John Rosevear. We've been talking a lot lately about this new automaker, Fiat Chrysler Automobiles, or FCA. This is, of course, the company that has come into being as a result of the merger of Fiat and Chrysler, and we expect this company's stock to be listed on the New York Stock Exchange sometime in the near future, probably this fall. So it's of increasing interest to U.S. investors, and so we at the Fool have been taking a closer look under the hood at FCA.

One of FCA's most profitable brands -- really, one of the entire auto industry's most profitable brands -- is Ferrari. Now, we all know what Ferrari is, they make what are probably the most lusted after sports cars int the world. But it's interesting to look at Ferrari's finances. Ferrari's profits were up 8% last year to 363.5 million euros, which helped to offset big losses at Fiat. Its revenues were up 5% to 2.3 billion euros. That's just under $3.2 billion, and it's a record for Ferrari.

But what's interesting is that Ferrari's deliveries -- its total number of vehicles sold -- was actually down 5%. Ferrari delivered 6,922 vehicles last year. Now, that drop in total deliveries has led some people to wonder if Ferrari's business is weakening. But there's actually a remarkable back story here. Ferrari has seen rising sales for several years. They've done well in China. In some ways, the brand is more popular than ever around the world.

But Ferrari's management actually had mixed feelings about this. On the one hand, rising sales are good because it should in theory mean more profits, right? But on the other hand, Ferrari Chairman Luca di Montezemolo was said to be concerned that Ferrari was at risk of losing its exclusiveness. For lots of ordinary folks who like cars, spotting a Ferrari somewhere is kind of an event, a treat. If they get too common, they'll just be cars.

Think of a company like Aston Martin, which used to be spoken of as a Ferrari peer, but now Aston has a line of more affordable models and they're a lot more common than they used to be, and some analysts think they've kind of dented their brand. And the concern isn't just that it would undercut Ferrari's brand mystique, but that it might undercut Ferrari's pricing power -- its fat profit margins, which are in the 15% range, and have been even higher at times in the past.

So Ferrari made the decision to cut its production, even though demand for Ferrari's cars was already exceeding supply, and even though the wait for a new Ferrari after you order it is already many months. This should, in time, allow Ferrari to charge even higher prices, boosting its profit margins, while building fewer cars. That's a great move if you can pull it off, and I don't know whether any brand but Ferrari could. Thanks for watching, and Fool on.

Prioritizing savings can be hard when you face multiple demands on your money. For those with kids, deciding whether to save for retirement or for your children's college education can be challenging, but there are good reasons to pick your own retirement first.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at three reasons why saving for retirement first generally makes sense. First, Dan notes that because retirement savings aren't treated as parental assets for financial aid purposes, your child can often get more aid if you put money into retirement accounts. Second, Dan points out that while there are many ways to finance a college education, running out of money in retirement leaves you with few options other than seeking help from family members. Lastly, Dan observes that many people can get rewards for saving for retirement, whether it's through the Saver's Tax Credit or a matching contribution for their 401(k) fund. In the end, it's important to prioritize well, but ideally, you should try to save enough to meet all your financial obligations.

In what looked for all the world like a game of geopolitical chess, with multimillion-dollar pieces of military hardware serving as the pawns, the United States made several military moves to contain the Russian incursion into Crimea this past week. If not necessarily designed to force a military confrontation, these at least seemed to prepare for such an eventuality.

A visual representation of U.S. forces hemming in a Russian advance. Photo: Wikimedia Commons.

However, let's get one thing clear right up front: The U.S. and Russia are not headed for a military confrontation over Ukraine. But you wouldn't know that from how they're acting.

First, we learned that the U.S. had dispatched a force of six Boeing F-15 fighter jets, plus supporting aerial refueling tankers, to Lithuania. Shortly thereafter, it was revealed that a force twice as big -- a dozen Lockheed Martin F-16 fighters -- was headed for Poland, with 300 troops accompanying the planes. And no sooner did that news break than the U.S. confirmed that the guided missile destroyer USS Truxtun was en route to the Black Sea to join a guided-missile frigate, the USS Taylor, already on station there.

Well played. Now watch this. Photo: Wikimedia Commons.

Your move, Mr. Putin
Countering Washington's moves, Russia made a few of its own. First, Russia test-fired an SS-25 Sickle ICBM (!) into a Kazakhstan weapons testing-ground on Tuesday. Then on Thursday, Russia announced the beginning of anti-aircraft defense drills in a testing range 280 miles east of the Ukrainian border. According to RIA-Novosti, this exercise involves "3,500 troops and over 1,000 units of military hardware" -- and will be ongoing for the next month.

Ukrainian government sources report that on Friday, Russian troops began "preparing to install air defense systems" within Crimea itself. And most recently, the Moscow Times reports that Russia's Black Sea fleet has scuttled an old Kara-class cruiser, the Ochakov -- sinking the cruiser in the middle of the channel that gives access to the Ukrainian naval base at Donuzlav Lake. With the channel now blocked, Ukraine's small navy is effectively bottled up and unable to leave port.

Cold War getting hotter ...
Yet despite all the moves and countermoves, I still don't think it likely that this becomes a shooting war. Why not? Quite simply, because the two parties most intimately involved in the Crimean standoff -- Russia and Ukraine -- haven't started shooting at each other. If you agree that the U.S. military moves are designed to back Ukraine's play, it stands to reason that until they start shooting, there's very little likelihood that we would, either.

But that doesn't mean these goings-on have no relevance to U.S. investors.

On Friday, Ukrainian Defense Minister Ihor Tenyuh got on the horn with his U.S. counterpart, Secretary of Defense Chuck Hagel, to discuss the state of affairs in Ukraine and Crimea. Among the talking points, as we learn from Military.com, was a suggestion that the U.S. might assist Ukraine with "technical advice on humanitarian relief and disaster operations." A day earlier, NATO Secretary General Anders Fogh Rasmussen suggested to Ukrainian Prime Minister Arsenii Yatseniuk that NATO, too, might help "build the capacity of the Ukrainian military."

... and defense contracts heating up?
While far from concrete, these developments suggest that defense contracts to beef up the militaries of countries on the Russian periphery may be not far off. Reports that various supporters are lining up as much as $16 billion in financial assistance for Ukraine support this view. I'd bet good money that at least some of this financial assistance finds its way to Ukraine's Defense Ministry.

And not just Ukraine's. In the Baltics, too, folks are getting nervous. Across the whole of Estonia, Latvia, and Lithuania, the combined militaries of the region boast only three L-39 combat aircraft, and a handful of helicopters.

What you see here is -- literally -- one-half of the entire Estonian Air Force. Photo: Wikimedia Commons.

Recognizing this, Lithuanian President Dalia Grybauskaite explained her request for additional U.S. fighter jets this week thusly: "Russia today is dangerous. After Ukraine will be Moldova, and after Moldova will be different countries." Estonian President Toomas Hendrik agrees, warning that "events in Ukraine show that ... Estonia and the [other] Baltic states ... must invest more in our national defense." 

If such improved military strength helps to dissuade further Russian aggression, and preserve peace in Europe, this is a development we all should welcome. And if it happens that this also opens new markets, and brings new revenues for America's defense companies -- that will just be icing on the cake. 

Source: BrokenSphere/Wikimedia Commons

When Urban Outfitters reports earnings for the fourth quarter of its 2013 fiscal year on March 10, what will the outcome be? This is the same type of question that shareholders of most any company ask at least four times a year.

However, unlike in past years, what Urban Outfitters announces for its quarter might carry some added weight. At a time when retailers like Abercrombie & Fitch and Aeropostale are struggling to make ends meet, will Urban Outfitters prove to be the exception, or will it follow their lead?

Mr. Market's set the bar low 
For the quarter, analysts expected Urban Outfitters to report revenue of $928.4 million. This represents an 8% gain compared to the $856.8 million the company reported in the year-ago quarter. At the time of this writing, management has not revealed what the company's quarterly profits were, but they did give investors a glimpse at revenue. For the quarter, Urban Outfitters generated sales of $905.9 million, clearly missing expectations.

According to its preliminary release, management attributed the lackluster sales to a 4% sales decline in its namesake brand. Fortunately, the 12% jump in sales experienced by its Anthropologie brand combined with the 15.5% rise in revenue for the company's Free People brand helped cushion the shortfall.

Source: Urban Outfitters

In terms of profits, analysts expect the company to report earnings per share of $0.55. This is a penny lower than the $0.56 the company reported in the year-ago quarter and likely implies that the increase in revenue has come at the cost of lower margins.

But how does Urban Outfitters stack up to its peers?
Over the past four years, Urban Outfitters has done quite well for itself when it comes to revenue. During this time frame, the company saw its sales rise 44% from $1.9 billion to $2.8 billion. Unfortunately, this growth came at the expense of lower profits for shareholders. Between 2009 and 2012, the company saw its net income inch up only 8% from $219.9 million to $237.3 million, as rising costs ate away at margins.

Just like Urban Outfitters, Abercrombie & Fitch has done quite well for itself over the past few years. Between 2009 and 2012, the company's top line rose a whopping 54% from $2.9 billion to $4.5 billion. Just as in the case of Urban Outfitters, the explosive growth in popularity experienced by the company helped its revenue rise to such heights.

Looking at profitability, though, the two companies couldn't be more different. During this time frame, Abercrombie & Fitch successfully staved off higher costs and saw its net income rise from $300,000 to $237 million. Unfortunately, the business has had a difficult time in 2013, as evidenced by an 11.5% drop in sales accompanied by a 58% drop in net income.

The situation facing Aeropostale has been even worse. Over the past four years, the retailer saw its revenue climb only 7% from $2.2 billion to $2.4 billion. From a profitability perspective, the picture is even less pretty. Over this time frame, Aeropostale saw its net income fall 85% from $229.5 million to $34.9 million, driven by the company's cost of goods sold rising from 62% of sales to 75.3%, while selling, general, and administrative expenses rose from 20.8% of sales to 22.2%.

Foolish takeaway
Based on the evidence provided, it looks like Urban Outfitters has had a nice record of growing sales but has done so at the cost of profits. In the short term, this mind-set makes sense because it allows the business to grow its footprint and gain buying power and supplier power. However, in the long run, this approach likely cannot be sustained, especially as revenue growth begins to slow.

For this reason alone, shareholders should be cautious about the company because if the tide turns, it could prove very costly. On the other hand, the Foolish investor can take solace knowing that Aeropostale's record is far worse than Urban Outfitters, while Abercrombie & Fitch's has been better but is worsening. These developments could allow management to swoop in and grab up more market share over time, which could put money into your pocket if you're patient enough.

Walt Disney reached an agreement with Dish Network on Monday, to end carriage fee disputes that started in September of last year. Among other things, the deal allows Dish to provide Disney's over-the-top services like WatchESPN outside of the typical TV subscription model. In other words, you don't need a satellite installed in order to get ESPN.

The deal opens the door for further progress in true Internet-delivered television. Verizon and Comcast have been steadily making progress toward such a service, but content deals are the biggest roadblock. With this deal between Disney and Dish, we might soon see true IPTV become a reality.

Concessions on both sides
Prior to its deal with Dish, Disney required a pay-TV subscription to gain access to its suite of Watch-apps. It was, however, selective about who it offered the service to, using it as a bargaining chip to drive up carriage fees at the largest carriers. With over 14 million subscribers, Dish certainly qualifies as a large carrier, but has attracted the ire of content owners with its Hopper DVR box.

The Hopper allows subscribers to skip commercials for Primetime television broadcasts on the major networks. With the new deal with Disney, Dish will disable that feature for the first three days after broadcast.

The three days is not arbitrary. It's the period where advertisers will still pay for commercials viewed from recordings. As a result, Disney should see additional revenue from DISH subscribers with, likely, a moderate rise in carriage fees.

It's uncertain how Dish subscribers will react -- the Hopper is one of the service's differentiating factors. The new live and on-demand streaming capabilities may quell the backlash, however.

Opening the door
This is the first time Disney has offered the ability to sell its over-the-top streaming services without a bundled cable subscription. Unfortunately, we're still a long way from a la carte ESPN. The details of the agreement state Dish can offer the over-the-top services "as part of an Internet delivered, IP-based multichannel offering."

Still, this is an early step in securing the rights for such a multichannel IPTV service. Intel tried to develop an IPTV service last year, and unable to secure content rights ended up selling the division to Verizon. Verizon, with its established relationships with content owners through its FiOS TV service, is a much better fit for the service.

Comcast, too, has taken steps to deliver television through the Internet. Its X1 platform includes a cloud-based DVR, which allows for remote storage and delivery, and on-Demand streaming, but its original television signal is still delivered through cable tubes.

IPTV could free up bandwidth, saving cable companies the expenditure of increasing bandwidth with the increased adoption of HD and 4k data streams. Instead of sending every stream through the cable pipe at the same time, IPTV allows for a switch mechanism that lets the cable companies send only the data the user demands at that moment.

Moreover, a stand-alone Internet-delivered service could stave off people ditching cable for over-the-top services like Hulu and Netflix. It's a good defensive move to provide better access to content across all Internet connected devices.

Content is king
Content owners are the biggest thing standing in the way of a complete overhaul of the cable industry. The technology is there and the economics are viable for most of the biggest cable companies. Content owners are hesitant to change their profitable arrangements with cable companies though. Securing rights has been difficult in the past.

Disney's agreement with Dish Network is mostly about ending a carriage fee dispute, preventing a blackout, and ending litigation regarding the Hopper. But the concession by Disney to allow for stand-alone streaming is a big step toward Internet-delivered television.

PetSmart , the leading pet products and services retailer in the United States, has just released its fourth-quarter report to complete fiscal 2013. The results were mixed in comparison with expectations and PetSmart shares initially reacted by moving higher, but their direction has since turned negative. Let's take a deeper look into the report and decide if this weakness is our opportunity to buy or if we should avoid this stock for now.

Source: Motley Fool Flickr

The results 
PetSmart released its fourth-quarter report before the market opened on March 5. Here's an overview of the results and a year-over-year comparison:

Source: Benzinga

PetSmart's earnings per share increased 3.2% and revenue decreased 4.4% year-over-year; however, the fourth quarter of 2012 contained an extra week. On a 13-week comparative basis, earnings per share increased 19.6% and revenue increased 2.9%. Comparable-store sales increased 1.2%, as merchandise and other sales grew 3% and services sales rose 2.6%. Also, gross profit increased 3.8% to $566 million and the gross margin declined 20 basis points to 31.4%. These made for a great set of statistics and the company followed these results by providing a solid outlook on fiscal 2014...

Outlook on the year ahead
In the report, PetSmart also provided guidance for the fiscal year ahead. Here is what it expects to see:

• Earnings per share of $4.42-$4.54, an increase of 10%-12.9%
• Revenue of $7.19 billion-$7.33 billion, an increase of 4%-6%
• Comparable-store sales growth of 2%-4%

Source: PetSmart

Nothing to see here...
PetMed Express  is one of PetSmart's largest competitors, but it lacks growth or the ability to take any more market share. To refresh your memory, PetMed Express does business under the name 1-800-PetMeds, and it operates entirely online and over the phone. This setup gives the company a low-cost way to make sales, but it also makes it difficult for the company to bring in new customers without immense spending on advertising.

Source: 1-800-PetMeds

In PetMed Express' quarterly report on Jan. 21, the company reported that earnings per share were flat at $0.23 and revenue increased 1% to $50.10 million. These statistics do not show a company on the path of growth and they provide proof to support the idea that the company has reached its potential in the market.

The problem with PetMed's business model is that when people buy pet products, especially food and treats, they tend to trust brick-and-mortar stores more due to the recent deaths associated with products manufactured in China. Also, the lack of physical stores restricts the company from accessing the highly profitable services side of the business, such as grooming, boarding, and adoption.

Customers who shop at a PetSmart store can do all of this while knowing that the company monitors all of its products for safety, and more importantly, customers can bring their pets along to interact with others. For these reasons, I would avoid PetMed Express indefinitely and only consider PetSmart as a viable option in retail.

Source: MWI Veterinary Supply

Another way to play pet industry growth
If you are not sold on PetSmart as an investment but you are looking for exposure to the pet industry, take a look at MWI Veterinary Supply . As its name implies, MWI supplies veterinarians with everything that they could possibly need, from cotton swaps and nail clippers to surgical instruments and ultrasound machines. The company released its quarterly results on Feb. 6, so here's an overview of what it accomplished:

Source: Zacks

MWI's earnings per share increased 9.9% and revenue increased 19.9% year-over-year, driven by growth in its new Diagnostics Unlimited program. In addition to the strong results, the company reaffirmed its outlook on fiscal 2013 which calls for earnings growth of 10.5%-14.5% on revenue growth of 23%-25%. MWI represents a great opportunity because as the pet industry grows, so will the demand for pet health care; anyone who owns a pet knows that the pet itself costs very little in comparison with the vet bills you will face to keep the pet healthy. MWI Veterinary Supply is my second-favorite investment option in the pet industry, so take a deeper look if you prefer it over PetSmart. 

The Foolish bottom line
PetSmart has delivered in its fourth-quarter report and pointed toward solid growth in fiscal 2014. The industry leader's stock has reacted by moving lower, but I believe it will turn around and head higher over the course of the year. In addition to possible price appreciation, the company will return cash to shareholders via its healthy 1.2% yield and its current share repurchase program. Foolish investors should strongly consider taking advantage of this weakness by initiating positions right now and holding onto them for several years.

According to BI Intelligence, approximately 22% of the world's population now owns a smartphone, up from just 5% six years ago. In addition, one out of 17 people around the world own a tablet now. Meanwhile, the rate of PC ownership is slowing down, while that of smartphone penetration is accelerating.

Higher smartphone ownership rates will almost inevitably lead to lower smartphone ASPs, or average selling prices. Price competition and emerging market smartphone ownership will lower smartphone ASPs. Lower ASPs will in turn mean lower royalties for companies which collect royalties on smartphone chips such as Qualcomm , Nvidia , Apple, MediaTek, Intel and Broadcom .

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iKang Healthcare could find the going tough in New York with its newly announced plan for a Nasdaq IPO, at least based on the lackluster record for others from China's medical sector. iKang has become the latest in a growing list of Chinese firms lining up for New York listings this year, following its first public filing for a plan to raise up to $150 million. But while most Chinese IPO candidates so far have come from the Internet space, iKang comes from a Chinese health care sector that has failed to generate much interest from US investors despite its huge growth potential.

iKang's arrival to the market comes as a number of other Chinese health care firms are moving in the opposite direction, with at least 2 major companies in the process of privatizing and a third just announcing a major share repurchase to boost its sagging stock. But, all that said, I do still think the right kind of health care company could generate some excitement in the market, and iKang could fit that bill.

iKang has certainly found at least one strong backer in investment banking giant Goldman Sachs, which was an early investor in the company. BofA Merrill Lynch and UBS are underwriting the deal, which is also a good sign as both are top-tier investment banks.

Figures in 2 reports I read differed slightly, but the more detailed report stated that iKang posted revenue of $173 million for the 9 months through December last year, up 50 percent from 2012. . Its profit grew at a similar but slightly slower 42% to $27 million over the same period. The company is in the business of operating clinics, which is a fast-growing sector as China overhauls its health care system to reduce the current reliance on hospitals for most medical care. iKang currently operates a chain of 42 of its own clinics, and another 300 through contracts with third parties, making it one of China's top operators.

Now that we've gotten in all the background, let's look at why this IPO could face some strong resistance but also why it could perform better than some of its peers. The past year has seen 2 firms from China's medical sector launch privatization plans, after their shares languished for years due to lack of investor interest. Drug maker Simcere Pharmaceutical launched its bid a year ago, and clinic operator Chindex last month announced its own similar plan. Similarly, medical device maker Mindray Medical has just announced it is boosting its previous share buyback plan by an additional $100 million, after its original $200 million repurchase program failed to provide much support for its stock.

Despite all that negative sentiment toward the Chinese medical sector, I do think that iKang's IPO could do well for a number of reasons. Its biggest attraction is its leading position in the clinic-operating space, which has plenty of room for profitable growth. By comparison, Simcere operates in the drug development sector, where most purchasing is done by big state-run companies that can command big discounts. The company posted a 17% revenue decline in its latest quarter, as its continuing operations swung to a loss due to stiff competition that sharply squeezed its margins. Mindray's growth is also relatively slow due to its strong dependence on exports for its medical devices, though it's trying to sell more into its faster-growing home market. It also reported an unimpressive 17% growth on the top line in its latest reporting quarter, though its profits grew at a faster 25% clip. But the company acknowledged that even its profit growth would have been half that rate excluding a special tax benefit.

Chindex also operates clinics in China, though its foreign ownership puts it at a distinct disadvantage in the nation's highly protected health care market. The company's struggles showed up in both the top and bottom lines of its latest earnings report, with revenue up a modest 16% while the company reported a nearly 6-fold jump in its net loss to $3.8 million from the year-ago period. At the end of the day, I still think iKang could be a difficult sell due to a relative indifference to the China health care story by western investors. But I do think the company's IPO could enjoy some modest success due to its position as a leader in the high-growth clinic operating sector.

Weather conditions have become a matter of much discussion lately, as the cold and snowy winter in many parts of the country has hurt many companies over the past few months, especially in the consumer sector. You wouldn't have guessed that by looking at companies such as Foot Locker , Boston Beer , and L Brands , though, as they're making no excuses and delivering hot-blooded performance in spite of the harsh weather.

Source: Foot Locker.

Foot Locker has its feet on the ground
Foot Locker was rising by a whopping 8.8% on Friday after the company announced both better-than-expected sales and earnings for its fiscal fourth quarter ended on Feb. 1. Total sales during the quarter grew 4.6% to $1.79 billion, above the average Wall Street estimate of $1.76 billion. Comparable-store sales were also strong during the period, rising by 5.3% year over year.

Management did a sound job of keeping costs under control and increasing sales per square foot, which had a positive impact on profit margins, and earnings during the quarter. Earnings per share came in at $0.81, a big 19% increase versus the same quarter of the prior year and comfortably above the $0.76 average analyst expectation.

The company is implementing a series of initiatives, such as closing unprofitable stores, remodeling other locations, and expanding internationally via franchised stores, and recent performance is confirming that Foot Locker is on the right track.

Management seems quite confident about the future, too: The company is forecasting a mid-single-digit increase in comparable-store sales during fiscal 2014 and a double-digit increase in earnings per share for the full year.

Source: Boston Beer.

Boston Beer for all kinds of weather
Some companies in the consumer business have blamed weather conditions for their lower-than-expected sales lately, and beer is one of the areas that could be expected to be particularly hurt by a cold winter, as consumers could presumably tend toward other alternatives when the climate is especially cold.

However, Boston Beer delivered a refreshingly big increase of 34.2% in revenues to $205.4 million during the fourth quarter of 2013, comfortably beating analysts' estimates of $191 million for the quarter. Core shipment volume grew by 29% during the quarter, and depletion increased by 20% versus the same quarter in the prior year.

Earnings per share came in materially below expectations, though, as the company continues investing heavily to capitalize on its long-term growth opportunities. In the words of CEO Martin Roper:

Given the opportunities that we see, we expect a continued high level of brand investment and capital investment as we pursue growth and innovation. We are prepared to forsake the earnings that may be lost as a result of these investments in the short term as we pursue long-term profitable growth.

Boston Beer is a growth leader in an attractive niche like craft beer, and the company is proving its ability to grow under all conditions, so management is doing the right thing by investing for long-term growth as opposed to focusing too much on current profitability.

Source: L Brands.

L Brands is still in fashion
Most clothing and apparel retailers have been complaining that their customers don't feel like facing the chilly weather to go shopping. But L Brands is uniquely positioned in the industry thanks to the popularity and high customer loyalty Victoria's Secret enjoys, and recent performance is conforming that soundness.

L Brands suffered a slowdown in December, but performance picked up in January with a big 9% increase in comparable sales at the company level, fueled by a 10% jump in comparable-store sales at Victoria's Secret. As for February, things look much more stable but still strong, with a 2% increase in comparable sales both at Victoria's Secret stores and on a total company level.

Management seems quite confident about the future, judging by capital distributions. The company announced an increase of 13% in regular dividends on Feb. 3, complemented by a special dividend of $1 per share. 

This marks the company's 157th consecutive quarterly dividend, so L Brands has proved that it has what it takes to reward shareholders with consistent cash payments through all kinds of weather.

Bottom line
Even subpar companies can do well when the skies are clear and industry conditions are favorable, but it takes a well-run business to deliver sound performance in a challenging scenario. Foot Locker, Boston Beer, and L Brands are successfully sailing through the storm, and that's a positive reflection on the business quality and management skills at these companies.

It wasn't long ago there were concerns about how Facebook would continue its stellar top-line growth. The fear, and it was a legitimate one, was that Facebook users would get inundated with a tidal wave of advertisements. It's a fine line, balancing the need for revenue growth to placate shareholders, without undermining the Facebook experience and alienating users.

As it turns out, CEO Mark Zuckerberg had other plans for continuing Facebook's outstanding growth that didn't require more ads, and based on some recent data, it appears those plans are working even better than expected.

The plan
Zuckerberg's objective of turning Facebook into a mobile giant is working in a big way, but it's the speed of the transition that's been truly impressive. Last year says it all: Of Facebook's 1.23 billion monthly average users at the end of 2013, 945 million were mobile -- a 39% jump from the prior year.

The end of 2013 also saw the introduction of Facebook's long-awaited video advertising alternatives. Just how big is video advertising? Some analysts estimate that Facebook will generate $8.4 billion in annual revenue from its video ads once they're up and running.

In addition, Facebook advertising works because of user data -- lots and lots of user data. The result is that Facebook is able to charge more for its ads, so overwhelming its users with an unending number of spots isn't necessary to continue growing revenues. Opting for quality over quantity is a success, for both Facebook and its users.

When a plan comes together
Traditional advertising is good, but long-term revenue growth is even more likely now that marketers view Facebook as more than an advertising machine. Facebook is becoming a primary tool for companies to build branding, public relations, and customer relationship management partnerships with consumers, and that changes everything.

As analysts from Stifel Financial's equity trading desk describe it, "marketers [now] view Facebook as a strategic communications platform, capable of establishing and reinforcing relationships with consumers." The result is that going forward, Facebook is expected to get an even bigger piece of companies' marketing budget.

And that's not all. With the change in how Facebook is being viewed, and utilized, by marketers, comes an ancillary benefit: Building long-term, profitable relationships with Facebook's ad clients. Driving a successful branding campaign, for example, requires a long-term commitment from a company. An ad running for a couple of weeks pushing the latest, greatest widget is nice, but that doesn't necessarily result in sustaining revenue growth over the long haul.

With the subtle shift in how marketers are using Facebook taking hold, particularly in conjunction with Facebook's emphasis on mobile users, incorporating video, and continuing to grow and utilize its mountains of user data, questions about Facebook's growth become moot. And that should have investors cheering, even after Facebook's extraordinary 151% jump in share price the past 12 months, nearly 28% of that coming this year alone.

Final Foolish thoughts
Concerns that Facebook will be able to maintain its upward user and revenue trends were certainly valid. But based on feedback from the folks who matter most when it comes to Facebook's growth -- the heads of large marketing departments -- the future is looking good for Zuckerberg and team. Yes, Facebook is trading at more than 114 times trailing earnings, but that shouldn't scare off investors. At only 41 times forward earnings, Facebook still makes a nice addition to most any mid- to long-term growth portfolio.

Verizon CEO Lowell McAdams told investors on Tuesday that the company is in talks with content providers to deliver web-based TV programming to mobile devices. This comes just one day after Walt Disney agreed to allow Dish Network to sell its live Internet streaming services as part of an Internet-based IPTV bundle.

Internet-delivered television is still out of reach for many of the larger pay-TV providers, but Verizon could certainly benefit the most from securing rights to stream live TV anywhere.

Fits with recent acquisitions
Verizon made two big acquisitions recently: EdgeCast and OnCue.

EdgeCast is a CDN provider that moves data closer to the end user to provide for faster delivery. In essence, it makes sure there's no lag in your video stream. Verizon had previously used third-party and in-house CDNs to deliver content across the country, but bringing EdgeCast in-house will certainly cut down costs as it delivers more data.

OnCue is a pay-TV project started by Intel. It's unique in that it was essentially built for Internet-delivered TV from the ground up. After struggling to acquire the necessary content rights, Intel sold it to Verizon.

Both acquisitions naturally feed into delivering television over the Internet -- true IPTV. If Verizon can secure the rights to deliver programming over the Internet via mobile devices, it could also mean the company can take full advantage of these recent acquisitions through in-home IPTV service.

As a result, Verizon would be able to expand its FiOS or OnCue service nationwide, reaching a much larger audience. Currently, Verizon only offers FiOS to about 15 million households.

Competitive advantage in mobile
The real breadwinner for Verizon, of course, is wireless. Verizon Wireless accounts for about two-thirds of Verizon's total revenue.

The wireless market is becoming much more competitive. T-Mobile has seen success with its UnCarrier initiative, successfully attracting new subscribers. While most are defecting from Sprint and AT&T, Verizon is not immune to T-Mobile's advances.

Providing web-based television delivery through its wireless network will allow Verizon to attract more high-value subscribers and extract more value from its current subscribers.

IPTV is coming
Many cable operators have been pushing for IPTV for sometime. IP delivered television has the advantage of a switch mechanism that allows cable operators to send just the data the subscriber is requesting. This reduces the need to expand bandwidth as data streams increase in size with HD and SuperHD content.

Dish Network's deal with Disney may allow it to sell television service to users without having to mount a satellite dish on their roofs. This opens up a larger market for the company, including apartment dwellers, and saves on installation costs that the company usually eats in order to sign up new subscribers.

Disney, for its part, was able to use the content rights to get what it wanted from Dish -- removal of the AutoHop feature from the Hopper (for ABC) and an agreeable carriage fee for its bundle of channels. Because content owners hold the upper hand here -- delivery through cable or over the Internet doesn't matter that much to them -- they may hold out for added benefits or a higher price.

For example, OnCue automatically stores everything that aired over the past three days on a cloud server in case a subscriber wants to watch it later. As part of a deal with content owners to receive IPTV rights, Verizon may have to disable fast-forwarding through commercials for three days -- the period advertisers still pay per commercial view.

Not to be outdone
The deal between Dish and Disney sets a precedent for other content providers to offer Internet-delivered television. Verizon wants to take it a step further and offer television programming everywhere. There will be some high costs associated with such a service, but Verizon is in a strong position to leverage those rights with its recent acquisitions and widespread wireless network.