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Elections, hurricane damage and more: Here are four factors that will shape holiday shoppers' purchases

suimt — Sat, 19 Oct 2024 13:00:01 +0000

A Macy’s store is seen at Herald Square on December 11, 2023 in New York City.

Michael M. Santiago | Getty Images

Inflation may have cooled, but retailers are still staring down a holiday season with plenty of uncertainty.

Several hard-to-predict factors will influence consumers’ spending, as they deck the halls and look for the perfect gifts. Volatile weather, election distraction and a deal-hunting mindset may shape the season. And fewer days between Thanksgiving and Christmas than last year will put shoppers on the clock.

Yet there’s reason for optimism for retailers: Shoppers are feeling more upbeat and plan to spend more compared with last holiday season, according to an annual survey by consulting firm Deloitte and a separate forecast by the National Retail Federation.

Holiday spending in November and December is expected to increase by 2.5% to 3.5% compared with 2023 and range between $979.5 billion and $989 billion, according to the National Retail Federation. That’s a more modest increase than the 3.9% year-over-year jump from the 2022 to 2023 holiday season, when spending totaled $955.6 billion. The NRF’s figure excludes automobile dealers, gasoline stations and restaurants.

Shoppers expect to spend an average of $1,778 on the holidays this year, 8% more than last holiday season, according to consulting firm Deloitte’s survey. The survey, which included about 4,000 consumers and was conducted in late August and early September, attributed that spending increase to a more favorable economic outlook, a perception among respondents that prices would be higher and more willingness to spend among higher-earning households with an annual income of between $100,000 and $199,000.

Low unemployment, a return to more typical inflation levels and a recent Federal Reserve interest rate cut are lifting consumers’ spirits, said Stephen Rogers, managing director of Deloitte’s Consumer Industry Center.

“People are still in a better frame of mind, despite the political chatter,” he said. “When they look at their bank account and think about what their financial situation is, they feel better.”

People shop (L) ahead of Black Friday at a Walmart Supercenter on November 14, 2023 in Burbank, California.

Mario Tama | Getty Images News | Getty Images

Home Depot, which sells a wide range of holiday decor including Santa-themed throw pillows and a giant animated reindeer for yards, the high demand for decor could be an opportunity. Yet the home improvement retailer said it’s prepared for consumers to seek value, too.

This holiday season, Home Depot bought more low-priced artificial Christmas trees, such as a prelit tree that sells for $49, said Lance Allen, senior merchant of decorative holiday for the home improvement retailer.

Signs showing support for both Democratic presidential candidate Vice President Kamala Harris and Republican presidential candidate former President Donald Trump sit along a rural highway on September 26, 2024 near Traverse City, Michigan.

Scott Olson | Getty Images News | Getty Images

Walmart and SharkNinja, that are hoping shoppers will browse and buy rather than become glued to the news. The election is on Nov. 5, and it could take days for a winner to be called if the race between Vice President Kamala Harris and former President Donald Trump ends up as close as polls suggest.

SharkNinja CEO Mark Barrocas described the election as the “biggest unknown” that will shape the holiday season.

“It may be a blip and it may be nothing, and it may disrupt things for a few weeks if the news cycle is all-consuming,” he said. “Christmas is going to come and there will be a holiday season. It’s just a matter of how many distractions there are.”

He said the election and the news cycle around it may also influence how consumers feel about the economy.

Walmart’s internal research suggests “an uptick in positivity” as its shoppers enjoy the fall and get ready for Halloween, said Jen Acerra, vice president of customer insights and strategy at Walmart.

“The one thing that is still out there and moving is what’s going to happen with the election, and what happens with the election will really determine if this is something that stays positive or not,” she said.

Already, some companies have blamed the election for taking a bite out of their sales. Amazon chalked up a weak forecast in August to election distraction that would dampen demand for online shopping, a comment some mocked as an excuse.

Delta Air Lines‘ CEO, Ed Bastian, said in a CNBC interview this month that the company expects lower demand before and after the election to hit the carrier’s revenue.

“Consumers will, I think, take a little bit of pause in making investment decisions, whether it’s discretionary or other things,” he said. “I think you’re going to hear other industries talking about that as well.”

After Hurricane Milton hit Florida, the city of Clearwater was flooded. Search and rescue operations are ongoing in the area.

Lokman Vural Elibol | Anadolu | Getty Images

Hurricane damage and winter temperatures

For retailers, cooler and wintery weather is always on the Christmas wish list.

Weather can tip shoppers into the holiday spirit and get them in the mood to buy thicker sweaters, coats and gifts, said Evan Gold, executive vice president for Planalytics, a Philadelphia-based company that advises retailers on weather-related inventory planning.

“There’s no external factor that influences consumers’ purchases as directly, frequently and immediately as the weather,” he said.

This year, the early fall got off to a rockier start. The now unofficial kickoff to the holiday shopping season marked by October sales events coincided with unseasonably warm temperatures in San Francisco and other parts of the country, and severe hurricanes that battered North Carolina and Florida. That makes shoppers less likely to want to buy sweaters, coats and artificial trees.

Yet the weather this year should eventually help retailers, Gold said, since November and December temperatures are expected to be colder than a year ago. He said the shift in weather, such as a dusting of snow or a cold snap, can help signal shoppers to get ready for the season.

Many families will just be trying to rebuild from hurricane damage rather than buying holiday gifts, which could redirect money to furniture, clothes or home repairs, Jack Kleinhenz, the NRF’s chief economist, said on a call with reporters.

“It’ll be just an adjustment in their budget in what they’ll be spending for, but it’s really too early to know the full impact on retail,” he said.

Home Depot expects that, too. It pulled holiday product out of 124 of its big-box stores to make room for items that hard-hit areas need, such as shingles and drywall, Allen said. Instead, he said, it plans to sell a more limited assortment in those stores of items such as wreaths and its top-selling trees.

“They’re trying to rebuild and recover their houses,” he said. “So obviously, they’re not going to go buy a nine-foot reindeer and put that out there.”

A shorter holiday season

Thanks to the calendar, the holiday rush may be on overdrive.

Shoppers will have five fewer days between Thanksgiving and Christmas this year compared with last year — which could dampen spending or potentially motivate time-pressured shoppers to seek out rush shipping, curbside pickup or other quicker options to get gifts.

The pressure will be on retailers to make the most of each day and to deliver on convenience, as shoppers race to get what they need and expect items to arrive within a few hours or at minimum, within a few days, said the NRF’s Shay.

“A shorter period does have consequences and implications and one of those, of course, is that the shipping season will be shorter,” he said.

On a recent store tour, Kohl’s Chief Marketing Officer Christie Raymond said the retailer expects it will have to work harder to woo customers, especially lower- and middle-income shoppers, who have felt pinched by the cumulative effect of inflation and crunched for time.

“We think they’re feeling more squeezed than last year,” Raymond said. And, she added, shoppers have also said they are “feeling time-squeezed.”

To appeal to those consumers, Kohl’s wants to have more of what they need, Chief Merchandising and Digital Officer Nick Jones said.

The retailer has bulked up its offering of gift items, added more party dresses and started to sell a wider range of decorations, including Christmas trees, lawn ornaments and wrapping paper.

“We want to be a holiday destination,” he said. “We haven’t got the food, but we’ve got everything else.”

Stellantis to shutter and sell large testing facility amid cost-cutting efforts

suimt — Fri, 18 Oct 2024 21:54:14 +0000

Carlos Tavares, chief executive officer of Stellantis NV, speaks to the media at the Stellantis auto manufacturing plant in Sochaux, France, on Thursday, Oct. 3, 2024.

Nathan Laine | Bloomberg | Getty Images

DETROIT — Automaker Stellantis plans to shutter and sell its large vehicle proving grounds in Arizona at the end of this year, CNBC has learned.

The decision is the latest cost-cutting measure by the trans-Atlantic automaker under CEO Carlos Tavares, who has been increasingly under pressure from Wall Street, dealers and the United Auto Workers union amid the company’s lagging financial performance, layoffs and overall business decisions.

The Arizona Proving Grounds covers 4,000 acres between Phoenix and Las Vegas in Yucca, Arizona. It has been used for vehicle testing and development for the automaker since then-Chrysler purchased the property for $35 million from Ford Motor in 2007.

The closure was confirmed by three people familiar with the plans who agreed to speak on the condition of anonymity because the matters are private.

Stellantis plans to use a proving grounds in Arizona owned by Toyota Motor beginning next year, according to two people familiar with the decision. Toyota opened its operations, which are costly to maintain, for other companies to use in 2021.

Stellantis Chrysler Arizona Proving Grounds

Source: Google Earth

Stellantis confirmed the closure Friday morning, citing the company’s ongoing cost-cutting and real estate evaluations.

“Stellantis continues to look for opportunities to improve efficiency and optimize its footprint to ensure future competitiveness in today’s rapidly changing global market,” the company said in an emailed statement.

The automaker also said it is “working with the UAW to offer proving ground employees special packages or they can choose to follow their work in a transfer of operations” but that employees could be placed on an “indefinite layoff, which would entitle them to pay and benefits for two years.”

Stellantis said 41 employees currently work at the Arizona Proving Grounds, including 37 hourly workers represented by a local chapter of the UAW.

The UAW, which has been increasingly critical of Tavares and such layoffs, did not respond for comment on the planned closure.

Stellantis, like most automakers, has several proving grounds in different climates and geographies to develop and test vehicles ahead of selling them to consumers. Stellantis’ other major U.S. proving grounds facility is a 4,000-acre campus located west of Detroit in Chelsea, Michigan.

Stellantis’ complex in Arizona was one of 18 facilities the company notified the UAW it could potentially close during the union’s contract negotiations last year with Stellantis.

A majority of the other operations were parts and distribution centers that were expected to be consolidated into “mega sites,” as well as the company’s massive 500-acre campus in metro Detroit formerly used as Chrysler’s world headquarters.

The status of the other properties was not immediately clear, however, local and state politicians, including Michigan Gov. Gretchen Whitmer, have expressed concerns that Stellantis could move to shutter the former headquarters in Auburn Hills, Michigan.

Stellantis has significantly reduced the number of its U.S. employees in recent years amid Tavares’ cost-cutting measures.

Stellantis has reduced employee head count by 15.5%, or roughly 47,500 employees, between December 2019 and the end of 2023, including a 14.5% reduction in North America, according to public filings. That doesn’t include further head count reductions and layoffs this year.

The automaker had only about 11,000 U.S. salaried employees at the end of last year. That compared with 53,000 at General Motors and 28,000 at Ford.

The reductions have occurred as Stellantis has attempted to outsource many engineering efforts to lower-cost countries such as Brazil, India and Mexico, according to several people familiar with the moves.

Bloomberg News earlier this year reported that Stellantis moved to recruiting a majority of its engineering workforce in those countries, where the cost per employee amounts to roughly €50,000 ($53,000) or less per year — far less than similar positions in the U.S. and Europe.

Embraer CEO says jet maker studying possibilities for a new aircraft

suimt — Fri, 18 Oct 2024 21:26:15 +0000

Embraer CEO Francisco Gomes Neto speaks during the Embraer Media Day 2022 at the aircraft factory in Sao Jose dos Campos, Brazil, May 30, 2022.

Carla Carniel | Reuters

Brazilian plane maker Embraer is studying the market and new technology that could warrant it building an all-new jet, CEO Francisco Gomes Neto told CNBC.

A new airplane could help the airplane manufacturer compete with much larger rivals Airbus and Boeing, which deliver hundreds of jets a year compared with Embraer’s dozens of aircraft.

But Gomes Neto noted that no decisions have been made yet.

“At this point in time, we don’t have concrete plans to go to a big narrow body,” he said, adding that the studies for new engine technologies, avionics and potential demand are “to be prepared.”

In the meantime, Gomes Neto said Embraer is focused on improving results and selling its regional planes, which won orders earlier this year from American Airlines, manufacturing its E2 jet, and “delivering what we promise” customers.

Embraer said Friday that it delivered 16 commercial jets in the third quarter, up more than 5% from a year earlier. Including its defense and business jets, the company handed over 57 jets in the period, a third more than last year.

An Embraer E195E2 aircraft

Frederic Stevens | Getty Images

The Federal Aviation Administration approved a freighter version of its E190 passenger-to-freighter converted jet earlier this month, helping clear the way for its commercial introduction.

“This is maybe the advantage we have: We have a great product [that’s] available,” Gomes Neto said.

Both Airbus and Boeing are struggling to ramp up production and deliver aircraft on time in the wake of the pandemic. Boeing has the added challenges of a safety crisis and a machinist strike.

Boeing once had plans to take control of Embraer’s commercial jet business but ended those discussions in early 2020. Last month, Embraer said Boeing would pay it $150 million over the scuttled plan.

Like its competitors, Embraer is facing supply chain strains coming out of the pandemic, and the company is taking a more in-depth look at delivery capabilities.

Engines, hydraulic valves, cabin interiors and components for them are some of the areas where it has been difficult to ramp up production from suppliers, Gomes Neto said. He added that he expects supply chain problems will likely ease in 2026.

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Spirit Airlines extends debt refinancing deadline hours before expiration

suimt — Fri, 18 Oct 2024 20:42:13 +0000

A Spirit Airlines aircraft undergoes operations in preparation for departure at the Austin-Bergstrom International Airport in Austin, Texas, on Feb. 12, 2024.

Brandon Bell | Getty Images

Spirit Airlines on Friday said it reached an agreement with its credit card processor to again extended a debt refinancing timeline to December, hours before it was set to hit its deadline.

Spirit said in a filing late Friday that earlier this week it drew down the entirety of its $300 million revolving credit facility and expects to end the year with just over $1 billion in liquidity.

“As previously disclosed, the Company remains in active and constructive discussions with holders of its senior secured notes due 2025 and convertible senior notes due 2026 with respect to their respective maturities,” Spirit said in a filing late Friday.

The deadline was previously set in September and had been extended until Oct. 21 before the Friday change. The airline’s stock closed at a new low Friday, down roughly 3%, at less than $1.50 per share.

The Miramar, Florida-based airline has furloughed workers, slashed its schedule and deferred aircraft deliveries to save cash over the past year.

Many of its planes have been grounded because of a Pratt & Whitney engine recall. It has also reported weaker-than-expected bookings and its planned acquisition by JetBlue Airways was scuttled after getting blocked by a federal judge on antitrust grounds.

Its shares have tumbled more than 90% so far this year and nearly 40% so far in October alone.

Earlier this month, The Wall Street Journal said the carrier is considering a bankruptcy filing. Spirit and advisor Perella Weinberg Partners did not immediately comment on the matter.

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Starbucks taps former Chipotle executive as global chief brand officer

suimt — Fri, 18 Oct 2024 19:25:54 +0000

Tressie Lieberman, the incoming global chief brand officer at Starbucks.

Courtesy: Starbucks

Starbucks has tapped Chipotle alum Tressie Lieberman as its global chief brand officer, a newly created position and the latest executive change under Brian Niccol after he left Chipotle and took over as CEO of the coffee chain last month.

In Niccol’s first week on the job at Starbucks, he outlined his plan for turning around the chain’s slumping sales in the U.S. For the past three quarters, Starbucks has reported same-store sales declines for its home market as its occasional customers buy fewer macchiatos and Refreshers.

Among four top priorities Niccol described in his plan was improving the company’s branding. He wants to remind customers about the chain’s coffee expertise and its special coffee-shop experience, according to his open letter.

“Starbucks is a brand people love. It’s time to tell our story again and reintroduce Starbucks to the world. Tressie is the perfect person to help us do that. She has a proven track record of building strong brands, developing compelling products, creating great customer experiences, and leading breakthrough marketing,” Niccol said in a statement on Friday.

Niccol created a similar global chief brand officer role at Chipotle when he took over there in 2018.

Lieberman will start at Starbucks on Nov 4. and report to Niccol.

Most recently, she served as chief marketing officer for Yahoo. Prior to that role, she was vice president of digital marketing and off-premise at Chipotle between 2018 and 2023. She also overlapped with Niccol when both executives were at Pizza Hut and Taco Bell, which are owned by Yum Brands.

In addition to Lieberman’s hiring, Starbucks said Friday that Dawn Clark, the company’s executive creative director, and Angele Robinson-Gaylord, who leads store development, will now report to Sara Trilling, Starbucks’ president of North America.

The company is also unifying its global communications and corporate affairs departments into a single team.

Previously, Starbucks announced that Michael Conway, the company’s North America CEO, was retiring. Niccol’s predecessor Laxman Narasimhan had appointed Conway to the role last year. After his departure, the company eliminated the position, instead adding Lieberman’s new role. Trilling also now reports directly to Niccol.

In China, Molly Liu is now the sole CEO, after splitting the position with longtime leader of that unit, Belinda Wong, since last year.

Starbucks’ China business has been struggling, hurt by the country’s sluggish economy and the proliferation of local coffee chains that can undercut its prices. Last quarter, the company’s same-store sales slid 14% in China, its second-largest market.

Before his ouster, Narasimhan had said that Starbucks was in the early stages of exploring strategic partnerships for its China business.

Niccol is expected to share more details on his turnaround plans during the company’s fiscal fourth-quarter earnings call on Oct. 30.

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Diamond Sports, FanDuel reach naming rights agreement for regional sports networks

suimt — Fri, 18 Oct 2024 18:31:07 +0000

Pavlo Gonchar | Lightrocket | Getty Images

More change is coming to Diamond Sports’ regional sports networks.

The company said in court papers filed Tuesday that it reached a naming rights deal with Flutter-owned FanDuel, which will rebrand the Bally Sports channels just as the National Hockey League season has started and the National Basketball Association’s 2024-2025 season is less than a week away.

Diamond Sports said in the filing that if it is able to emerge from bankruptcy protection, FanDuel will be a “long-term naming rights partner.” The new naming rights agreement would also give FanDuel the right to buy up to 5% of equity in the reorganized company and get performance warrants for up to 5% of equity.

The agreement was approved by a bankruptcy judge Friday afternoon despite an attorney for MLB raising some concerns with what he said was a lack of information about the structure of the term sheet.

The MLB wanted more information on the deal structure because of the association of its content with sports betting, MLB’s attorney James Bromley said at the hearing.

Joseph Graham, an attorney representing Diamond Sports, said the agreement still forces both parties to follow all the existing league rules on gambling.

The judge ended the hearing by urging the legal representation for Diamond Sports to show MLB and any other interested parties a redacted term sheet to alleviate their concerns.

“A large cohort of FanDuel customers are devoted RSN viewers and this agreement allows us to further cement the FanDuel brand with sports fans and provides a unique vehicle to reward our users,” Mike Raffensperger, FanDuel Group’s president of sports, said in a company release shortly after the hearing concluded.

The launch under the FanDuel Sports Network brand will officially happen Monday across all of Diamond’s 16 regional sports networks. There will be different names depending on the region.

Friday’s court hearing was also the first time that Diamond Sports or the MLB said the Miami Marlins and Diamond were close to an agreement.

A spokesperson for the Miami Marlins declined to comment or confirm.

Earlier this month, Diamond Sports said it was planning to drop all of its MLB teams except for the Atlanta Braves for the 2025 season. The existing teams’ contracts are in various stages with Diamond Sports, but in total, the company would see 11 MLB teams exit.

A Diamond Sports attorney said in court earlier this month that dropping these teams “is not our preferred path.”

Three of those 11 teams will have their games produced by MLB next season, according to a league release.

The new partnership will allow Diamond Sports to get one step closer to emerging from bankruptcy and will give FanDuel, which is already the top sports betting company by market share, even more exposure.

In Tuesday’s court papers, Diamond said that while discussions with FanDuel began in February, it waited until it finalized agreements with the NBA and NHL to negotiate the final terms of the naming rights deal. A FanDuel representative declined to comment beyond the filings, and the specific financial terms of the agreement were not disclosed.

Diamond Sports said in court papers it considered FanDuel “an attractive potential partner … due to the high degree of alignment” between the regional sports networks and the online gaming business.

Fox Corp.’s assets, Disney had to divest the networks in order to gain regulatory approval. Disney offloaded the networks, still under the Fox Sports banner, in 2019 to Sinclair. A naming rights deal was later signed with gaming company Bally’s Corp.

The Bally’s Corp. agreement ended as part of the settlement that came earlier this year between Diamond Sports and Sinclair.

Diamond, which remains an independently run, unconsolidated subsidiary of Sinclair, alleged in the lawsuit that Sinclair’s ownership exacerbated its problems. Sinclair did not admit wrongdoing.

Diamond Sports filed for bankruptcy protection last year. Since then, Diamond’s restructuring has been filled with back-and-forth discussions with the NBA, NHL and Major League Baseball as the debt-saddled company has attempted to emerge from bankruptcy.

Diamond Sports has said in court papers that based on financial projections, it hopes to emerge from bankruptcy as early as December.

Throughout the bankruptcy proceedings, teams across all three leagues have been exiting the networks and flocking to different local viewing options for their fans.

Several MLB teams, including the San Diego Padres and Arizona Diamondbacks, left the regional sports networks in 2023, and the MLB has produced the teams’ local games since then.

Some NBA teams that have left the regional sports networks have turned to local broadcast stations to air local games. The NHL’s Dallas Stars and Anaheim Ducks have launched over-the-top streaming partnerships with Victory+, a sports streamer owned by Canada-based A Parent Media Co., for their local viewing.

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Watch maker Patek Philippe launches first new collection in 25 years

suimt — Fri, 18 Oct 2024 17:20:20 +0000

Introducing the new Patek Philippe Cubitus line.

Courtesy: Patek Philippe

Storied Swiss watch maker Patek Philippe announced its first new collection in 25 years this week, dubbed the Cubitus line.

The new collection comes at a time when luxury watch prices have largely stabilized, fueled by strong demand. Younger investors and collectors began buying up luxury time pieces during the Covid-19 pandemic, but secondhand prices have more recently slumped.

The new lineup from Patek Philippe includes three different models — two in steel casings and one in platinum — and is meant to “offer a new reinterpretation of the ‘elegant sporty’ style,” according to a press release. The two steel versions, one two-toned with rose gold to create a more vintage feel and the other purely steel, play into the line’s sporty inspiration and feature colorful faces.

The third model separates itself with a platinum casing and different face design, including a large-format date and a dial tracking the moon phase and the day of the week.

Patek Philippe said it incorporated new technologies in the watches, ranging from an ultrathin and self-winding mini rotor to an instantaneous-jump mechanism that ensures the different displays match up within 18 milliseconds. The brand said it has filed six patent applications for the new tech.

Patek Philippe’s new collection also includes new cufflinks, designed to match the watches with a white-gold frame that reflect the case’s shape.

Patek Philippe, founded in 1839, is often referred to as one of “The Holy Trinity” in watch making, along with Audemars Piguet and Vacheron Constantin.

The brand’s last new collection before the Cubitus line was back in 1999 when it released the Twenty~4 design. That lineup was “dedicated to the young, active and modern woman,” according to Patek Philippe’s website.

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Procter & Gamble earnings beat estimates, but weak demand in China hurts sales

suimt — Fri, 18 Oct 2024 16:12:57 +0000

Procter & Gamble on Friday reported weaker-than-expected revenue as lower demand in China again weighed on its sales.

The company’s organic sales in Greater China, its second-largest market, fell 15% in the fiscal first quarter. As home prices drop and jobless rates rise in the country, shoppers have pulled back their spending, hurting P&G’s sales for shampoo, diapers and other consumer staples.

While executives maintained their confidence in China long term, demand isn’t expected to recover for at least several more quarters.

“The market continues to be weak and will be weak, we believe, for a number of quarters to come,” CFO Andre Schulten said on a call with the press.

P&G’s outlook for China didn’t take into account the Chinese government’s recently announced plans to boost the country’s economy.

Shares of the company fell roughly 1% in morning trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: $1.93 adjusted vs. $1.90 expected
Revenue: $21.74 billion vs. $21.91 billion expected

P&G’s net sales dropped 1% to $21.74 billion. Organic revenue, which strips out foreign exchange, acquisitions and divestitures, rose 2%, helped by higher prices.

The company reported flat volume for the quarter. The metric excludes pricing, which makes it a more accurate reflection of demand than sales. Like many consumer companies, P&G has seen demand for its products fall after several years of price hikes. Last quarter was the first time in more than two years that its volume increased.

In the U.S., P&G’s volume grew in eight of its 10 categories, and the company isn’t seeing any trade down to private-label products, Schulten said.

But it’s a different story in Greater China, which saw its organic sales worsen compared with the prior quarter. The company called out volume declines in China for both its hair care and oral care segments. Still, Greater China accounts for less than 10% of P&G’s revenue.

“The issues around Asia and execution are pretty minimal compared to some of the other rough spots that the company’s gone through in the past,” said Charles Rinehart, chief investment officer of Johnson Investment Counsel, a longtime shareholder in Procter & Gamble.

P&G’s beauty business, which includes brands like Pantene and Olay, saw volume fall 2% in the quarter. In particular, its skin care segment struggled, with organic sales tumbling more than 20%. P&G blamed the steep decline on lower volume and decreased sales of its pricey SK-II brand, which has struggled ever since pandemic lockdowns. Anti-Japanese sentiment in China has been the latest challenge for the brand; last year, SK-II sales took a hit as Chinese consumers boycotted the brand, fearing that Japan’s release of treated radioactive waste would contaminate the products.

Both P&G’s health care and baby, feminine and family care divisions reported 1% declines in volume for the quarter. But its baby care segment, which includes Pampers diapers, had an even worse quarter, with its organic sales falling by mid-single digits. As the global birth rate continues to drop, P&G has turned to pushing consumers to buy more expensive baby care items, like its Pampers Premium diapers, to grow sales. But that strategy can’t always make up for declining volume.

P&G’s grooming division, which includes Gillette and Venus, reported 4% volume growth. The company credited innovation for its strong performance.

The company’s fabric and home care business saw volume rise 1% in the quarter. The division includes Swiffer, Febreze and Tide products.

P&G reported fiscal first-quarter net income attributable to the company of $3.96 billion, or $1.61 per share, down from $4.52 billion, or $1.83 per share, a year earlier.

Excluding restructuring charges and other items, the company earned $1.93 per share.

P&G reiterated its fiscal 2025 forecast. It anticipates core net earnings per share in a range of $6.91 to $7.05 and revenue growth of 2% to 4%.

'Joker: Folie a Deux' is this year's latest box-office flop. Here's what else has disappointed

suimt — Fri, 18 Oct 2024 14:15:54 +0000

Joaquin Phoenix stars as Arthur Fleck in “Joker: Folie a Deux.”

Warner Bros.

Warner Bros. took a big swing with “Joker: Folie a Deux.” It’s turned into a big whiff.

After the billion-dollar success of “Joker” in 2019 on a shoestring budget of just $55 million, the studio greenlit a sequel, offering director Todd Phillips a substantially larger budget of $200 million. As of Wednesday, the film has garnered just $53.8 million domestically, according to Comscore. Its global haul stands at $166 million as of Sunday with updates expected over the weekend.

Panned by critics and audiences, “Joker: Folie a Deux” is not expected to recoup much of its lofty production budget or the additional $100 million in estimated marketing and distribution costs by the end of its theatrical run.

And it’s not the only blockbuster-budgeted film to disappoint at the box office this year.

Other studios, including Warner Bros., Universal, Lionsgate and even Sony, have dropped hundreds of millions of dollars on franchise features and star-studded ensembles — only to see ticket sales sputter.

Of course, it’s not an unusual occurrence in the theatrical industry.

“A combination of hits and flops are a hallmark of every box office year,” said Paul Dergarabedian, senior media analyst at Comscore. “But, 2024, being subject to a variety of unique challenges to both film production and the release calendar, created an imperfect storm that led to a series of creative misfires and financial failures.”

Additionally, as Hollywood contends with a growing streaming market and a more fickle moviegoing public, these misfires could worry investors.

“Before the rise of streaming, assessing a film’s financial performance was seemingly clearer cut than it has become in recent years,” said Shawn Robbins, director of analytics for Fandango’s movie division.

Because of streaming, Hollywood has shortened the theatrical window, bringing movies to the home market much faster than before. This means that potential moviegoers, who might be on the fence about seeing a movie or seeing it quickly, have a shorter time to wait before they can view it from their couch on a streaming service to which they already subscribe. And if that movie has poor reviews, audiences have even less incentive to go out to cinemas.

“In turn, this shift in dynamics and business models might call into question what kind of box office-to-budget ratio constitutes a loss and what doesn’t,” Robbins noted. “Some numbers are easier to eyeball and identify as a financial misfire without much argument, to be sure. Others may be less obvious to discern in a constantly evolving global marketplace.”

For example, a straight-to-streaming movie with a budget of $200 million could be deemed a success for a studio, if it drums up enough views. Meanwhile, a $200 million film that goes to theaters and underperforms is often considered a failure. That’s especially true when considering studios are also spending on marketing and promotion costs, usually equal to half of the production budget, and sharing ticket proceeds with cinemas.

For companies such as Netflix, Apple or Amazon that have bigger cushions and stakeholders who are traditionally more comfortable with risk, big-budget films going straight to streaming may not faze investors. But for more traditional media companies, that have long traded off their successes at the box office, shareholders still want to see a big theatrical return on investment.

Here’s a look at some of the biggest box-office disappointments so far in 2024, based on production budgets estimated by IMDb and box-office tallies to date from Comscore:

“Joker: Folie a Deux”

Estimated production budget: $200 million
Global box office: $166 million
Release date: Oct. 4, 2024

Warner Bros.’ “Joker: Folie a Deux” fell short of opening weekend expectations earlier this month, securing just $37.6 million domestically after initial box office forecasts called for close to $70 million in its first few days in theaters.

The film picks up after Arthur Fleck’s arrest in “Joker” as he awaits trial at Arkham State Hospital. Audiences failed to connect with the sequel, which featured Lady Gaga, who played a version of Harley Quinn, and her musical talents in a number of scenes.

“Joker: Folie a Deux” suffered the biggest second-week drop of any DC studios film, a whopping 81% fall.

For comparison, its predecessor snapped up $96.2 million during its opening weekend and $248.4 million globally in its first three days.

“Joker: Folie a Deux” failed to lure back its most ardent fans or inspire new moviegoers to flock to cinemas. Critics widely panned the flick, which currently holds a 33% rating on review aggregator Rotten Tomatoes and a rare “D” on CinemaScore.

“Borderlands”

Estimated production budget: $115 million
Global box office: $32.9 million
Release date: Aug. 9, 2024

Trying to capitalize on the popularity of video game-based movies, Lionsgate shelled out $115 million for director Eli Roth’s adaptation of “Borderlands.”

The film touted an all-star cast of Cate Blanchett, Kevin Hart, Jack Black, Jamie Lee Curtis and up-and-comer Ariana Greenblatt, but fell flat with audiences. Blanchett portrayed an infamous bounty hunter who forms an unlikely alliance with a ragtag team of misfits while on a quest to find the missing daughter of the most powerful man in the universe.

“Borderlands” generated a 10% rating on Rotten Tomatoes from 161 reviews and stalled out with just $32.9 million in global ticket sales.

Still from Lionsgate’s “Borderlands.”

Lionsgate

“Argylle”

Estimated production budget: $200 million
Global box office: $96.2 million
Release date: Feb. 2, 2024

Universal’s “Argylle” similarly had a stacked cast — Bryce Dallas Howard, Sam Rockwell, Henry Cavill, John Cena, Dua Lipa and Samuel L. Jackson, among them — but failed to drum up box-office interest.

The film centers on Howard as reclusive author Elly Conway, whose best-selling espionage novels start to mirror the covert actions of a real-life spy organization.

After spending around $200 million on production and an estimated $100 million on marketing efforts, the film generated just $96.2 million worldwide.

Much of the film’s issues stemmed from poor reviews — it garnered a 33% rating on Rotten Tomatoes — for what some called a convoluted yet predictable plot.

“The Fall Guy”

Estimated production budget: $125 million
Global box office: $180.9 million
Release date: May 3, 2024

Universal’s “The Fall Guy” was actually very well-received by critics, earning an 81% rating on Rotten Tomatoes. However, even the dynamic duo of Ryan Gosling, fresh off “Barbie,” and Emily Blunt, one of the stars of “Oppenheimer,” wasn’t enough to draw audiences out to cinemas.

The film, a love letter to stunt performers based on a television show from the ’80s with the same name, centers on Gosling’s Colt Seavers, a battle-scarred stuntman who is drawn back into the movie industry after the star of a film directed by Seavers’ former love interest Jody Moreno (Blunt) goes missing.

“The Fall Guy” tallied just $180.9 million globally. Its production budget was $125 million, not including marketing and distribution costs. The lack of major franchise attachment and niche storyline appears to have narrowed the audience.

Ryan Gosling stars in Universal’s “The Fall Guy.”

Universal

“Madame Web”

Estimated production budget: $80 million
Global box office: $100 million
Release date: Feb. 14, 2024

Sony’s Spider-Man universe films have been hit-or-miss at the box office for years. For every Venom or Spider-Verse success there’s a “Morbius” or a “Madame Web.”

With an 11% score on Rotten Tomatoes, “Madame Web” sparked the wrong kind of viral attention after its release. Memes flooded social media sites poking fun at the cast’s wooden performances, gaping plot holes and poorly redubbed dialogue.

“Madame Web” follows Cassandra Webb, a New York City paramedic with clairvoyance. Webb’s visions warn her about a threat to three young women, who each will gain spider powers in the future.

The film, which cost around $80 million to produce, managed to scoop up around $100 million in ticket sales globally. However, after marketing costs and splitting receipts with cinemas, the film did not make back its budget.

“Furiosa: A Mad Max Saga”

Estimated production budget: $168 million
Global box office: $172.4 million
Release date: May 24, 2024

Warner Bros.’ “Furiosa: A Mad Max Saga” was a long-awaited prequel from the mind of George Miller. However, despite solid reviews — a 90% “Fresh” rating on Rotten Tomatoes — the film failed to explode at the box office.

A prequel to 2015’s “Mad Max: Fury Road,” the film explores Furiosa’s early life after she is kidnapped by a tyrannical warlord and attempts over several years to get back home.

The film’s production did benefit from extensive government subsidies for filming in Australia, which lessened the financial blow, but “Furiosa” generated only $172.4 million during its global run. Its production budget was estimated at around $168 million without marketing expenses.

For comparison, “Mad Max: Fury Road” snared $368 million during its global run in 2015.

Chris Hemsworth stars as the villainous Dementus in Warner Bros.’ “Furiosa: A Mad Max Saga.”

Warner Bros. Discovery

“Megalopolis”

Estimated production budget: $120 million
Global box office: $9.2 million
Release date: Sept. 27, 2024

“Megalopolis” was a passion project for writer-director Francis Ford Coppola, who had been stewing over the film’s concept since the late ’70s. He self-financed the film, shelling out $120 million on production.

The film is set in an alternate version of 21st-century New York City called New Rome. It follows an architect named Cesar Catilina (Adam Driver) as he attempts to revitalize the city by building the futuristic utopia called Megalopolis all while facing corrupt leadership bent on shutting down his plans.

The “overstuffed opus,” as Rotten Tomatoes critics called the piece, had a sizeable cast of heavyweights in addition to Driver — Dustin Hoffman, Giancarlo Esposito, Laurence Fishburne and Jon Voight among them — but seemed to draw in only Coppola’s biggest fans. “Megalopolis” tallied just $9.2 million globally.

The film was distributed by Lionsgate. It is unclear if the marketing and distribution costs were split between Coppola and Lionsgate or if the studio took on the financial burden.

“Horizon: An American Saga — Chapter 1”

Estimated production budget: $100 million
Global box office: $38.2 million
Release date: June 28, 2024

Another passion project, “Horizon: An American Saga — Chapter 1” from Kevin Costner faced difficulties at the box office. The feature collected only $38.2 million at the global box office during its run in theaters. Its poor performance led Costner and Warner Bros. to postpone the release of a planned sequel, “Chapter 2,” which had been set for about six weeks after the first hit theaters.

“Chapter 1” follows several different narratives of people exploring the American West and pioneering new territory, including a gruff cowboy played by Costner, who finds himself on the run with a prostitute and a young boy after killing a fellow gunman.

Costner produced, wrote, directed and starred in both films, spending an estimated $100 million on the two projects. Two more chapters in the saga are still in development with an undisclosed budget.

Western films are a tough sell at modern box offices. The classic genre is beloved by film buffs, but isn’t a huge draw for moviegoers. The highest-grossing Western at the box office is Quentin Tarantino’s 2012 film “Django Unchained,” which generated about $450 million globally, according to Comscore. Costner’s “Dances with Wolves,” from 1990, is the second-highest with $424.2 million in global ticket sales, not adjusted for inflation.

While 2013’s “The Lone Ranger” tallied $260 million worldwide, no other Western film has garnered more than $250 million at the global box office.

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Fandango and Rotten Tomatoes.

Spirit AeroSystems to furlough 700 workers as Boeing machinist strike continues

suimt — Fri, 18 Oct 2024 13:55:11 +0000

Airplane fuselages bound for Boeing’s 737 Max production facility await shipment on rail sidings at their top supplier, Spirit AeroSystems Holdings Inc., in Wichita, Kansas, on Dec. 17, 2019.

Nick Oxford | Reuters

Boeing supplier Spirit AeroSystems will furlough some 700 workers as a strike by machinists at the plane maker enters its sixth week, a spokesman for the supplier said Friday.

More than 32,000 Boeing workers walked off the job Sept. 13 after overwhelmingly rejecting a tentative labor deal with Boeing, deepening the aircraft producer’s financial strain and handing a new challenge to CEO Kelly Ortberg, who took the reins just over two months ago.

The temporary furloughs account for about 5% of Spirit’s U.S. workforce, according to its latest annual filing.

The temporary furloughs will affect employees at Spirit’s largest facilities, in Wichita, Kansas, and account for about 5% of Spirit’s U.S. workforce, according to its latest annual filing. Meanwhile, Boeing and its machinists’ union remain at an impasse, and Spirit is considering deeper cuts.

“If the strike continues beyond November, we will have to implement layoffs and additional furloughs,” Spirit spokesman Joe Buccino told CNBC on Friday.

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