A long-exposure photograph shows SpaceX’s Falcon 9 rocket carrying the Crew-6 mission in the company’s
Joel Kowsky / NASA
SpaceX launched four people to the International Space Station from Florida as Elon Musk’s company begins the final of the original six missions it was awarded by NASA.
Known as Crew-6, the mission for NASA will bring the group up to the space station for a six-month stay in orbit. The mission is SpaceX’s sixth operational crew launch for NASA to date and the company’s ninth human spaceflight to date.
“If you enjoyed your ride, please don’t forget to give us five stars,” SpaceX mission control called out after the capsule reached orbit.
“That was fantastic, thank you,” Crew-6 commander Stephen Bowen responded.
Crew-6 launched a little after midnight on Thursday morning, beginning a just over 24-hour journey to the ISS. The mission brings the number of astronauts SpaceX has launched to 34, including both government and private missions, since its first crewed launch in May 2020.
The Crew-6 astronauts before launch, from left: Russian cosmonaut
SpaceX
The crew is made of two Americans, one Russian and one Emirati: NASA astronauts Warren Hoburg and Stephen Bowen, Roscosmos cosmonaut Andrey Fedyaev and United Arab Emirates astronaut Sultan Alneyadi.
SpaceX launched the astronauts in its Crew Dragon capsule called Endeavour, on top of a Falcon 9 rocket. Both the rocket and capsule are reusable, with the latter flying on its fourth mission to date.
After a last-minute delay during SpaceX’s first launch attempt on Monday, a data review identified a clogged filter in a ground system as the cause of an apparent issue in the fluid that ignites the rocket’s engines. SpaceX replaced the filter and completed verification steps to make Thursday’s launch.
SpaceX developed its Crew Dragon spacecraft and fine-tuned its Falcon 9 rocket under NASA’s competitive Commercial Crew program, competing against Boeing’s Starliner capsule. But Boeing’s capsule remains in development, with costly delays pushing back the start of operational Starliner flights.
NASA awarded SpaceX with additional missions, for a total of 14, compared with Boeing’s six.
Two top Democrats in Congress are calling on Fox Corp Chairman Rupert Murdoch and the leadership of Fox News “to stop spreading false election narratives and admit on the air that they were wrong to engage in such negligent behavior.”
Senate Majority Leader Chuck Schumer and House Minority Leader Hakeem Jeffries, both Democrats from New York, sent a letter this week to Murdoch and Fox News leadership. The letter comes days after further revelations in Dominion Voting Systems‘ $1.6 billion defamation lawsuit against Fox Corp and its TV networks.
“As noted in your deposition released yesterday Tucker Carlson, Sean Hannity, Laura Ingraham, and other Fox News personalities knowingly, repeatedly, and dangerously endorsed and promoted the Big Lie that Donald Trump won the 2020 presidential election,” the lawmakers wrote in the letter, which was released Wednesday.
Trump has repeatedly spread false claims that the election was stolen from him. His attempts to pressure a top official in Georgia to “find” votes for him are the subject of a criminal probe in that state, which Trump lost to Democrat Joe Biden.
Earlier this week, Dominion filed court papers that revealed parts of the testimony from Murdoch and other top Fox Corp leadership. In his deposition, Murdoch acknowledged that some of Fox’s top TV hosts endorsed false election fraud claims.
When Murdoch was asked if he was “now aware that Fox endorsed at times this false notion of a stolen election,” Murdoch responded, “Not Fox, no. Not Fox. But maybe Lou Dobbs, maybe Maria [Bartiromo] as commentators,” according to court papers.
“Some of our commentators were endorsing it,” Murdoch said in his responses regarding election fraud during the deposition. “They endorsed.” Murdoch and other top Fox executives also remained close to Fox News CEO Suzanne Scott during the election coverage, according to the court papers.
A representative for Fox didn’t immediately respond to request for comment.
On Monday, when the court papers were filed, a Fox News representative said in a statement that Dominion mischaracterized the facts by cherry-picking soundbites: “When Dominion is not mischaracterizing the law, it is mischaracterizing the facts.”
Dominion sued the right-wing cable networks, Fox News and Fox Business, and its parent company, arguing the networks and its top anchors made false claims that Dominion’s voting machines rigged the results of the 2020 election. Fox News has consistently denied that it knowingly made false claims about the election.
In court papers filed in February, the parent company said that the past year of discovery has shown Fox Corp. played “no role in the creation and publication of the challenged statements – all of which aired on either Fox Business Network or Fox News Channel.”
Murdoch and his son, Fox CEO Lachlan Murdoch, in addition to Fox’s chief legal and policy officer Viet Dinh and Paul Ryan, the former Republican speaker of the House and a Fox board member, have all been questioned in recent months.
The revelations that have come out in court papers in recent weeks stem from months of discovery and depositions. Top Fox TV personalities, including Tucker Carlson and Sean Hannity, also faced questioning.
The faces of Fox News and Fox Business also expressed disbelief in Sidney Powell, a pro-Trump attorney who aggressively promoted claims of election fraud at the time, according to court papers. Ryan said that “these conspiracy theories were baseless,” and that the network “should labor to dispel conspiracy theories if and when they pop up.”
The lawsuit has been closed watched by First Amendment watchdogs and experts. Libel lawsuits typically focus on one falsehood, but in this case Dominion cites a lengthy list of examples of Fox TV hosts make false claims even after they were proven to be untrue. Media companies are often broadly protected by the First Amendment. Fox News has said in earlier statements “the core of this case remains about freedom of the press and freedom of speech.”
A status conference is slated for next week, while the trial is set to begin in mid-April.
Read the letter below:
Dear Mr. Rupert Murdoch et al:
As noted in your deposition released yesterday Tucker Carlson, Sean Hannity, Laura Ingraham, and other Fox News personalities knowingly, repeatedly, and dangerously endorsed and promoted the Big Lie that Donald Trump won the 2020 presidential election. Though you have acknowledged your regret in allowing this grave propaganda to take place, your network hosts continue to promote, spew, and perpetuate election conspiracy theories to this day.
The leadership of your company was aware of the dangers of broadcasting these outlandish claims. By your own account, Donald Trump’s election lies were “damaging” and “really crazy stuff.” Despite that shocking admission, Fox News hosts have continued to peddle election denialism to the American people.
This sets a dangerous precedent that ignores basic journalistic fact-checking principles and public accountability. This is even more alarming after Speaker McCarthy is reportedly allowing Tucker Carlson to review highly sensitive security camera footage of the events surrounding the violent January 6 insurrection.
We demand that you direct Tucker Carlson and other hosts on your network to stop spreading false election narratives and admit on the air that they were wrong to engage in such negligent behavior.
As evidenced by the January 6 insurrection, spreading this false propaganda could not only embolden supporters of the Big Lie to engage in further acts of political violence, but also deeply and broadly weakens faith in our democracy and hurts our country in countless other ways.
Fox News executives and all other hosts on your network have a clear choice. You can continue a pattern of lying to your viewers and risking democracy or move beyond this damaging chapter in your company’s history by siding with the truth and reporting the facts. We ask that you make sure Fox News ceases disseminating the Big Lie and other election conspiracy theories on your network.
Girl watching a comedy movie at the cinema with her friend.
Rgstudio | E+ | Getty Images
LOS ANGELES — The movies are still big. It’s the multiplexes that are getting smaller.
Since 2019, the number of total screens in the U.S. have decreased by around 3,000 to just under 40,000.
This consolidation was a direct result of the Covid pandemic, which shut down theaters for a time and triggered a surge in streaming subscriptions. A number of regional chains have shuttered for good, while others were left to reevaluate their financial footing. For many, that meant closing locations or selling off leases.
“Think about retail out there in general, it’s repositioning itself, you don’t have as many of the same branded stores in the marketplace,” said Rolando Rodriguez, chairman of the National Association of Theatre Owners. “Consumers are a lot more selective, and I think that for the economics that are necessary, you’re not going to see these 30-plexes anymore.”
Rodriguez said that most newly built locations will range between 12 and 16 screens and those with larger, preexisting footprints will look to repurpose some space for supplementary activities for moviegoers, like arcades, bowling alleys or bars.
Theaters have been forced to innovate, even as Hollywood production returns to normal and studios offer more movies for release than they were able to during the earlier stages of the pandemic.
As the space contracts, cinema operators are investing in the basics, improving sounds, picture quality and seating as well as in bolstering its food and beverage offerings, events and alternative programming. The aim is to improve the baseline experience for moviegoers regardless of the type of ticket they purchase.
“We do better when people get in the habit of seeing,” said Larry Etter, senior vice president at family-owned regional chain Malco Theatres. “And I think that’s what’s going to happen. I think we’re going to recreate the habitual effect that on Friday nights or Saturday nights or whatever it is, we’re gonna go to the movies.”
Already, the industry is seeing improvements in ticket sales. Through Monday, the 2023 box office has tallied $958.5 million in ticket sales, up nearly 50% compared to last year and down just 25% from 2019, according to data from Comscore.
This is a marked improvement from the meager $98.7 million box office tally during the same period in 2021.
Foot traffic has also improved, but continues to linger behind pre-pandemic levels. In the two decades before the pandemic, the industry sold an average of 1.1 billion tickets per year, according to data from EntTelligence. Even as Covid restrictions were lifted in 2022, just more than half that number of tickets were sold for the year. And ticket sales should rise in 2023 as studios release more films.
While cinema operators are pleased that studio production has increased, they are no longer taking audiences for granted.
To that end, operators have started with upgrading projectors. Over the last few years, movie theater operators have been removing traditional digital projectors and installing laser units, citing cost savings over time and a better picture quality for moviegoers.
“It’s a little bit expensive, but it will produce a better product on the screen,” Malco’s Etter said. “The more light you have the clearer everything is and the easier it is to see. And it will be much more economical. It’s sustainable because you are going to use about 60% of the utilities that you did before.”
Etter explained that traditional digital bulbs need to be replaced after around 2,000 hours and produce so much heat that theaters have to pay more to air-condition the projector rooms. And laser components last for 20,000 hours so they can go years without being replaced.
Many theater operators told CNBC they are planning similar upgrades to sound systems, saying they have partnered with companies like Dolby to bring quality speakers into their auditoriums.
“We’ve invest in Dolby Atmos, we’ve invested in new screens, we’ve invested in laser projection,” said Rich Daughtridge, president and CEO of Warehouse Cinemas. “To me, that’s baseline. I feel like you have to create the best sound and picture experience you can create to get people motivated to spend money to come out to the cinema.”
General atmosphere during the IMAX private screening for the movie: “First Man” at the IMAX AMC Theater on October 10, 2018 in New York City.
Lars Niki | Getty Images Entertainment | Getty Images
Across the industry, theater chains big and small are also replacing outdated stadium seating with recliners in a bid to improve the overall cinema experience.
“[We are] really looking at our theaters and making sure all of them are amazing,” said Shelli Taylor, CEO of Alamo Drafthouse. “So if they don’t have recliners, we’re going in and we’re upgrading. We’re giving face-lifts where needed and just really refreshing and making sure that we continue to deliver that premium experience which people grow to love and expect from Alamo.”
In 2022, 15% of all domestic tickets sold were for premium screenings, with the average ticket costing $15.92, according to EntTelligence data. A standard ticket costs an average of $11.29.
So far in 2023, that premium ticket average is higher — $17.33 each — because so many moviegoers saw Disney’s “Avatar: The Way of Water” in premium formats and 3D.
Big blockbusters have always been a driving force of ticket sales for cinemas. Before the pandemic, theater owners relied predominantly on studio advertising — trailers, TV spots and posters — to promote content and drive moviegoers to cinemas. Now, they are putting more in that mix.
Loyalty programs, direct marketing and special events are some of the recent tactics operators have employed to bring in audiences. AMC launched its first-ever advertising campaign in 2021 featuring Nicole Kidman with the tagline “We make movies better.” The company invested around $25 million in the campaign.
Budget-conscious smaller chains have to be a little more creative.
“I’ve had lots of conversations with distributors just talking about better and more efficient ways to market their films,” Warehouse’s Daughtridge said. “Often, that is data marketing and paid social, better trailer placements and [putting] tickets on sale at the right time.”
“I think there’s a lot of low-hanging fruit,” he said of email lists, loyalty programs and social media for personalized marketing.
Warehouse, which will soon open its third location, has also run promotions that range from offering margaritas with movie tickets to special “daddy-daughter” date night showings. Mid-pandemic, Warehouse Cinemas capitalized on the release of Solstice Studio’s “Unhinged” by hosting a car smash event during the film’s fifth week in theaters.
More recently, the chain held “pajamas and popcorn,” a promotion that entitled customers who wore PJs to the cinema a free popcorn. During that promotion, the company showed an Indiana Jones film and the classic animated dinosaur film “The Land Before Time.” Tickets were $5 each.
“The Land Before Time” showings sold 1,400 tickets, Daughtridge said.
“It was one of those events that just popped off,” he said. “We didn’t expect it to do that much business.”
For big chains like AMC, Regal and Cinemark, alternative programming has come in the form of live events, with cinemas setting up streams for concerts, sports and even Dungeons & Dragons campaigns.
Mid-sized chains like Alamo Drafthouse are even delving into the whimsical. When Oscar favorite “Everything Everywhere All at Once” played in cinemas, the theater chain passed out hot dogs to ticket buyers who went to its “feast” event to mark the famous hot dog fingers scene in the film.
Still from A24’s “Everything Everywhere All at Once.”
A24
The company also worked with the Lincoln Zoo ahead of the opening of its new location in the Chicago neighborhood of Wrigleyville to do an outdoor screening of “The Lion King” in the lions’ den at the zoo.
Alamo isn’t the only chain innovating with food and beverages. Concessions have long been a staple at the cinema, but in recent years theater owners have expanded on the traditional popcorn and soda fare.
Cinepolis, which operates more than two dozen cinemas in eight states, is a luxury dine-in theater chain that offers a wide variety of food and beverages, ranging from chicken wings to lobster tacos. Cinepolis hosts “movie and a meal,” a specialized dinner that is catered to a specific new film release.
“For us, the food is crucial for local experience,” Cinepolis CEO Luis Olloqui said, noting how more people have big high-definition TVs at home, coupled with the ability to order out from top notch restaurants.
This trend isn’t likely to slow down, and industry insiders are optimistic about the future of the movie theater business.
“I think we, unfortunately, had some very bad public relation aspects through the course of Covid,” said Rodriguez of the National Association of Theatre Owners. “And now we have to kind of rebuild that muscle with the consumers and remind them, ‘Hey, you know, that’s behind us. Theaters are fine.’”
Medicare will not provide broader coverage of the Alzheimer’s drug Leqembi until it receives more evidence that the treatment is reasonable and necessary, according to the federal agency that runs the program for seniors.
The Centers for Medicare and Medicaid Services rejected a request from the Alzheimer’s Association for unrestricted coverage of antibody treatments approved by the Food and Drug Administration that target brain plaque associated with the devastating disease.
“After careful review of the request and supporting documentation, we are making this decision because, as of the date of this letter, there is not yet evidence meeting the criteria for reconsideration,” CMS said in a statement on Wednesday.
The FDA cleared Leqembi on an expedited basis in January after clinical trial results showed that the treatment slowed cognitive decline by 27% in patients with early Alzheimer’s disease. The drug also carries risks of brain swelling and bleeding.
Leqembi was developed by the Japanese pharmaceutical company Eisai and its partner Biogen. When drugs like Leqembi are approved on expedited basis, Medicare will only cover them for patients who are participating in clinical trials.
“As defined in statute, to provide coverage nationally, CMS is required to examine whether a medication is reasonable and necessary,” the agency said in its statement. “This standard differs from the criteria used by the FDA to assess whether medications are safe and effective.”
Eisai, which completed its phase three trial, has priced Leqembi at $26,500 per year. Due to the drug’s high price and Medicare’s coverage restrictions, seniors are unable to access the treatment.
“CMS’ role is to provide health care coverage. Their role is not to stand between a patient and a doctor when deciding what FDA-approved treatments are appropriate. Their role is not to single out people living with Alzheimer’s and decide that their lives, their independence and their memories are not necessary,” said the association’s president Joanne Pike.
The letter the Alzheimer’s Association sent to CMS in December calling for unrestricted coverage was signed by more than 200 researchers and experts. The American Academy of Neurology has also told CMS that its experts reviewed Eisai’s clinical trial and concluded that the study was well designed and Leqembi provides a clinical benefit.
The Alzheimer’s Association estimates that 2,000 people ages 65 and older progress from mild dementia to a more advanced stage of the disease per day, which would make them ineligible for Leqembi.
CMS said it would provide broader coverage of Leqembi on the same day should the FDA fully approve the treatment. Eisai U.S. CEO Ivan Cheung told CNBC last week that the company expects to receive full FDA approval this summer.
But even with full approval, Medicare’s policy is to cover Alzheimer’s treatments for patients who agree to participate in research studies that collect real-world data. While coverage would be broader, such studies need to be set up and health-care providers have to agree to participate. This would likely still limit the number of people who can access the drug.
But Cheung told CNBC that Medicare could agree to even broader coverage, possibly with no restrictions, if CMS determines that there’s a high level of evidence supporting the treatment.
“With a high level of evidence … the restrictions should be very limited, or maybe even no restrictions and that is Eisai’s position,” Cheung said. “We believe Medicare beneficiaries should have unimpeded access, broad and simple access to Leqembi because the data fulfill those criteria.”
Members of Congress, including 20 senators and more than 70 House members, have called on CMS to change its policy and offer broader coverage of Alzheimer’s antibody treatments. People living in rural and underserved communities face a disadvantage because the institutions that host clinical trials are usually in bigger cities.
“Patients, families, and caregivers living in rural and underserved areas should have the same opportunity for access to treatment,” the House lawmakers told Health and Human Services Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure. “It is an enormous physical and financial burden for Medicare beneficiaries to spend countless hours traveling to limited research institutions that host the trials.”
Medicare adopted the coverage restrictions after controversy over the Alzheimer’s antibody treatment Aduhelm, which was also developed by Eisai and Biogen. The FDA approved that treatment over the objections of its independent advisors, who said the data did not demonstrate a benefit for patients. Three advisors resigned over the FDA decision, and a congressional investigation found irregularities in the approval process.
Join CNBC’s Healthy Returns on March 29th, where we’ll convene a virtual gathering of CEOs, scientists, investors and innovators in the health care space to reflect on the progress made today to reinvent the future of medicine. Plus, we’ll have an exclusive rundown of the best investment opportunities in biopharma, health-tech and managed care. Learn more and register today: http://bit.ly/3DUNbRo
Norfolk Southern CEO Alan Shaw told CNBC he thinks it’s safe for families to return to East Palestine, Ohio, nearly three weeks after toxic chemicals were released following a train derailment earlier this month.
Asked by CNBC’s Morgan Brennan whether he’d bring his children to the town, Shaw said: “Yes, yes, I’ve come back multiple times. I’m drinking the water here. I’ve interacted with the families here.”
The company will also continue to help residents of the town, as well, Shaw said.
On Feb. 3, a Norfolk Southern freight train carrying hazardous chemicals derailed, igniting a dayslong fire. The environmental magnitude of the derailment could remain unknown for years and more testing may be required. Officials have said air levels are safe and the town’s water is free of harmful levels of contaminants, although residents have expressed skepticism about those assurances.
“Our focus right now is on environmental remediation, cleaning up this site, continual air monitoring, water monitoring, financial assistance to the residents of this community, and investing in this community so that the community in East Palestine can thrive,” Shaw said in an interview that aired Tuesday.
Earlier Tuesday, the federal Environmental Protection Agency ordered the company to handle and pay for all cleanup efforts. It will require Norfolk Southern to clean any contaminated soil and water resources, reimburse the EPA for cleaning services and participate in public meetings at the EPA’s request.
A company spokesperson told CNBC Norfolk Southern has been in communication with the agency and in compliance with its requests since the incident.
Ron Fodo, Ohio EPA Emergency Response, looks for signs of fish and also agitates the water in Leslie Run creek to check for chemicals that have settled at the bottom following a train derailment that is causing environmental concerns on February 20, 2023 in East Palestine, Ohio.
Michael Swensen | Getty Images
Three days after the derailment, the company’s independent consultant and the Ohio EPA recommended unified command for a controlled release to burn off toxic chemicals, including known carcinogens.
“The fact that we knew at that time that the pressure relief valves on the cars had failed, temperatures were rising, caused our independent expert to become very concerned about the potential for an uncontrolled explosion that would shoot harmful gas and shrapnel into a populated community,” Shaw said.
The air monitoring picked up no traces of toxic chemicals, officials said, although Shaw acknowledges “how it could scare folks.”
Ohio opened a new health clinic Tuesday to address increasing reports of headaches, nausea and rashes in East Palestine. Worried residents also reported dead fish and chickens as authorities said it’s safe to return. As early as this week, medical teams from the U.S. Centers for Diseases Control and Prevention and the US Department of Health are expected to arrive in the community.
Shaw said air monitoring was installed within an hour of the derailment, and water monitoring was in place several hours afterward. He said all tests for air and water have come back clean, but he said the community can get additional air and water testing in their homes.
“If folks are experiencing symptoms with which they’re not accustomed, I would strongly encourage them to go see a trusted medical professional,” Shaw said, acknowledging it has been a “traumatic experience.”
Tests have revealed no signs of carcinogens including vinyl chloride in the environment, officials said. Still, there remains the possibility that the full impact won’t surface until years from now. Shaw said some researchers have said this is not a concern and testing will continue into the future.
Shaw said the company so far removed about 450 cubic yards of contaminated soil and secured about 1.1 million gallons of contaminated water. He said the company will continue to “do the right thing for this community” and see the recovery effort all the way through. He did not lay out a time frame.
Shaw said it’s safe for families to return to the community as environmental remediation with the Ohio EPA is underway. He said Norfolk Southern has reimbursed or committed a “downpayment” of $6.5 million to East Palestine and will continue financial assistance to residents.
The company previously offered residents $1,000 “inconvenience” checks, but a Cleveland attorney cautioned residents these checks would get residents to waive future claims against the company. Shaw in the interview denied the lawyer’s claims after the company made public statements that doing testing absolved Norfolk Southern of no liability.
“I know they’re hurt. I know they’re scared. I know they’re confused. They’re looking for information and who to trust,” Shaw said.
Shaw said Norfolk Southern is fully cooperating with the NTSB and the FRA to come up with the root cause of the derailment. He avoided talking about security footage showing a wheel shooting off sparks about 20 miles before the derailment.
“We’re going to be here tomorrow. We’re going to be here a year from now. We’re going to here five years from now. We’re going to do what’s right for this community and help this community get back on its feet and help this community thrive,” Shaw said.
Transportation Secretary Pete Buttigieg sent a letter Sunday to Norfolk Southern, warning that the company must “demonstrate unequivocal support for the people” of East Palestine.
Buttigieg wrote that Norfolk Southern and other rail companies have “spent millions of dollars in the courts and lobbying members of Congress to oppose common-sense safety regulations, stopping some entirely and reducing the scope of others.”
Some companies have adopted precision-scheduled railroading, which includes running longer trains, and cutting costs and headcounts to create a more effective network — and potentially profit.
In response, Shaw said Norfolk Southern invests over $1 billion a year in “science-based soutions,” including maintaining tracks, equipment and technology.
Sen. Sherrod Brown, D-Ohio, said in a CNN interview that railroads “are simply not investing the way they should in car safety and the rail lines themselves,” resulting in layoffs and stock buybacks.
“It’s pretty clear that our safety culture and our investments in safety didn’t prevent this accident,” Shaw said in response. “We need to take a look at this and see what we can do differently and what we can do better.”
Ethan Hawke stars in Blumhouse and Universal’s “The Black Phone.”
Universal
The world of video games is about to get scarier.
Blumhouse, the powerhouse horror movie and TV production company, said Tuesday that it is launching Blumhouse Games.
“For some time we have been looking to build out a team to start accessing the growth opportunity in interactive media,” said Abhijay Prakash, president of Blumhouse. “When we sat with Zach and Don they articulated an approach that resonated with Blumhouse’s model and we knew it was a perfect place for us to start our push into the interactive space.”
Blumhouse Games will partner with independent game developers and target indie-budget games of under $10 million. This is a similar strategy to how the company handles its filmed content production. Blumhouse typically operates under small production budgets and then sees large gains at the box office.
The company has revolutionized the horror genre in the last decade, turning small budget flicks into huge box-office hits. The studio has been responsible for the profitable and popular “Paranormal Activity” films as well as the Academy Award-winning “Get Out.”
“Paranormal Activity,” which was released in 2009, had a budget of just $15,000 and went on to make more than $107 million in the U.S. and nearly $200 million worldwide.
The company plans to invest in horror-themed games for consoles, PCs and mobile devices.
To lead Blumhouse Games, the company tapped video game industry veterans Zach Woods as the group’s president and Don Sechler as chief financial officer.
Wood has been a video game producer for more than 25 years and published games on every platform including Game Boy, Playstation and Xbox. He has worked on indie projects like “Sound Shapes” and “Hohokum” as well as bigger projects like “Prey: Mooncrash” and “Redfall” for Arkane and Bethesda.
Sechler, who will head the finance department, has previously worked for Sony and helped reform PlayStation’s relationship with third party game creators.
Blumhouse is also working to merge with “The Conjuring” director James Wan’s Atomic Monster production company. The deal is expected to close this summer.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal has a distribution deal with Blumhouse.
Customers exit a Walmart store on January 24, 2023 in Miami, Florida. Walmart announced that it is raising its minimum wage for store employees in early March, store employees will make between $14 and $19 an hour.
Joe Raedle | Getty Images News | Getty Images
Walmart on Tuesday topped holiday-quarter earnings expectations, as the discounter said it drew budget-conscious shoppers searching for food, gifts and household items at a lower price.
But shares sunk in premarket trading, after the big-box retailer gave a weaker-than-expected outlook for the year ahead.
The company said it expects same-store sales for Walmart U.S. to rise between 2% and 2.5% excluding fuel, in the fiscal year ahead. That’s below analysts’ expectations for 3% growth, according to StreetAccount. It anticipates adjusted earnings per share to range from $5.90 to $6.05, excluding fuel.
Walmart’s CFO John David Rainey told CNBC shoppers are still buying fewer discretionary items, as grocery prices remain elevated. He said that factored into Walmart’s predictions for the year ahead.
“The consumer is still very pressured,” he said. “And if you look at economic indicators, balance sheets are running thinner and savings rates are declining relative to previous periods. And so that’s why we take a pretty cautious outlook on the rest of the year.”
Home Depot, which also reported fiscal fourth-quarter earnings on Tuesday morning, also shared a softer outlook. It said it expects same-store sales to be approximately flat in the coming fiscal year.
Here’s what Walmart reported for the fiscal fourth quarter that ended Jan. 31, according to Refinitiv consensus estimates:
Earnings per share: $1.71, adjusted, vs. $1.51 expected
Revenue: $164.05 billion vs. $159.72 billion expected
Walmart reported a net income of $6.28 billion, or $2.32, up from $3.56 billion, or $1.28, a year earlier.
Revenue of $164 billion marked a 7.3% year-over-year increase.
Same-store sales for Walmart U.S. rose 8.3%, excluding fuel. The key industry metric that includes sales from stores and clubs open for at least a year. E-commerce sales jumped by 17% year over year for Walmart U.S.
The company is not only the nation’s largest retailer. It’s also a grocery powerhouse, a factor that has steadied sales and driven foot traffic as Americans watch the budget because of high inflation.
Walmart’s reputation for value has helped the retailer – as has its large grocery business. It is the largest grocer in the country by revenue.
At Sam’s Club, same-store sales rose 12.2%, excluding fuel.
Shares of Walmart closed on Friday at $146.44, bringing the company’s market cap to nearly $395 billion. The company’s shares are up about 3% so far this year, underperforming the S&P 500’s approximately 6% gain during the same period.
A sign for hire is posted on the window of a Chipotle restaurant in New York, April 29, 2022.
Shannon Stapleton | Reuters
Job cuts are rising at some of the biggest U.S. companies, but others are still scrambling to hire workers, the result of wild swings in consumer priorities since the Covid pandemic began three years ago.
Tech giants Meta, Amazon and Microsoft, along with companies ranging from Disney to Zoom, have announced job cuts over the past few weeks. In total, U.S.-based employers cut nearly 103,000 jobs in January, the most since September 2020, according to a report released earlier this month from outplacement firm Challenger, Gray & Christmas.
Meanwhile, employers added 517,000 jobs last month, nearly three times the number analysts expected. This points to a labor market that’s still tight, particularly in service sectors that were hit hard earlier in the pandemic, such as restaurants and hotels.
The dynamic is making it even harder to predict the path of the U.S. economy. Consumer spending has remained robust and surprised some economists, despite headwinds such as higher interest rates and persistent inflation.
All of it is part of the Covid pandemic’s “legacy of weirdness,” said David Kelly, global chief strategist at J.P. Morgan Asset Management.
The Bureau of Labor Statistics is scheduled to release its next nonfarm payroll on March 3.
Some analysts and economists warn that weakness in some sectors, strains on household budgets, a drawdown on savings and high interest rates could further fan out job weakness in other sectors, especially if wages don’t keep pace with inflation.
Wages for workers in the leisure and hospitality industry rose to $20.78 per hour in January from $19.42 a year earlier, according to the most recent data from the Bureau of Labor Statistics.
“There’s a difference between saying the labor market is tight and the labor market is strong,” Kelly said.
Many employers have faced challenges in attracting and retaining staff over the past few years, with challenges including workers’ child care needs and competing workplaces that might have better schedules and pay.
With interest rates rising and inflation staying elevated, consumers could pull back spending and spark job losses or reduce hiring needs in otherwise thriving sectors.
“When you lose a job you don’t just lose a job — there’s a multiplier effect,” said Aneta Markowska, chief economist at Jefferies.
That means while there might be trouble in some tech companies, that could translate to lower spending on business travel, or if job loss rises significantly, it could prompt households to pull back sharply on spending on services and other goods.
Some of the recent layoffs have come from companies that beefed up staffing over the course of the pandemic, when remote work and e-commerce were more central to consumer and company spending.
Amazon last month announced 18,000 job cuts across the company. The Seattle-based company employed 1.54 million people at the end of last year, nearly double the number at the end of 2019, just before the pandemic, according to company filings.
Microsoft said it’s cutting 10,000 jobs, about 5% of its workforce. The software giant had 221,000 employees as of the end of June last year, up from 144,000 before the pandemic.
Tech “used to be a grow-at-all-costs sector, and it’s maturing a little bit,” said Michael Gapen, head of U.S. economic research at Bank of America Global Research.
Other companies are still adding employees. Boeing, for example, is planning to hire 10,000 people this year, many of them in manufacturing and engineering. It will also cut around 2,000 corporate jobs, mostly in human resources and finance departments, through layoffs and attrition. The growth aims to help the aerospace giant ramp up output of new aircraft for a rebound in orders with large sales to airlines like United and Air India.
Airlines and aerospace companies were devastated early in the pandemic when travel dried up and are now playing catch-up. Airlines are still scrambling for pilots, a shortage that has limited capacity, while demand for experiences such as travel and dining has surged.
Chipotle is planning to hire 15,000 workers as it gears up for a busier spring season and to support its expansion.
Businesses large and small are also finding they have to raise wages to attract and retain workers. Industries that fell out of favor with consumers and other businesses, such as restaurants and aerospace, are rebuilding workforces after shedding workers. Walmart said it would raise minimum pay for store employees to $14 an hour to attract and retain workers.
The Miner’s Hotel in Butte, Montana, raised hourly pay for housekeepers by $1.50 to $12.50 for that position in the last six weeks because of a high turnover rate, Cassidy Smith, its general manager.
Airports and concessionaires have also been racing to hire workers in the travel rebound. Phoenix Sky Harbor International Airport has been holding monthly job fairs and offers some staff child-care scholarships to help hiring.
Austin-Bergstrom International Airport, where schedules by seats this quarter has grown 48% from the same period of 2019, has launched a number of initiatives, such as $1,000 referral bonuses, and signing and retention incentives for referred staff.
The airport also raised hourly wages for airport facilities representatives from $16.47 in 2022 to $20.68 in 2023.
“Austin has a high cost of living,” said Kevin Russell, the airport’s deputy chief of talent.
He said employee retention has improved.
Electricians, plumbers and heating-and-air conditioning technicians in particular, however, have been difficult to retain because they can work at other places that aren’t 24/7 and at at higher pay, he said.
Many companies’ new workers need to be trained, a time-consuming element for some industries to ramp back up, even if it’s gotten easier to attract new employees.
“Hiring is not a constraint anymore,” Boeing CEO Dave Calhoun said on an earnings call in January. “People are able to hire the people they need. It’s all about the training and ultimately getting them ready to do the sophisticated work that we demand.”
— CNBC’s Amelia Lucas contributed to this article.
Paul Rudd is Scott Lang, aka Ant-Man, alongside Johnathan Majors as Kang the Conqueror in “Ant-Man and the Wasp in Quantumania.”
Disney
Disney and Marvel Studios’ “Ant-Man and the Wasp: Quantumania” scored an estimated $104 million at the domestic box office during its opening weekend.
The 31st Marvel Cinematic Universe film kicked off phase five of the 15-year-old franchise and established the next overarching villain for the series — Kang (Jonathan Majors). The character was first seen in the Disney+ series “Loki.”
“Quantumania’s” domestic haul is nearly double what the first standalone Ant-Man film opened to in 2015 and marks the 31st consecutive MCU release to debut at number one at the domestic box office.
“Marvel has perhaps been more under the microscope in post-Endgame times than they’re used to with several films and streaming series occasionally not registering as well with critics and/or audiences as the brand is used to, which made this release even more important as it promises to kickstart Phase 5,” said Shawn Robbins, chief analyst at BoxOffice.com.
“Although some critics didn’t take to the third Ant-Man entry, audiences still turned out for the film in strong numbers to the tune of more tickets sold on opening weekend than for any prior Ant-Man release,” he said.
Internationally, “Quantumania” took in $121 million, bringing its estimated global haul for the three-day spread to $225 million.
“The power of the Marvel brand to drive moviegoers to the multiplex is undeniable and the excitement surrounding phase five of the MCU makes ‘Ant-Man and the Wasp: Quantumania’ essential viewing for any fan looking to jumpstart their enthusiasm for this new era in the ongoing Marvel saga,” said Paul Dergarabedian, senior media analyst at Comscore.
The film is expected to drive more than seven million patrons to theaters this weekend, according to data from EntTelligence. That’s more than double what Sony’s “Uncharted” lured in during last year’s Presidents Day weekend.
“This Presidents weekend boasts the first true blockbuster opener of 2023,” said Comscore’s Dergarabedian. “‘Ant-Man and the Wasp: Quantumania’ sets into motion what looks to be week after week of solid moviegoing and creates momentum for a solid summer movie season.”
Additionally, 28% of ticket buyers opted for premium format theaters, paying an average of $4.29 more per ticket.
Higher foot traffic and higher ticket spending are good signs for the overall movie theater industry, which suffered considerably during the pandemic and is still recovering.
“We often talk about dates circled on the calendar as potential inflection points, and this weekend was the latest for the movie industry,” said Robbins of BoxOffice.com. “After a brief dip in tentpole releases following the holidays, a better-than-expected January and this healthy result from ‘Quantumania’ pave the way for a significant pick-up in high-profile theatrical content once March begins.”
“All told, 2023 is still in its infancy but is thus far living up to expectations as a year theaters and studios can be enthused about,” he said.
A general view of the “SUPER NINTENDO WORLD” entrance at Universal Studios Hollywood on February 16, 2023 in Universal City, California.
Rodin Eckenroth | Getty Images Entertainment | Getty Images
Enter the iconic green warp pipe and snake your way into Universal Studios Hollywood’s newest theme park land: Super Nintendo World.
Nearly a decade in the making, this expansion to Universal’s California-based park is part of a broader partnership with video game company Nintendo that encompasses movies and merchandise. The area, a carved out section beyond Universal’s Jurassic World and Transformers areas, opened Friday to the general public.
Super Nintendo World features an augmented reality Mario Kart ride, a Toad-inspired restaurant and a stocked-up merchandise hub filled with shirts, hats, plush and themed popcorn canisters. There are also meet-and-greets with Mario, Luigi and Princess Peach.
The land, sequestered away from other parts of the park, is small, but packed with eye candy and the constant ding of parkgoers tapping question mark adorned bricks. Part of Universal’s lower studio lot was demolished to make room for the new world and new soundstages were erected or relocated to other areas on the expansive backlot.
“What we were able to do was actually have the size work for us,” said Jon Corfino, vice president of Universal Creative. “If you take a look around, I think we are successful at creating this very immersive, enclosed and yet intimate environment where you really feel like you’ve stepped into the game. Because you don’t really see anything else around you and you’re totally contained.”
Mario poses at the “SUPER NINTENDO WORLD” welcome celebration at Universal Studios Hollywood on February 16, 2023 in Universal City, California.
Rodin Eckenroth | Getty Images Entertainment | Getty Images
It’s unclear how much Universal invested in the project, which opens less than two months before the company’s movie studio releases its animated “The Super Mario Bros. Movie,” but it seems confident in its launch.
“The parks business … it’s never been better for us,” NBCUniversal CEO Jeff Shell said in January. “We had a record year last year.”
Shell noted that growth is slow domestically, but that the company has “found our footing” in Japan, where it opened a Super Nintendo World in March 2021. Last December, Shell told investors during a UBS conference that the Nintendo land in Japan was driving a lot of attendance to the international park and that those results are encouraging considering the big bets the company made for several Nintendo lands, including the one in Universal Studios Hollywood.
The company has plans to bring similar lands to its much-anticipated Epic Universe in Florida and Universal Studios Singapore in 2025.
Here’s a look at Universal Studios Hollywood’s new Super Nintendo Land:
As guests exit the warp pipe, they find themselves inside Princess Peach’s Castle. The area is mostly a photo opportunity, but also sets the backdrop of the encased and immersive land.
Across the way, for about $40 parkgoers can purchase power-up bands that can be used to play mini-games within the land and unlock digital coins and badges on the Universal Studios Hollywood app.
Princess Peach’s castle in Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
The bands come in six styles based on major characters from Super Mario Bros. — Mario, Luigi, Princess Peach, Yoshi, Toad and Princess Daisy. The band character you choose coincides with with “team” you are on during your time in the land and all of your digital coin collection goes towards your own personal score and the team score.
The bands are an extension to the land and not required for guests to enjoy the ride or dining options within the park.
Essentially, the story line is that Bowser Jr. has stolen golden keys from the Mushroom Kingdom and guests need to collect three in order to gain access to a final boss battle with the little Koopa. Guests can participate in physical mini-games to get these keys including: Goomba Crazy Crank, Koopa Troopa POWer Punch, Piranha Plant Nap Mishap and Thwomp Panel Panic.
Collecting three keys allows guests to enter into Bowser Jr.’s lair and compete in a special mini-game.
The main attraction in Super Nintendo World is Mario Kart: Bowser’s Challenge.
To get to the ride, parkgoers must pass through Bowser’s Castle. The queue winds through different corridors and showcases a collection of trophies, memorabilia and Bowser’s plans to defeat Team Mario in the upcoming race.
Universal Studios Hollywood employees await guests outside Mario Kart: Bowser’s Challenge in Super Nintendo World.
Sarah Whitten | CNBC
The ride itself is multifaceted. At its most basic, it is a race of Team Mario vs. Team Bowser. Layered over a traditional racing coaster is an augmented reality shooter game.
Racers are prompted to turn the steering wheel to navigate the racing course and encouraged to shoot shells at rival racers and obstacles. Pay attention to the pre-show which indicates the racers you should target and the ones you should let breeze by on the raceway.
Statue of Bowser in Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
Corfino explained that the team decided to use AR technology because it was more of a social experience. Guests could wear clear plastic visors on the ride and see their friends and family as well as the immersive animation of the Nintendo racers.
He called the AR “transparent technology,” something that would disappear and allow guests to be completely immersed in the experience.
Pre-show animation guides guests on how to wear a specialized Mario visor that will be used during the ride. There is a toggle on the back to tighten or loosen the apparatus.
Mario Kart visors from Mario Kart: Bowser’s Challenge at Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
For the most part, the experience is seamless. Racers turn their head to see fellow racers, question-mark boxes filled with shells and upcoming obstacles.
However, those with glasses may find it difficult to see throughout the ride. The visor fits snuggly to the forehead. There isn’t a lot of room for eyewear between the visor and the plastic shield that attaches in the ride vehicle.
View of onboarding for Mario Kart: Bowser’s Challenge in Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
Additionally, Universal has faced criticism for size restrictions on several of its theme park rides domestically. Mario Kart: Bowser’s Challenge, too, saw some blowback for guidelines that stated the right may be unsuitable for riders with waistlines over 40 inches.
Merchandise available at 1-UP Factory inside Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
Riders exit through the gift shop filled with Nintendo character merchandise.
Super Nintendo World’s signature restaurant is called the Toadstool Cafe and its entryway is shaped like a giant red-capped mushroom.
Chef Toad oversees the kitchen which makes a collection of themed salads and burgers as well as spaghetti and meatballs and a short rib special.
Toadstool Cafe located insider Super Nintendo World at Universal Studios Hollywood.
Sarah Whitten | CNBC
Guests order their food, receive their drinks and are whisked away by the dining team to their seats.
There are video screens throughout the space that act as windows into the Mushroom Kingdom. Throughout your stay you may see multi-colored Mushroom People pass by the frames or battle it out in the skies against enemy invaders.
Toadstool Cafe during a media preview of Super Nintendo World theme park at Universal Studios Hollywood in Universal City, California, US, on Thursday, Feb. 16, 2023.
Bloomberg | Getty Images
The restaurant’s signature drink is called the Super Star Lemon Squash. It contains honey lemon soda and tropical boba with mango stars on top.
For dessert, guests can choose from a question block shaped tiramisu, a Mr. Beanpole cake, which is a twist on an Italian cake, or a Princess Peach cupcake.
A Princess Peach cupcake inside Toadstool Cafe during a media preview of Super Nintendo World theme park at Universal Studios Hollywood in Universal City, California, US, on Thursday, Feb. 16, 2023.
Bloomberg | Getty Images
Super Nintendo World is open to the general public and will not require advanced virtual queuing in order to enter.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
The Food and Drug Administration’s independent advisors on Wednesday unanimously recommended over-the-counter use of the nasal spray Narcan to reverse opioid overdoses, which would significantly expand access to the life-saving treatment.
Emergent BioSolutions‘ Narcan is the most commonly sold treatment for opioid overdoses. The FDA is expected to make a decision by March 29 on whether to allow people to buy the four milligram nasal spray without a prescription. The agency is not required to accept its advisors recommendation, though it typically does so.
Emergent BioSolutions said Narcan would be available for the over-the-counter market by late summer if the FDA approves it next month. The company has not yet disclosed how much it would cost.
“We have been working on distribution plans with key stakeholders like retailers and government leaders,” said Matt Hartwig, a spokesperson for the company.
Most states have already issued blanket prescriptions that allow pharmacies to distribute Narcan, generically known as naloxone, without the patient having to present a script. But FDA approval of Narcan for over-the-counter use would allow more people to acquire the treatment more easily in more places.
“If naloxone becomes a nonprescription product, it may be sold in many venues previously unavailable to consumers, including vending machines, convenience stores, supermarkets and big box stores, just like other nonprescription products,” Jody Green, an official at the FDA’s nonprescription drug division, told the advisory committee Wednesday.
Since 1999, more than 564,000 people have died from opioids in the U.S. in three waves — first from prescription opioids, then from heroin and most recently from fentanyl, according to the Centers for Disease Control and Prevention. Opioid overdose deaths spiked 17% during the pandemic from about 69,000 in 2020 to nearly 81,000 in 2021.
The Trump administration first declared the opioid epidemic a public health emergency in 2017. The Biden administration has renewed the emergency declaration every 90 days since the president took office.
“Each day 187 people will die — this is absolutely tragic as we think of not only the individuals themselves, but the families, the communities, the workplaces. This has profound human impact and we are all impacted from this,” Manish Vyas, senior vice president of regulatory affairs at Narcan maker Emergent BioSolutions, told the committee.
Scott Hadland, head of adolescent medicine at Massachusetts General Hospital, said the widespread infiltration of fentanyl into the nation’s drug supply has increased the risk of overdoses. Many people who are exposed to fentanyl take counterfeit pills that they thought were prescribed but actually contain the highly potent and often deadly opioid, Hadland said.
“And increasingly there are secondhand exposures that are also rising,” Hadland, who participated in Emergent BioSolutions’ presentation, told the committee. “We’re seeing rising overdose deaths among toddlers who are coming across fentanyl in public settings or fentanyl that may be elsewhere in the home.”
Hadland said he tells parents to to keep Narcan at their home in case of an emergency. He compared it to a fire extinguisher that families should have for safety reasons but hopefully will never have to use.
“Unfortunately for most young people, families and community members all across this country, current avenues of access are challenging,” Hadland said.
Dr. Bobby Mukkamala of the American Medical Association said Narcan should be as easy to obtain as Tylenol to treat a headache or a decongestant for a stuffy nose. The life-saving nasal spray should be just as common in public places as AED devices that are used to treat people suffering from heart attacks.
Jessica Hulsey, executive director of the Addiction Policy Forum, told the committee during a public comment section that Narcan needs to be priced affordably at no more than $20 per dose if it’s sold over the counter. Narcan is packaged as single doses and it can take multiple doses to reverse an overdose from highly potent fentanyl.
Narcan displaces opioids that bind to receptor sites in a person’s nervous system. By displacing and blocking opioids, the nasal spray prevents fatal overdoses by reversing respiratory depression, said Gay Owens, head of global medical affairs at Emergent BioSolutions.
But Narcan has to be administered as soon as an overdose is suspected, which is why it’s crucial to make sure the instructions for using the nasal spray are simple, the FDA’s Green said.
In a study sponsored by Emergent BioSolutions, more than 90% of 71 participants understood over-the-counter label directions and used the Narcan device correctly during a simulated overdose emergency using mannequins. The participants included people with varying levels of literacy, and both adults and adolescents.
But some participants were confused by the five-step instructions because they were split across the side and back panels of the carton, said said , senior pharmacist at the FDA division that monitors errors in administering medicine. This confusion could result in delayed administration or errors in using the Narcan device correctly when time is of the essence, according to Shah.
These instances occurred despite the fact that the participants were allowed as much time as needed to familiarize themselves with the Narcan instructions, which may not be the case in a real-world overdose emergency, according to Shah.
“Therefore, the data collected does not capture this highest-risk use scenario,” said Shah.
The FDA has proposed that Emergent BioSolutions place all five instructions in sequential order on the back panel of the carton and also include instructions in the device blister pack. The company presented a mockup at the advisory meeting, but the FDA said it has not evaluated it yet.
Ford workers produce the electric F-150 Lightning pickup on Dec. 13, 2022 at the automaker’s Ford Rouge Electric Vehicle Center (REVC).
Michael Wayland | CNBC
DETROIT – Ford Motor has paused production and shipments of its electric F-150 Lightning pickup due to a potential battery issue, the company said Tuesday.
Ford spokeswoman Emma Bergg declined to disclose details of the possible battery issue, which is being investigated after a vehicle displayed a potential problem as part of the automaker’s pre-delivery quality inspections.
The stop-shipment order and halt in production was issued at the beginning of last week, according to Bergg. It adds to ongoing “execution issues” detailed to investors earlier this month by Ford CEO Jim Farley.
Ford has not established a timeline for when production and the shipments will resume, Bergg said.
“The team is diligently working on the root cause analysis,” Bergg said, adding the company is “doing the right thing by our customers” to resolve any potential issues before resuming production and shipments.
Bergg said the company is unaware of any incidents or issues associated with the potential battery issue. There is no stop-sale for vehicles already on dealer lots, meaning dealers can continue to sell vehicles they already have on hand.
The F-150 Lightning is being closely watched by investors, as it’s the first mainstream electric pickup truck on the market and a major launch for Ford.
Automakers routinely have issues and recalls associated with vehicles but problems with batteries are of particular concern and interest, as the automakers invest billions of dollars in the vehicles.
One of the most notable issues has been with General Motors’ Chevrolet Bolt EVs. The Detroit automaker had to recall all of the vehicles built starting two years ago to address fire issues caused by “rare manufacturing defects” at facilities of its battery supplier LG Battery Solution.
For nearly two decades, Vita Coco has sold its coconut water to health-conscious consumers as a fresh way to hydrate. This year, it’s changing the pitch.
The beverage company is pushing its namesake brand into new use cases and occasions, partnering with Diageo on a canned cocktail and marketing the drink as a hangover aid.
Co-founder Mike Kirban compared Vita Coco’s transformation to that of Ocean Spray, the agricultural cooperative that sells cranberry products.
“Ocean Spray is a brand that’s four times our size, that’s all based on one ingredient,” the company’s executive chairman told CNBC. “And we should be bigger than Ocean Spray pretty quickly, because I think the coconut is cooler than the cranberry.”
Founded in 2004, Vita Coco started as a coconut water brand but has since expanded into other beverage categories, like energy drinks and water. Its namesake brand still accounts for three-quarters of the company’s revenue, which reached $335.8 million in the first nine months of 2022.
The company went public in October 2021, just before the market for initial public offerings dried up as inflation, the war in Ukraine and economic uncertainty weighed on investors.
Vita Coco’s stock is up less than 1% since its IPO, but it’s fared better than many other consumer companies that went public around the same time, like Sweetgreen and Allbirds.
In May, Kirban transitioned from co-CEO at the company to his current role, leaving Boston Beer veteran Martin Roper as the sole chief executive — another step of Vita Coco’s evolution.
Just months before Vita Coco’s IPO, both Coca-Cola and PepsiCo exited coconut water. Coke sold Zico back to its founder as it slimmed down its portfolio, and Pepsi offloaded O.N.E. as part of the $3.3 billion sale of its juice business.
Despite the beverage giants’ size, they had been unable to compete with Vita Coco, which is credited with bringing coconut water to the U.S. and still holds 50% share of the market, excluding its private-label business.
Their exits from the segment opened a new distribution avenue for Vita Coca. As long as Coke and Pepsi were in the coconut water business, their contracts with venues ranging from stadiums to college campuses shut Vita Coco out.
With the momentum of new growth opportunities, Vita Coco is now pushing into bars and restaurants. Step one of the plan is teaming up with Diageo for three canned cocktails mixing Captain Morgan rum and Vita Coco coconut water: a mojito, a piña colada and a strawberry daiquiri.
“If you go to Brazil or Southeast Asia, coconut water is what you mix with cocktails,” Kirban said. “The idea is to start getting consumers used to drinking coconut water cocktails with the ready to drink with Diageo partnership.”
Kirban said Vita Coco would be partnering with a spirits company for its broader on-premise expansion plans, but declined to name the partner.
Over the last few years, alcohol and nonalcoholic beverage companies have been teaming up, leaning on each others’ brand equity and expertise to gain so-called “share of throat.” For example, Captain Morgan can introduce itself to Vita Coco’s health-conscious, younger consumers, while Vita Coco benefits from the rum’s mass market appeal.
Vita Coco has also been leaning into its reputation as a hangover “cure.”
Since late 2019, the brand has used New Year’s Day as way to pitch hangover recovery kits and subscriptions that feature its products in collaborations with Postmates, Lyft and Reef Kitchens.
This year it’s partnering with DoorDash for a promotion Monday morning following the Super Bowl.
The marketing strategy is something of a reversal, after years of resisting the association.
“With our board, there was always a discussion,” Kirban said. “When you talk marketing, do we want to talk about hangovers? Is that OK for us to talk about?”
And it’s not done there. After the hangover subsides, Vita Coco wants to be the non-dairy milk in your coffee.
In late January, the brand announced it’s partnered with Alfred Coffee, a high-end chain with locations in California and Texas, to create a non-dairy coconut milk for its baristas to use.
Vita Coco plans to expand the product designed specifically for coffee — separate from the coconut milk it sells in supermarkets nationwide — to other coffee shops and eventually to store shelves.
Fast-food chains are looking like the big winners in the fourth quarter — and beyond — as fast-casual and casual-dining restaurants struggle to attract customers.
Many publicly traded restaurant companies haven’t reported their latest quarterly results yet, but for those that have, a pattern is emerging. Inflation-weary customers pulled back their restaurant spending during the holiday season, just as they spent less than expected at retailers. Savvy fast-food chains appealed to those consumers with value menus and enticing promotions, drawing in customers across the income spectrum.
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Generally, the fast-food sector fares better than the rest of the industry during times of economic uncertainty and downturns.
Take McDonald’s, for example. The fast-food giant said U.S. same-store sales climbed 10.3%, helped in part by low-income consumers returning more frequently than they had for the prior two quarters. Executives also credited the success of its Adult Happy Meal promotion and the annual return of the McRib for its strong sales growth. Its U.S. traffic increased for the second consecutive quarter, bucking the industry trend.
Likewise, rival Yum Brands reported solid U.S. demand. Taco Bell’s domestic same-store sales climbed 11%, boosted by increased breakfast orders, the return of Mexican Pizza and its value meals. Pizza Hut’s U.S. same-store sales grew 4%, while KFC’s ticked up 1% as it faced tough year-ago comparisons.
More fast-food earnings are on deck in the coming weeks. Burger King owner Restaurant Brands International is slated to announce its fourth-quarter results on Tuesday, while Domino’s Pizza will post its earnings Feb. 23.
In contrast to McDonald’s and Yum’s strong results, Chipotle Mexican Grill on Tuesday reported quarterly earnings and revenue that fell short of Wall Street’s estimates for the first time in more than five years. CEO Brian Niccol maintained that the burrito chain’s price hikes haven’t led to “meaningful resistance” from customers.
Instead, Chipotle executives presented a laundry list of reasons why its performance disappointed: bad weather, the underperforming launch of Garlic Guajillo Steak, tough comparisons to the previous year’s brisket launch and seasonality.
Customers order from a Chipotle restaurant at the King of Prussia Mall in King of Prussia, Pennsylvania.
Mark Makela | Reuters
“As we got around the holidays, we just didn’t see that pop, that momentum, that we normally see … frankly, we started the quarter soft, and we ended the quarter soft,” Chipotle Chief Financial Officer Jack Hartung said on the company’s conference call, comparing the decline in December to weaker retail sales at that time.
Chipotle said that traffic turned positive in January. However, the chain is facing easy comparisons to a year earlier, when Omicron outbreaks forced Chipotle and other chains to shutter early or temporarily close locations. And Bank of America analyst Sara Senatore noted in a research note on Wednesday that January’s unseasonably warm weather has been supporting demand for the broader industry.
Rival fast-casual chains haven’t reported their fourth-quarter earnings yet. Shake Shack is set to share its results on Feb. 16. However, in early January, it announced preliminary same-store sales growth that fell short of Wall Street’s estimates. Sweetgreen is slated to report its results on Feb. 23, while Portillo’s is scheduled for March 2.
Fast-casual restaurants’ struggles are an even worse sign for the casual-dining segment.
For more than a decade, casual-dining restaurants have struggled to attract customers as Chipotle, Sweetgreen and Shake Shack have stolen their customers. So the likes of Red Lobster and Applebee’s have turned to offering deep discounts or spending big bucks on advertising.
Soaring inflation has compounded the issue, particularly for restaurant companies like Brinker International, which is trying to turn around Chili’s Grill and Bar.
A customer walks towards the entrance of a Brinker International Inc. Chili’s Grill & Bar restaurant in San Antonio, Texas.
Callaghan O’Hare | Bloomberg | Getty Images
At the start of the month, Brinker reported that Chili’s traffic fell 7.6% for the quarter ended Dec. 28. Brinker CEO Kevin Hochman, the former head of KFC’s U.S. business, told analysts on the company’s conference call that the decline was expected as it tries to shed less profitable transactions. Chili’s has hiked its prices and cut down on coupons as part of the strategy.
More full-service restaurants are expected to report their results later this month. Outback Steakhouse owner Bloomin’ Brands is slated to make its announcement on Feb. 16.
Disney said Wednesday it is planning to reorganize into three segments, while also cutting thousands of jobs and slashing costs.
The media and entertainment giant said it would now be made up of three divisions:
Disney Entertainment, which includes most of its streaming and media operations
An ESPN division that includes the TV network and the ESPN+ streaming service
A Parks, Experiences and Products unit
The move marks the most significant action Bob Iger has taken since returning to the company as CEO in November. Disney announced the changes minutes after it posted its most recent quarterly earnings. The announcements also come as Disney engages in a proxy fight with activist investor Nelson Peltz and his firm Trian Management.
“We are pleased that Disney is listening,” a Trian spokesperson said Wednesday.
On Wednesday, during its quarterly earnings call with investors, Disney also announced it would be cutting $5.5 billion in costs, which will be made up of $3 billion from content, excluding sports, and the remaining $2.5 billion from non-content cuts. Disney executives said about $1 billion in cost cutting was already underway since last quarter.
Disney also said it would be eliminating 7,000 jobs from its workforce. That would be about 3% of the roughly 220,0000 people it employed as of Oct. 1, according to an SEC filing, with roughly 166,000 in the U.S. and about 54,000 internationally.
Disney’s stock rose about 5% in off-hours trading.
Media companies, such as Warner Bros. Discovery, have been pulling back on content spending and looking to make their streaming businesses profitable. Heightened competition has led to slowing subscriber growth, and companies have been looking to find new avenues of revenue growth. Some, like Disney+ and Netflix, have added cheaper, ad-supported options.
“We will take a very hard look at the cost of everything we make across television and film,” Iger said on a call with investors Wednesday.
The reorganization has been underway since Iger returned to the helm of Disney, replacing his hand-picked successor Bob Chapek.
The entertainment group will be led by top lieutenants Dana Walden and Alan Bergman, who are each considered contenders to take over for Iger in less than two years. ESPN Chairman Jimmy Pitaro will lead the ESPN segment, while Josh D’Amaro, already the head of Disney’s parks, experiences and products segment, will remain in control.
The future of ESPN under Disney’s ownership has been a question for sometime for investors. Last year, Third Point, which is led by activist investor Dan Loeb, had urged the company to spin out ESPN. Disney and Third Point later reached a deal, after reversing course on its thoughts for the future of ESPN.
Iger addressed speculation that the company may look to spin out ESPN due to the sports network being siloed into its own unit. He noted that while ESPN has been struggling due to cord-cutting, the ESPN brand and programming remains healthy and in-demand.
“We’re not engaged in any conversations or considering a spinoff of ESPN,” Iger said on Wednesday. He said the move was considered “in my absence,” and was concluded it wasn’t the right move for Disney.
Iger did note that he and Pitaro would be more selective on what it spends on sports rights, noting the upcoming negotiations for NBA rights.
We’re not engaged in any conversations or considering a spinoff of ESPN.
Chapek’s removal came shortly after Disney had reported its fiscal fourth quarter earnings, disappointing on profit and certain key revenue segments. Chapek had also warned that Disney’s strong streaming numbers would taper off in the future. He had also told employees shortly thereafter that Disney would be cutting costs through hiring freezes, layoffs and other measures.
Shortly after his return, Iger sent a memo to employees announcing the business would be reorganized, particularly the Disney Media and Entertainment unit. The reorganization immediately meant the departure of Kareem Daniel, the head of the company’s previous media and entertainment unit, and right hand to Chapek.
Iger had said he would put more “decision-making back in the hands of our creative teams and rationalize costs” at the time. The goal would be to have a new structure in place in the coming months, with elements of DMED remaining, CNBC reported. He added during a town hall that he wouldn’t lift the company’s hiring freeze as he reassessed Disney’s cost structure.
On Wednesday, Iger again echoed those comments about returning control to the creative minds at the company.
“Our company is fueled by storytelling and creativity, and virtually every dollar we earn, every transaction, every interaction with our consumers, emanates from something creative,” Iger said Wednesday. “I have always believed that the best way to spur great creativity is to make sure the people who are managing the creative processes feel empowered.”
Tune in to CNBC at 9 a.m. ET Thursday for an exclusive interview with Disney CEO Bob Iger.
A Tesla Model Y on display inside a Tesla store at the Westfield Culver City shopping mall in Culver City, California, U.S., on Thursday, April 14, 2022.
Bing Guan | Bloomberg | Getty Images
DETROIT – The U.S. Treasury said Friday it is changing its definition of an “SUV” to make more electric vehicles from Tesla, General Motors and other automakers eligible for up to $7,500 federal tax credits at higher prices.
The decision follows Tesla CEO Elon Musk publicly criticizing the former standards as well as automakers such as GM and Ford Motor lobbying to change the guidelines ahead of final rules being announced next month.
The change raises the retail price cap to $80,000 from $55,000 for vehicles such as the Tesla Model Y, Cadillac Lyriq, Ford Mustang Mach-E and Volkswagen’s ID.4. Previously some or all models of these vehicles did not qualify because they didn’t weigh enough to be considered an SUV by the Treasury’s standards.
The credits are part of the Biden administration’s $437 billion Inflation Reduction Act, which was approved in August. Under the bill, SUVs can be priced at up to $80,000 to qualify for EV tax credits, while cars, sedans and wagons have to be priced at or under $55,000.
It’s unclear how the decision will impact up to 20% pricing cuts announced by Tesla last month that made the Model Y eligible for the credits. Tesla did not immediately respond for comment.
GM, in an emailed statement, thanked the Treasury and hailed the changes: “The alignment on classification will provide the needed clarity to consumers and dealers, as well as regulators and manufacturers.”
The Alliance for Automotive Innovation, a lobbying group for most automakers operating in the U.S., also commended the decision.
Mike Stocker | South Florida Sun Sentinel | Tribune News Service | Getty Images
The average rate on the 30-year fixed rate mortgage has fallen to 5.99%, according to Mortgage News Daily.
The housing market hasn’t seen the rate with a five handle since a brief blip in early September. Before that, it was in early August.
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The rate started this week at 6.21% and fell sharply Wednesday after Federal Reserve Chairman Jerome Powell said inflation “has eased somewhat but remains elevated,” which was a shift from previous language.
That sent bond yields lower, and mortgage rates loosely follow the yield on the 10-year Treasury.
“Measured steps can continue as long as the economic and inflation data is there to support them. This means rates can make progress down into the 5’s but are unlikely to stampede quickly into the 4’s,” said Matthew Graham, chief operating officer at Mortgage News Daily. “I’m not saying that won’t happen–just that it would take a bit more time than some of the rate rallies we remember from the past.”
Mortgage rates peaked in October with the 30-year fixed at 7.37% and have been sliding since then. For potential homebuyers that means savings. For a consumer purchasing a $400,000 home today with a 20% down payment, the monthly payment is $293 less than it would have been in October.
Lower rates already appear to be juicing buyer interest.
Pending home sales, which measure signed contracts on existing homes, rose in December for the first time in six months. They gained 2% compared with November, according to the National Association of Realtors.
Stocks of the nation’s homebuilders have been on a tear since rates started to fall back and several are seeing 52-week highs Thursday. The U.S. Home Construction ETF is hitting a new one-year high, up over 3% on the day.
Homebuilder stocks are also reacting positively to earnings beats reported this week from PulteGroup and last week from the nation’s largest homebuilder, D.R. Horton. Both builders reported seeing renewed buyer interest in December, attributing that to lower mortgage rates.
Charlie Munger at the Berkshire Hathaway press conference, April 30, 2022.
CNBC
Berkshire Hathaway Vice Chairman Charlie Munger urged the U.S. government to ban cryptocurrencies like China, saying a lack of regulation enabled wretched excess and a gambling mentality.
“A cryptocurrency is not a currency, not a commodity, and not a security,” the 99-year-old Munger said in an op-ed published in the Wall Street Journal Wednesday evening.
“Instead, it’s a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity,” Munger said. “Obviously the U.S. should now enact a new federal law that prevents this from happening.”
Munger, along with his business partner Warren Buffett, have been longtime cryptocurrency skeptics, arguing that they are not tangible or productive assets. Munger’s latest comments came as the crypto industry was plagued with problems from failed projects to a liquidity crunch, exacerbated by the fall of FTX, once one of the world’s largest exchanges.
The cryptocurrency market lost more than $2 trillion in value last year. The price of bitcoin, the world’ largest cryptocurrency, plunged 65% in 2022 and it has rebounded about 40% to trade around $23,824, according to Coin Metrics.
The renowned investor said in recent years, privately owned companies have issued thousands of new cryptocurrencies, and they have become publicly traded without any governmental pre-approval of disclosures. Some has been sold to a promoter for almost nothing, after which the public buys in at much higher prices without fully understanding the “pre-dilution in favor of the promoter,” Munger said.
Munger listed two “interesting precedents” that may guide the U.S. into sound action. Firstly, China has strictly prohibited services offering trading, order matching, token issuance and derivatives for virtual currencies. Secondly, from the early 1700s, the English Parliament banned all public trading in new common stocks and kept this ban in place for about 100 years, Munger said.
“What should the U.S. do after a ban of cryptocurrencies is in place? Well, one more action might make sense: Thank the Chinese communist leader for his splendid example of uncommon sense,” Munger said.
DoubleLine Capital CEO Jeffrey Gundlach said he sees one additional rate hike from the Federal Reserve before the central bank ends its tightening cycle.
“I think one more,” Gundlach said Wednesday on CNBC’s “Closing Bell: Overtime.” “I think it’s tough to make the statement ‘ongoing increases’ with an ‘s’ at the end of the word ‘increase’ and do zero unless you had very substantial change in economic conditions.”
The Fed on Wednesday raised its benchmark interest rate by a quarter percentage point, taking its target range to 4.5%-4.75%, the highest since October 2007. The Fed’s statement included language noting that the central bank still sees the need for “ongoing increases in the target range.”
The so-called bond king said Fed Chairman Jerome Powell had a “clarifying” statement at the press conference Wednesday, saying the real yields are positive across the curve. Gundlach said he was referring to the Treasury Inflation-Protected Securities (TIPS), whose yields have stopped their ascent.
“He’s looking at the TIPS market, which had a huge increase in yields last year. That was a major headwind for risk assets in the stock market,” Gundlach said. “They’ve stopped going up and I have a feeling that real yields are going to not go up in the first part of this year. So that keeps a little bit of runway, I think.”
Stocks staged a big comeback in January, led by beaten-down technology names. The S&P 500 rallied 6.2% in January, notching its best start of the year since 2019. The tech-heavy Nasdaq Composite jumped 10.7% last month for its best monthly performance since July.
In Powell’s press conference, the Fed chief said the central bank could conduct a few more rate hikes to bring inflation down to its target.
“We’ve raised rates four and a half percentage points, and we’re talking about a couple of more rate hikes to get to that level we think is appropriately restrictive,” Powell said. “Why do we think that’s probably necessary? We think because inflation is still running very hot.”
Asked if Gundlach sees the Fed cutting rates this year, he said it’s a coin flip, depending on the incoming inflation data.
“I kind of think that they’ll cut rates in the second half of the year, but I’m not really committed to that idea firmly at all,” Gundlach said.
The widely followed investor also said he believes the odds for a recession this year have decreased, but they are still above 50%.
Vials and a medical syringe seen displayed in front of the Food and Drug Administration (FDA) of the United States logo. FDA finds the COVID-19 vaccine.
Pavlo Gonchar | LightRocket | Getty Images
The Food and Drug Administration on Tuesday said its emergency authorizations of Covid vaccines, tests and treatments will not be impacted by the end of the public health emergency this spring.
President Joe Biden is planning to terminate in May the public health and national emergencies declared in response to the Covid pandemic three years ago, the White House said Monday. The public health emergency gave U.S. health regulators expanded powers to respond faster to the pandemic.
The FDA’s emergency powers, however, aren’t directly tied to public health declaration, according to the agency.
Former Health Secretary Alex Azar made separate determinations in February and March of 2020 under the Food, Drug and Cosmetics Act that the circumstances of the pandemic justified the authorization of vaccines, treatments and tests for emergency use.
The FDA used its emergency powers to authorize the Pfizer, Moderna, Johnson & Johnson and Novavax vaccines. The agency also authorized the oral antivirals Paxlovid and molnupiravir, several antibody treatments as well as numerous tests and other medical devices on an emergency basis.
“Existing emergency use authorizations (EUAs) for products will remain in effect and the agency may continue to issue new EUAs going forward when criteria for issuance are met,” The FDA wrote in post on Twitter Monday.
Emergency authorizations allow the FDA to roll out medical products before they receive the agency’s full approval. This allows the agency to respond more swiftly to public health crises.
