The Weekly Consensus

The Weekly Consensus

Maeghan Thompson

Story of the Week

Macy’s to close 150 more stores in 3 years

As part of a transformation plan unveiled Tuesday, Macy’s said it will shutter 150 underperforming locations over the next three years, with 50 closing this year alone. At the same time, Macy’s Inc. will open 15 Bloomingdale’s stores, at least 30 Bluemercury stores and 30 small-format, off-mall stores. Executives in October hinted that more full-line Macy’s stores would close as the company set out to triple its small-format fleet, but the extent of the closures took some analysts by surprise. Macy’s Inc. also reported a Q4 net sales decline of 1.7% year over year to $8.1 billion, with store comps (including concessions) down 4.2% year over year. By banner, Macy’s comps fell 4.7%, Bloomingdale’s fell 1.6% and Bluemercury rose 2.3%. Gross margin expanded to 37.5% from 34.1% a year ago, with merchandise margin up 260 basis points, mostly due to lower clearance markdowns. The company swung into the red with a $71 million net loss, from $508 million in net income a year ago.

Apparel & Footwear

Shein considers London listing if US IPO blocked over ties to China

Shein is considering London as a back-up option for a blockbuster flotation if US regulators block the online fast-fashion group’s preferred choice of a New York IPO over its ties to China. The Singapore-headquartered company has pitched the UK as an alternative destination if it is unable to list in the US, according to two investors in the company. One of these people said that Hong Kong had also been considered, but had decided against listing in the city, citing its stock market’s recent poor performance. While Shein continues to pursue a US listing as a priority, the UK has become an alternative as politicians in Washington probe the company’s ties to China, such as its alleged use of cotton from Xinjiang. The company was originally founded in China, and relies on sellers and factories in the country to produce the cheap goods that underpin its fast-growing business. One British government official said that the UK would “welcome” a Shein listing and confirmed the company had expressed an interest in a London initial public offering. Chancellor Jeremy Hunt met Shein chair Donald Tang last month in an “introductory chat”. Should Shein switch to London, it would be a rare win for the city, which has struggled to attract major listings.

Steve Madden Tops Sales and Earnings Projections

Steve Madden on Wednesday reported sales and earnings for 2023 that beat expectations. In the fourth quarter, the company reported revenues of $519.7 million, up 10.4 percent compared to the same quarter in 2022. Adjusted net income was $45 million, or $0.61 per diluted share, compared to $33.7 million and $0.44 per diluted share the prior year. Sales and profits were ahead of what analysts surveyed by Yahoo were looking for: $511.97 million in revenues and $0.57 in EPS. The wholesale channel, which has been particularly challenged throughout 2023, showed signs of improvement in Q4, with revenues in that channel up 4.9 percent in Q4 to $354.8 million. Wholesale footwear revenue was down 0.4 percent, offset by wholesale accessories and apparel revenues, which was up 56.5 percent. Direct-to-consumer revenue was up 1.9 percent to $162.3 million in Q4, driven by brick-and-mortar sales. For the full year of 2023, revenues were down 6.6 percent to $2 billion, better than Steve Madden’s expected 7 percent decline. Adjusted diluted EPS was $2.45 per diluted share, better than the expected $2.40 per diluted share.



Athletic & Sporting Goods

Vista Outdoor Fields $2.9 Bn Offer to Acquire Company in All-Cash Deal

Vista Outdoor, Inc., parent company of Camelback, Bell, Giro, Blackburn, Fox Racing, Bushnell, Camp Chef, Simms, and the Remington and Federal ammunition businesses, among others, has reportedly received an unsolicited indication of interest from MNC Capital, a mergers and acquisitions firm based in Montreal, Quebec, Canada, indicating that MNC expresses its interest in acquiring Vista Outdoor in an all-cash transaction for $35.00 per Vista share. Before the March 1 release of the information regarding the overture by MNC, VSTO shares were trading down overnight at $30.42 on the New York Stock Exchange.   As previously announced, on October 15, 2023, Vista Outdoor entered into an agreement and plan of merger pursuant to which Vista Outdoor has agreed to sell its Sporting Products (ammunition) business to Czechoslovak Group a.s. (CSG) for an enterprise value of $1.91 billion in an all-cash transaction subject to customary closing conditions.


Orangetheory, Self Esteem Brands Merge in Major Fitness Deal

Orangetheory Fitness is merging with Self Esteem Brands, the parent company of Anytime Fitness, in an all-stock transaction, the sides announced.  The “merger-of-equals” deal represents one of the biggest fitness industry consolidations in recent memory as Orangetheory, a highly popular boutique fitness brand, joins forces with Anytime Fitness, a big-box gym powerhouse with a presence across the globe.  The new, combined company will represent $3.5 billion in systemwide sales and around 7,000 franchise locations across 50 countries and territories spanning seven continents, the sides said.  Self Esteem Brands recently reported strong revenue growth and franchise sales for its 2023 fiscal year, led by Anytime Fitness, which counts over 5,000 global gym locations. SEB’s portfolio also includes boutique brands like Waxing the City, The Bar Method, Basecamp Fitness and Summit Fitness.


Mayfair Capital Partners Acquires Baseline Fitness

Mayfair Capital Partners, a division of Oxford Financial Group, Ltd., on behalf of its underlying investors, has acquired Baseline Fitness LLC.  Founded in 2009 and headquartered in Fargo, North Dakota, Baseline Fitness is a leading franchisee in the Planet Fitness system with 100 locations under its umbrella. Planet Fitness Inc., the franchisor, is one of the largest and fastest-growing franchisors and operators of fitness centers with more members than any other fitness brand and 2,500+ locations system-wide, with more than 18 million members. Planet Fitness’s mission is to enhance people’s lives by providing a high-quality fitness experience in a welcoming, non-intimidating environment, called the Judgement Free Zone®. Mayfair Capital Partners acquired Baseline Fitness from Freeman Spogli and Co.

Cosmetics & Pharmacy

Advent International acquires Brazilian haircare brand Skala Cosméticos

Advent International has acquired Skala Cosméticos, a vegan haircare brand headquartered in Uberaba, Minas Gerais, Brazil. Founded in 1986, Skala is one of the fastest growing brands in the Brazilian beauty sector, with annual expansion of roughly 30% in recent years. It is the fourth largest hair care brand in Brazil and one of the leading brands in the hair mask category. According to Advent, Skala’s products are present in more than 45% of Brazilian homes and the company exports its products to over 40 countries. The transaction, whose financial details have not been disclosed, will enable Skala to expand its manufacturing capacity and distribution network as well as increase the brand’s presence in international markets.

Famille C Participations Invests in Evok Collection Hotel Group

Famille C Participations, the Courtin family’s investment company, has taken a 130-million-euro stake in Evok Collection, Pierre Bastid’s group’s hotel division. “With this investment, Famille C Participations is implementing the strategy led by Prisca Courtin and her teams, naturally expanding its business into hotel experiences where well-being is central,” the two companies said in a release Tuesday morning. Courtin is chief executive officer of Famille C Participations. The Courtin family founded and owns Groupe Clarins. There’s been an increasing merging of the beauty and hospitality sectors in the recent past, as well-being seeps more profoundly into each. Crystalizing this, at LVMH Moët Hennessy Louis Vuitton, one executive, Stéphane Rinderknech, oversees the group’s 15 beauty brands as well as its hospitality division.

Bath & Body Works Projects Downbeat FY Sales, Profit on Slowing Demand

Bath & Body Works forecast annual sales and profit below analysts’ expectations on Thursday as consumers scaled back spending on non-essential items like candles and fragrances, sending its shares down 9 percent in pre-market trading. Amid high borrowing and rental costs in the US, specialty retailers including Estee Lauder and Macy’s saw shoppers restricting discretionary spending, and have revised their annual results below Wall Street expectations. Consumer prices rose more than expected in January, while US government reports indicated a ten-month low in retail sales. The beauty and skincare firm expects 2024 annual net sales to range between a decline of 3 percent to flat compared with analysts’ expectations of a 1.3 percent rise, as per LSEG data.

Discounters & Department Stores

Family Dollar to pay $41.7M for issues tied to rat-infested warehouse

Family Dollar pleaded guilty to a one count misdemeanor violation after U.S. Food and Drug Administration-regulated products were contaminated at a distribution center in West Memphis, Arkansas, according to a Feb. 26 press release. The discount store was initially issued a subpoena on March 1, 2022, after the FDA flagged DC 202 as rodent-infested and pointed to other unsanitary conditions the month prior. This led to the planned permanent shuttering of the distribution center, the temporary closure of more than 400 Family Dollar stores as well as a temporary recall of products from the facility. The subpoena requested information, records and documents around compliance procedures as well as products that might have been corrupted at Distribution Center 202 in West Memphis, the release stated.

Dollar General starts accepting supplemental health benefits

Dollar General has started accepting supplemental health benefits as a payment method for goods including food, over-the-counter medicines and wellness items at all of its stores, marking the latest step by the discount chain to boost its presence in the grocery sector. In a Wednesday post on its website, the retailer indicated that the move is connected with its ongoing effort to position itself as a source for health-oriented products, particularly for consumers who live in rural areas. About three-quarters of people in the U.S. reside within five miles of a Dollar General location, according to the company.

Walmart trims store-to-home delivery costs by 20%

Walmart has lowered the cost of making last-mile deliveries from its stores to customers’ homes by about 20% over the past year, EVP and CFO John David Rainey said on an earnings call last week. That’s up from the 15% reduction in store-to-home delivery costs reported by the retail giant in November. Rainey credited the improvements in part to increasing active e-commerce customers, with Walmart “densifying the last mile” by delivering more packages per route. “As we have more customers coming to us, using us through e-commerce channels, it enables us to spread that cost of delivery over multiple customers,” Rainey said.



Emerging Consumer Companies

Burch Creative Capital Takes Majority Stake in Rowing Blazers

Rowing Blazers, the cult menswear brand founded in 2017 by Jack Carlson, has sold a majority stake in the business to Burch Creative Capital (“BCC”), the investment firm founded by Chris Burch; and to Tom Vellios, co-founder of Five Below, and Jason Epstein, partner at Stonecourt Capital, who are co-investing with BCC. Rowing Blazers joins an esteemed group of brands held by BCC including Staud, Solid & Striped, Danielle Guizio, BaubleBar, and Tory Burch. The move will allow Rowing Blazers to hire in key positions, develop its women’s line, expand distribution, and grow its retail footprint, starting with a new flagship Manhattan store as early as Fall 2024. The announcement comes after a milestone year for Rowing Blazers during which the brand launched major collaborations with Gucci and Target. “Jack [Carlson] has created an extraordinary brand that is reminiscent of my first apparel business, Eagle’s Eye,” said Burch.


Locker, social shopping platform, raises $2.5 million
Locker is a social shopping platform launched in 2022 as a Chrome extension and iOS app. It allows users to save products, create wish lists, collaborate with friends, and share giftable collections. The company recently raised $2.5 million from Wonder Ventures at a $9 million valuation. Wonder Ventures praised Locker for its user-friendly and viral socialized commerce platform. Unlike influencer-focused platforms, Locker is designed for everyday consumers who want to curate shoppable collections for fun. The company’s business model involves partnering with brands through affiliate networks, with an average commission rate of 12–25%. The recent funding round included investments from Cabell Hickman and other notable individuals. Locker currently has 80,000 monthly active users and offers rewards for referrals through its “Shopping Club.”



Food & Beverage

Vertical Farming Company Oishii Raises $134M Series B to Expand Distribution

Vertical farming startup Oishii has secured $134 million in Series B funding, led by Japan’s telecommunications leader NTT. The funding round also attracted investors with expertise in food tech, sustainable agriculture and automation, including Bloom8, McWin Capital Partners, the Japan Green Investment Corporation for Carbon Neutrality and Yaskawa Electric Corporation. Oishii offers a range of produce beyond leafy greens, thanks to the pollination efforts of bees in its indoor farms. The funding will support Oishii’s plans to open a solar-powered facility and expand distribution to new markets, all while investing in advanced robotics and energy-saving innovations. Oishii aims to make vertical farming mainstream in the United States and is the only U.S. vertical farm selling strawberries year-round. It grows its products without pesticides and bears the Non-GMO Project Verified seal. With this latest funding, Oishii has raised a total of $189 million since its founding in 2016 and is poised for further expansion across the Northeast.

Molson Coors Expands Investment in Energy Drink Brand

Molson Coors Beverage Company has reached an agreement to expand its partnership with ZOA Energy, a leading energy drink brand co-founded by Dwayne “The Rock” Johnson, Dany Garcia, Dave Rienzi and John Shulman. Molson Coors will strengthen its investment in ZOA as it furthers a push that began in 2019 to expand beyond its beer roots by becoming a total beverage company. ZOA reported more than $100 million in sales in 2022 and 138% year-over-year growth. With Molson Coors’ expanded minority stake, ZOA will be positioned for further – and aggressive – growth across its retail and direct-to-consumer business. By way of Molson Coors’ expanded stake, ZOA plans to double its media investment in 2024.

Conagra divesting stake in Agro Tech Foods

Funds advised by Convergent Finance LLP and private equity firm Samara Capital have reached agreement to acquire a 51.8% stake in Agro Tech Foods Ltd. (ATFL) from Chicago-based Conagra Brands, Inc. Financial terms of the transaction were not disclosed. ATFL, which is listed on both the National Stock Exchange and the Bombay Stock Exchange, is engaged in the business of manufacturing, marketing and selling a wide range of food products and edible oils. The Mumbai-based company competes in the ready-to-cook snacks, ready-to-eat snacks, spreads and dips, breakfast cereal and chocolate confectionery segments. Its portfolio includes ACT II popcorn and Sundrop edible oils. Conagra has been a controlling shareholder of ATFL since 2011. Following the transaction, ATFL said it will continue to license the ACT II brand from Conagra for use in India.

Boston Beer Company announces CEO change as latest financial report is released

The Boston Beer Company, which makes Sam Adams, Truly Hard Seltzer and Twisted Tea, is announcing a change at the top. The brewer said after releasing its latest financial results that CEO Dave Burwick is retiring after six years at the helm and will be replaced by current lead director Michael Spillane in April. Boston Beer founder Jim Koch said Burwick has “had a tremendous impact on our company,” especially when it comes to the “beyond beer” category. “We’ve grown from $850 million in revenue when he began as CEO to more than $2 billion in revenue with a portfolio of powerful brands in attractive categories today,” Koch said in a statement. “He’s built a strong and deep leadership team and he’s positioned the company very well for ongoing success in 2024 and beyond.” Boston Beer Company, which debuted its Samuel Adams Boston Lager in 1985, released its fourth quarter and full fiscal year 2023 financial results on Tuesday. For the year, net revenue was down 3.9%, with an $18.1 million loss in the fourth quarter.



Grocery & Restaurants

US sues to block merger of grocery giants Kroger and Albertsons, says prices could rise

The Federal Trade Commission sued to block a proposed merger between grocery giants Kroger and Albertsons, saying the $24.6 billion deal would eliminate competition and lead to higher prices for millions of Americans. The FTC filed an administrative complaint against the companies, which will be considered by an administrative law judge at the agency. It also filed a lawsuit with the U.S. District Court in Oregon requesting a temporary injunction blocking the merger. That lawsuit was joined by the attorneys general of eight states and the District of Columbia. Kroger and Albertsons, two of the nation’s largest grocers, agreed to merge in October 2022. The companies said a merger would help them better compete with Walmart, Amazon, Costco and other big rivals. Together, Kroger and Albertsons would control around 13% of the U.S. grocery market; Walmart controls 22%, according to J.P. Morgan analyst Ken Goldman. Both companies, immediately after the FTC announcement, said that they will challenge the agency in court. Kroger, based in Cincinnati, Ohio, operates 2,750 stores in 35 states and the District of Columbia, including brands like Ralphs, Smith’s and Harris Teeter. Albertsons, based in Boise, Idaho, operates 2,273 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw’s.

Wendy’s says it won’t use surge pricing

Don’t call Wendy’s new pricing plan “surge pricing.” In a blog post on Tuesday, the fast-food chain explained that its test of new menus with prices that change throughout the day is not meant to cost more for customers. “This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants,” the company statement read. “Digital menuboards could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day.” In an email to CNN, Wendy’s was more blunt: “Wendy’s will not implement surge pricing, which is the practice of raising prices when demand is highest. This was not a change in plans. It was never our plan to raise prices when customers are visiting us the most.” But the questions over what to call Wendy’s experiment – surge pricing? Dynamic pricing? Something else? – underscore the PR problem around a pricing system that’s already been used for years in a range of industries, from ride-sharing to airlines to your local happy hour.

Home & Road

Lowe’s Ready for Spring After Adapting To Beat Q4 Expectations

Lowe’s Cos. topped Wall Street estimates for its fourth quarter and pointed to adjustments it is making to adapt to the current economic and consumer spending environment as it prepares for the important spring shopping season for DIY retailers.

Net earnings for the quarter were $1.02 billion, or $1.77 per diluted share, versus $957 million, or $1.58 per diluted share, in the year-prior quarter, the company reported. Adjusted diluted earnings per share were $2.28 in the year-earlier period. Lowe’s made no adjustments in the latest completed fourth quarter. For the quarter, Lowe’s beat a Yahoo Finance-published analyst consensus estimate of $1.68 per diluted share and $18.45 billion in total revenue. Comparable sales declined 6.2% because of a slowdown in do-it-yourself customer demand and unfavorable January winter weather, the company noted. The Pro customer component of the total comp was flat year over year. Net sales were $18.6 billion versus $22.45 billion in the year-previous quarter. They were impacted by an extra week in the year-past period as well as the sale of the company’s Canadian business. Operating income was $1.69 billion versus $1.7 billion in the year-before period.

HomeGoods continues strong in TJX Cos.’ Q4, FY earnings gains

Retail giant TJX reported $16.4 billion in sales for the 14-week fourth quarter, an increase of 13% over the 13-week quarter last year. Net income for the quarter was $1.4 billion and diluted earnings per share were $1.22, up 37% from last year. For the full 53-week year, net sales were $54.2 billion, an increase of 9% from the 52-week fiscal year 2023. Consolidated comparable store sales rose 5% for both the quarter and year. In the company’s HomeGoods segment, net sales rose 16% for the quarter and 9% for the year. “Thanks to our teams’ excellent execution of our great business model, we delivered outstanding results on both the top and bottom lines that exceeded our expectations,” said Ernie Herrman, CEO. “We surpassed $50 billion in annual sales, a milestone for our company. We saw comp sales growth at every division driven by customer transactions, which underscores our confidence in our ability to gain market share across all our geographies. We had a very strong finish to 2023 and start the new year in a position of strength with the first quarter off to a good start.”

1stDibs starts to see benefits of ‘re-engineered cost structure’ in Q4

Luxury design products online marketplace 1stDibs says 2023’s groundwork is starting to produce “tangible results,” in its earnings report for the fourth quarter and fiscal year ended Dec. 31, 2023. While net revenue declined in the quarter, the period saw improvements in operating income, net income and earnings per share for the period. Net revenue was $20.9 million, down nearly 9% from the previous year. The company saw a net loss for the period, down $2.9 million, an improvement of nearly $4 million from the same period last year. The company also reported cash, cash equivalents and short-term investments of $139.3 million at the end of December. “Throughout 2023, we laid the groundwork for future success,” said David Rosenblatt, 1stDibs CEO. “Over the past year we have reduced our cost structure, accelerated the path to profitability, focused our roadmap on the highest-ROI projects and begun returning capital to shareholders. Our efforts are producing tangible results, including a return to conversion growth.”

Jewelry & Luxury

Signet Appoints Former Cracker Barrel CEO to Board

Signet Jewelers has appointed Sandra Cochran, the former CEO of Cracker Barrel and Books-a-Million, to its board of directors. Cochran is a member of the Signet board’s human capital management and compensation committee. Her appointment temporarily increases the size of the board from 12 to 13 members, 12 of whom are independent. (Signet board members are term-limited, and some are due to leave soon.) Cochran has more than 25 years of retail experience. She was CEO of Books-a-Million from 2004 to 2009, and headed Cracker Barrel, the restaurant and gift store chain, from September 2011 to November 2023. She joined Cracker Barrel as chief financial officer in 2009 and was named president and chief operating officer the following year.


U.S. Opts for “Self-Certification” to Enforce Russian Diamond Ban

On March 1, importers bringing polished diamonds of one carat or more into the United States will need to provide “self-certification” that their diamonds aren’t from Russia. New rules issued by U.S. Customs and Border Protection say that qualifying diamond imports must be accompanied by a PDF document on company letterhead with one of two comments. For nonindustrial diamonds weighing at least one carat, the document should say:  “I certify that the nonindustrial diamonds in this shipment were not mined, extracted, produced, or manufactured wholly or in part in the Russian Federation, notwithstanding whether such diamonds have been substantially transformed into other products outside of the Russian Federation.”

Lightbox ‘Significantly’ Lowered Its Prices in Q4

Lightbox, the lab-grown diamond brand launched by De Beers Group in 2018, tested 25-33 percent lower prices late last year amid falling wholesale prices for the stones. In the fourth quarter, Lightbox dropped the price of its standard lab-grown diamonds (G-J color and VS clarity) from $800 per carat to $600 per carat. Its “Finest” range was reduced to $1,000 per carat, down from $1,500 per carat. Finest are Lightbox’s top-quality diamonds, colorless (D-F) and VVS clarity. Lightbox also has a line of faint color (K-M), SI clarity diamonds it sells as “Basics” for $600 per carat. It did not lower prices on those goods. The price trial took place in the fourth quarter and ended in January, the brand confirmed.


Office & Leisure

Samsonite Considers Options After Takeover Interest, Including Going Private

Samsonite International SA is considering options after receiving takeover interest from suitors including buyout firms, people familiar with the matter said. The Hong Kong-listed luggage maker is working with advisers as it studies possibilities including going private, the people said, asking not to be identified because the information isn’t public. It has held preliminary discussions with a select group of suitors, according to the people. Some private equity firms have been studying a deal for Samsonite with the idea of acquiring the company and later relisting it in another market — like the US — at a higher valuation, the people said. Shares in Samsonite surged as much as 18% in Hong Kong on Tuesday, the most since March 2022, following the Bloomberg News report. The stock was up about 14% at the close, giving the company a market value of about HK$38 billion ($4.9 billion). Deliberations are ongoing, and there’s no certainty Samsonite will decide to move forward with a transaction, according to the people.  Samsonite, based in Mansfield, Massachusetts and Luxembourg, traces its roots back to 1910 and is known for the durable suitcases sold under its namesake brand. It also sells luggage and other travel accessories under brands including American Tourister, Tumi and High Sierra.

Hasbro’s CFO Sharpens Focus on Cost Savings as Toy Shoppers Pull Back

Hasbro’s finance chief is accelerating efforts to slash costs as the toy maker contends with tepid demand and years of underinvestment in its toy business. Demand for toys has declined over the past year as consumers, hamstrung by inflation, have pulled back on buying play things that they lavished on children during the pandemic. In 2023, sales of toys slumped 7% globally compared with a year earlier, according to Circana, a market research firm. In the U.S., retail sales at hobby, toy and game stores slipped less, falling 2% in 2023 compared with a year earlier, to $21.2 billion, according to the U.S. Census Bureau. The owner of brands such as Nerf, Play-Doh and Dungeons & Dragons has felt the pinch and then some. Revenue at the company last year took a 15% slide to $5 billion, compared with 2022. The company missed analysts’ estimates when it reported this month, sending shares plummeting.

Technology & Internet

Thrasio, once king of e-commerce aggregation, files for Chapter 11

Thrasio, the U.S. startup that raised billions of dollars and popularized the concept of e-commerce aggregation — buying up and restructuring dozens of smaller brands and third parties selling on marketplaces like Amazon in a bid for better economies of scale — has commenced a restructuring of its own. The company has filed for Chapter 11 bankruptcy protection to cut its losses on a mountain of debt. It said it has also secured an emergency $90 million in emergency financing from unnamed existing lenders. Thrasio raised more than $3 billion in equity and debt over the years to fuel its roll-up play, and its collapse into bankruptcy protection is one of the biggest examples of how mighty growth-stage tech companies have fallen in recent times. The restructuring support agreement covers 81% of Thrasio’s revolving credit facility lenders and 88% of its term loan lenders, the company said, and it will erase around $495 million of its existing debt, as well as defer all interest payments in the first year post-emergence from Chapter 11. The news should not come as a surprise: There have been murmurs of the company’s impending bankruptcy since last year. Since 2022, the company has been laying off employees and taking other steps to restructure its business such as pulling out of certain markets.

Apple car project canceled

Apple will wind down its team working on electric cars, called Special Projects Group, according to Bloomberg. The news signals an end to Apple’s secretive effort to build a car to rival Tesla. The program employed thousands of employees but never fit with Apple’s core business of electronics and online services, and raised questions about where Apple would turn for the manufacturing of a vehicle. Reports of Apple’s ambition to build a car first surfaced in 2014 after the company recruited automotive engineers and other talent from auto companies. While there was little public information about Apple’s plans, the company operated a program with autonomous Apple-owned cars equipped with sensors and safety drivers cruising around the San Francisco Bay Area. Apple’s Special Projects Group had several reorganizations over the years, including layoffs in 2019, when employees were moved to different parts of the company. Some Apple employees in the car division may move to a generative artificial intelligence team, according to Bloomberg.


Best Buy warns of layoffs as it issues soft full-year guidance

Best Buy surpassed Wall Street’s revenue and earnings expectations for the holiday quarter on Thursday, even as the company navigated through a period of tepid consumer electronics demand. But as the retailer warned of another year of softer sales, it said it would lay off workers and cut other costs across the business. CEO Corie Barry declined to specify the number of job cuts, but said the savings would be reinvested in the business or would offset inflationary pressures. “This is giving us some of that space to be able to reinvest into our future and make sure we feel like we are really well positioned for the industry to start to rebound,” she said on a call with reporters. For this fiscal year, Best Buy anticipates revenue will range from $41.3 billion to $42.6 billion. That would mark a drop from the most recently ended fiscal year, when full-year revenue totaled $43.45 billion. It said comparable sales will range from flat to a 3% decline. On an earnings call, Barry said Best Buy expects the coming year to be one “of increasing industry sales stabilization.”


Finance & Economy

Services drive US prices higher in January; inflation gradually cooling

U.S. prices accelerated in January amid a surge in the costs of services like housing and finance, but the annual increase in inflation was the smallest in three years, keeping a mid-year interest rate cut from the Federal Reserve on the table.  The report from the Commerce Department also showed consumer spending slowing last month, restrained by decreases in outlays on goods, including motor vehicles, furniture and other long-lasting household equipment.  The inflation and consumer spending readings were in line with economists’ expectations. But with the costs of services increasing by the most in 12 months, likely as businesses raised prices at the start of the year, the timing of the first Fed rate cut remains uncertain. Most economists do not expect the price increases to repeat in February.

Consumer sentiment softens at the end of February, but stays at 32-month high

A survey of consumer sentiment slipped in late February but stayed at a 32-month high in a sign of optimism about the U.S. economy.  The second of two readings of the consumer sentiment survey in February fell to 76.9 from 79.6 earlier in the month, the University of Michigan said. It’s still at the highest level since July 2021, however.  A resilient economy has continued to expand at an above-average pace despite the shock of higher interest rates. Steady hiring and very low unemployment have given Americans the confidence to spend.