Tag: Retail

Pfizer and BioNTech updated booster shows strong results against new omicron sublineages in fresh analysis of data

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A fresh analysis of data on the immune response generated by the bivalent COVID-19 booster showed strong results against the newer omicron sublineages, Pfizer and German partner BioNTech said Friday.

The bivalent booster targets the BA.4 and BA.5 omicron variants as well as the original virus, and it also appears to be effective against the sublineages dubbed BA.4.6, BA.2.75.2, BQ.1.1 and XBB.1.

The data, which have been posted on the preprint server bioRxiv, show that the booster induces a greater increase in neutralizing-antibody titers than the companies’ original COVID vaccine.

“Based on these findings, the Omicron BA.4/BA.5-adapted bivalent booster may help to provide improved protection against COVID-19 due to Omicron BA.4 and BA.5 sublineages as well as new sublineages that continue to increase in prevalence,” the companies said in a joint statement.

Specifically, one month after a booster dose of the bivalent COVID-19 vaccine, neutralizing-antibody titers against the sublineages increased 3.2-fold to 4.8-fold compared with the original COVID vaccine.

Neutralizing-antibody titers against BA.4.6, BA.2.75.2, BQ.1.1 and XBB.1 increased 4.8-fold to 11.1-fold from prebooster levels following a booster dose of the bivalent vaccine.

The companies
PFE,
-0.72%
BNTX,
+0.08%
said BA.5 is still the most prevalent sublineage in the U.S., accounting for nearly 30% of cases at time of publication, while the emerging BA.1.1 sublineage accounts for nearly 25% of cases and is spreading globally.

But data released by the Centers for Disease Control and Prevention later Friday showed BQ.1 and BQ.1.1 now account for a combined 49.7% of new cases in the week through Nov. 19, while BA.5 accounted for just 24%.64.8%

In the New York region, BQ.1 and BQ.1.1 accounted for 64.8% of new cases, while BA.5 accounted for 14.0%.

The bivalent booster has been granted emergency-use authorization by the U.S. Food and Drug Administration for people ages 5 and older and has also been allowed in the European Union for that group.

The news comes as U.S. COVID cases have been rising again, although the daily average edged lower on Thursday to 39,562, according to a New York Times tracker, down 1% from two weeks ago.

Cases are rising in roughly half the states and falling in the rest, but there are wide discrepancies between individual states. In Nebraska, cases are up 540% from two weeks ago, the tracker shows, followed by Arizona, where they are up 110%; California, where they have climbed 53%; and Colorado, where they are up 50%.

Meanwhile, Kentucky is seeing a 54% decline in cases from two weeks ago, and Michigan cases are down 48%.

The daily U.S. average for hospitalizations is up 2% to 27,818, while the daily average for deaths is down 4% to 325.

Physicians are reporting high numbers of respiratory illnesses like RSV and the flu earlier than the typical winter peak. WSJ’s Brianna Abbott explains what the early surge means for the winter months. Photo illustration: Kaitlyn Wang

Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

Other COVID-19 news you should know about:

• China’s southern manufacturing hub of Guangzhou is planning to build quarantine facilities for nearly 250,000 people to fight surging COVID outbreaks, even as the national government tries to reduce the impact of zero-COVID controls that have confined millions of people to their homes, the Associated Press reported. Guangzhou, a city of 13 million and the biggest of a series of hotspots across China with outbreaks since early October, reported 9,680 new cases in the past 24 hours. That was about 40% of the 23,276 cases reported nationwide.

• Racial disparities in COVID cases and deaths have widened and narrowed over the course of the pandemic, but age-adjusted data still show that Black, Hispanic and American Indian/Alaska Native people have been at higher risk for cases, hospitalizations and deaths, according to a new report from the Kaiser Family Foundation. “While disparities in COVID-19 vaccinations have narrowed over time and have been reversed for Hispanic people, they persist for Black people,” the report found. The pattern is also evident in uptake of the new bivalent booster, with Black and Hispanic people about half as likely as white people to have had one. Black people are also less likely to have access to antivirals, antibody treatments and other therapies.

• The Indian Health Service announced Thursday that all tribal members covered by the federal agency will be offered a vaccine at every appointment when appropriate under a new vaccine strategy, the AP reported. Throughout the pandemic, American Indians and Alaska Natives have had some of the highest COVID vaccination rates across the country. But Indigenous people are especially vulnerable to vaccine-preventable illness, and IHS officials recently noted that fewer patients have been getting vaccines for COVID-19. Monkeypox is now an additional health concern.

• Novavax
NVAX,
-6.11%
said its COVID vaccine has received expanded authorization in Canada as a booster for adults aged 18 and older who had it as their primary shot. The protein-based vaccine has already been approved as a booster in the U.S., European Union and U.K., among other countries, Novavax said.

Here’s what the numbers say:

The global tally of confirmed cases of COVID-19 topped 637.1 million on Friday, while the death toll rose above 6.61 million, according to data aggregated by Johns Hopkins University.

The U.S. leads the world with 98.3 million cases and 1,076,683 fatalities.

The Centers for Disease Control and Prevention’s tracker shows that 228.2 million people living in the U.S., equal to 68.7% of the total population, are fully vaccinated, meaning they have had their primary shots.

So far, just 35.3 million Americans have had the updated COVID booster that targets the original virus and the omicron variants, equal to 11.3% of the overall population.

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November 18, 2022
Tyson recalls 93,000 pounds of beef contaminated with a ‘mirror-like material’
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Tyson Fresh Meats, a division of Tyson Foods Inc.
TSN,
+0.20%,
is recalling 93,697 pounds of ground beef over a possible contamination with a “mirror-like material.”

According to the U.S. Department of Agriculture’s Food Safety and Inspection Service, the ground beef items were packaged on Nov. 2, and the issue was discovered after several customers found this mirror-like material in their meat after purchasing it from a grocery store.
The products part of the Tyson recall are as follows:

10-pound chubs containing “Hill Country fare ground beef 73% lean/27% fat with best before or freeze by: Nov. 25, 2022.”

5-pound chubs containing “Hill Country fare ground beef 73% lean/27% fat with best before or freeze by: Nov. 25, 2022.”

5-pound chubs containing “H-E-B ground chuck ground beef 80% lean/20% fat.”

The USDA advises individuals who purchased these items to throw them away or return them to the place of purchase immediately. The impacted products were sold in retail grocery stores in Texas.

The specific labels for the ground beef that Tyson is recalling can be found here.

See: Flying with Thanksgiving food? TSA dishes up rules for traveling with foodstuffs this holiday season

It’s been a tough time for meat lovers: Last week, the CDC warned that many people should “not eat meat or cheese from any deli counter” unless it was “steaming hot” due to a listeria outbreak.

But there could be some more meat alternatives on the horizon.

The Tyson recall news came as the Food and Drug Administration (FDA) announced on Thursday that meat grown in a laboratory setting is safe for human consumption.

“Advancements in cell culture technology are enabling food developers to use animal cells obtained from livestock, poultry, and seafood in the production of food, with these products expected to be ready for the U.S. market in the near future.,” the FDA said. To be clear, such products are not yet on the U.S. market, but they have now received this preliminary vote of regulatory confidence.

And earlier this week, the CFO of Tyson Foods apologized to investors during a company earnings call over his arrest early on the morning of Nov. 6 after being found sleeping in a house that wasn’t his.
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November 18, 2022
Economy may be in a recession already, Conference Board says, after leading index drops for eighth straight month

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The U.S. leading economic index fell 0.8% in October, the Conference Board said Friday.

Economists polled by The Wall Street Journal had expected a 0.4% fall.

This is the eighth straight decline in the leading index.

The long period of declines suggests “the economy is possibly in a recession,” said Ataman Ozyildirim, senior director of economic research at the Conference Board. He said the data show a recession is likely to start around the end of the year and last through mid-2023.

The coincident index, which measures current conditions, rose 0.2% in October after a 0.1% gain in the prior month. The lagging index increased by 0.1%, matching the September gain.

The LEI is a weighted gauge of 10 indicators designed to signal business-cycle peaks and valleys.

Stocks
DJIA,
+0.59%

SPX,
+0.48%
were trading higher on Friday morning and the yield on the 10-year Treasury note
TMUBMUSD10Y,
3.827%
rose to 3.8%.

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November 18, 2022
Amazon CEO says more layoffs are coming in 2023

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Amazon.com Inc. plans more layoffs, but employees will have to wait until 2023 to see if their jobs are affected.

Chief Executive Andy Jassy said Thursday that while Amazon
AMZN,
-2.34%
already confirmed that it was eliminating jobs in its devices and books businesses, an unknown number of layoffs impacting other teams are still to follow.

See more: Amazon confirms layoffs, becoming latest tech powerhouse to slash roles

“Our annual planning process extends into the new year, which means there will be more role reductions as leaders continue to make adjustments,” he said in a blog post on the company’s corporate site. “Those decisions will be shared with impacted employees and organizations early in 2023.”

While Jassy doesn’t know “exactly how many other roles will be impacted,” he does know “that there will be reductions in our Stores and PXT organizations.” The company already announced a “voluntary reduction offer for some employees” working in PXT, or People Experience and Technology Solutions.

The Wall Street Journal reported earlier this week that Amazon could end up slashing 10,000 jobs.

Jassy took over as Amazon’s CEO in July 2021 and said Thursday that “without a doubt,” the move to cut staff is “the most difficult decision we’ve made” since he’s been in the role.

“It’s not lost on me or any of the leaders who make these decisions that these aren’t just roles we’re eliminating, but rather, people with emotions, ambitions and responsibilities whose lives will be impacted,” Jassy said.

He added that Amazon “has weathered uncertainty and difficult economies in the past, and we will continue to do so.” Jassy emphasized that Amazon will continue to plug away on more established areas like stores, advertising and cloud computing, as well as newer initiatives like Prime Video, the Alexa voice assistant and healthcare.

Amazon joins other technology companies including Meta Platforms Inc.
META,
-1.57%,
Snap Inc.
SNAP,
-1.36%,
Shopify Inc.
SHOP,
-2.05%
and Twitter in recently eliminating jobs. An activist investor earlier this week urged Alphabet Inc.
GOOG,
-0.49%

GOOGL,
-0.50%
to cut positions as well.

See more: Here are the companies in the layoffs spotlight

Shares of Amazon were up 0.3% in after-hours trading Thursday after declining 2.3% in the regular session.

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November 17, 2022
Black Friday surprise: Jeff Bezos tells people NOT to buy cars, refrigerators and other big-ticket items. Critics call him out.

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Billionaire Jeff Bezos, who founded the e-retail behemoth Amazon, has some spending tips as Americans gear up for a holiday shopping season — amid four-decade high inflation and recession worries.

Here’s what he said:

“‘If you’re an individual and you’re thinking about buying a large-screen TV, maybe slow that down, keep that cash, see what happens. Same thing with a refrigerator, a new car, whatever. Just take some risk off the table.’”

Bezos made the comments in a CNN
WBD,
+0.46%
interview that aired this week, the same interview where he pledged to give away most of his fortune in his lifetime.

Why did Bezos offer the tip for consumers and small business to go easy on big-ticket items? He gave one big reason.

“If we’re not in a recession right now, we’re likely to be in one very soon,” he said in the interview, picking up on his cautionary tweet last month that “the probabilities in this economy tell you to batten down the hatches.”

Bezos is currently executive chair at Amazon
AMZN,
-2.34%,
transitioning to the role last year as Andy Jassy took the reins as CEO.

Later this week, Amazon confirmed it was laying off some of its staff in its device and services business — joining a growing list of tech companies, including Facebook parent Meta
META,
-1.57%
— that is laying people off. Amazon’s job cuts could number around 10,000, according to the Wall Street Journal.

“Critics have taken aim at these words of thrift coming from a man — now worth approximately $120 billion — who built Amazon into the online shopping bonanza.”

To be sure, Bezos is not alone is his worries about a potential recession as the Federal Reserve and other central banks fight higher costs by hiking interest rates.

But his advice prompted some guffaws on social media. In a nutshell, critics say these are words of thrift coming from a man — now worth approximately $120 billion — who built Amazon into the online shopping bonanza that lets consumers seamlessly spend money.

As Joshua Becker, a proponent of minimalism wrote on Twitter: “I didn’t hear him mention refraining from Amazon’s Prime Day deals or Black Friday offers, but I recommend adding those items to your list as well.”

Regardless of how anyone feels about hearing spending advice, particularly from one of the world’s richest people, there are some things to consider as events like Black Friday and Cyber Monday approach.

For one thing, maybe there are discretionary expenses where people can cut back. Many Americans are still spending briskly, as Walmart
WMT,
-0.34%
third-quarter earnings and October’s retail-sales numbers recently affirmed. Holiday-spending projections paint the same picture.

Americans will spend between $942.6 billion and $960.4 billion on holiday-season sales this year, according to projections from the National Retail Federation. Last year’s holiday sales totaled $889.3 billion, the trade association said.

“During the third quarter, Americans’ credit-card balances climbed to $930 billion, the biggest annual increase in more than 20 years, according to the National Retail Federation.”

But Americans are planning for the holidays while credit-card balances are increasing — likely because credit cards are helping them keep up with rising costs.

During the third quarter, Americans’ credit-card balances climbed to $930 billion, the biggest annual increase in more than 20 years, according to Federal Reserve Bank of New York data.

While balances grow, so do credit-card interest rates. The annual percentage rate (APR) on new credit-card offers averaged 19.14% in mid-November, according to Bankrate.com. That beats the old record on APRs for new cards, set at 19% three decades ago.

The holiday shopping season is typically when Americans accumulate credit-card debt, pay the debts in the early part of the coming year and repeat the holiday-season debt the following year.

This year, the stakes could be higher if high credit-card bills arrive and a recession-induced job loss follows.

“It’s not the time to overspend and have a problem with paying your bills later,” Michele Raneri, vice president of financial services research and consulting at TransUnion
TRU,
-4.94%,
one of the country’s three major credit bureaus, previously told MarketWatch. “We know the economy is sending mixed messages.”

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November 17, 2022
Orlando Workers Treat Tourists to Holiday Magic and Earn More With Instawork
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The flexible work app matches a network of on-demand hourly workers with Florida businesses

Press Release
–

Nov 17, 2022
SAN FRANCISCO, November 17, 2022 (Newswire.com)
–
Instawork, the leading platform for connecting businesses with skilled workers, announced today the platform’s availability to hourly workers in the Orlando area looking to earn higher wages during the magical holiday season and beyond.

In Orlando, the average hourly pay rate on the Instawork platform is $17 per hour, a vast improvement over the state’s minimum wage of $11 per hour. That steep increase gives Sunshine State residents a way to pay for pricey additions to their household budgets during the holidays. Residents can easily get started by downloading the Instawork app, creating a profile, and finding work opportunities with businesses across the Orlando area.

While Florida recently increased its minimum wage by a dollar as part of its six-year plan to bring the minimum wage to $15 by 2026, flexible workers who join Instawork won’t have to wait years to achieve the increased level of income. They have immediate access to higher pay rates as this is particularly important with current inflation and a recession looming.

More than 48,000 people in Orlando have already downloaded the Instawork app and are working to staff business locations across the area. Common roles for Instawork in Orlando include prep cook, event server, warehouse associate, general labor, and counter staff/cashier.

The news comes following Instawork’s announcement that over 1 million people have joined the app in recent months leading up to the holiday season to fill shifts in the first post-covid holiday season.

“Orlando is a top destination for travel, particularly at the holidays,” said Kira Caban, Instawork’s Head of Strategic Communications. “At this very expensive time of year, local workers can help businesses provide a fantastic customer experience while they make more money. When it comes to holiday gifts, travel costs, and special meals, the difference in pay can be a huge help for families.”

Pros can easily create a profile, find a shift that matches their skills and interests, and start working in as little as 24 hours.

Hourly professionals (Instawork Pros) using Instawork experience:
- Work flexibility: build schedules around personal lives and income goals
- Financial stability: view shift earnings before you work
- Unlimited income potential: work as little or as much as you want
- Get paid quickly: ability to get paid the same day
- Unique and exciting work opportunities
Businesses that rely on Instawork Pros range from nationally-recognized hotels and restaurant groups to some of Orlando’s favorite local hot spots and sports venues. These businesses are consistently matched with quality, reliable Pros to fill available shifts and deliver valuable services. The Instawork platform encourages both hourly workers and businesses to rate each other on a five-star scale after each shift to help match future shifts with those who are best qualified.

Businesses using Instawork experience:
- Quick access to qualified workers in their community
- Improved operational efficiency with quality and reliable staffing
- Increased customer loyalty due to happier staff and better experiences
- Time saved on administrative tasks, returning focus to other top priorities
Instawork is currently staffing businesses in more than 30 markets across the U.S. and Canada. Those interested in learning more about Instawork should visit www.instawork.com or download the app.

About Instawork
Founded in 2016, Instawork is the leading flexible work app for local, hourly professionals. Its digital marketplace connects thousands of businesses and more than three million workers, filling a critical role in local economies. Instawork has been featured on CBS News, the Wall Street Journal, The Washington Post, Associated Press, and more. In 2022, Instawork was ranked in the top 10% of the country’s fastest-growing companies by Inc. 5000 and was included in the Forbes Next Billion Dollar Startup list. Instawork was also named the 2022 ACE Award recipient for “Best Innovation,” one of the “Best Business Apps” by Business Insider. Instawork helps businesses in the food & beverage, hospitality, and warehouse/logistics industries fill temporary and permanent job opportunities in more than 30 markets across the U.S. and Canada. Follow us on Twitter, Instagram, LinkedIn, and Facebook.

Source: Instawork
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November 17, 2022
Republicans clinch slim majority in House, likely signaling gridlock ahead

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Republicans will take over the U.S. House of Representatives two years into President Joe Biden’s term, though their narrow majority looks set to cause headaches for GOP leaders.

Republican hopes for a strong red wave have been dashed, but the Associated Press said Wednesday that the party won enough House seats — 218 — to control that chamber of Congress, as results from the midterm elections continue to be tabulated.

The battle for the U.S. Senate went to the Democrats late Saturday. Democrats will retain their hold on the Senate after winning a key race in Nevada, giving Biden’s party control of at least one chamber of Congress for the next two years.

“Republicans have officially flipped the People’s House!” Rep. Kevin McCarthy, R-Calif., the front-runner to become House Speaker, tweeted late Wednesday. “Americans are ready for a new direction, and House Republicans are ready to deliver.”

While Republicans will control just one chamber of Congress, they now are expected to deliver a check on Biden’s policy priorities, such as by potentially using a debt-ceiling showdown to force spending cuts.

In a statement late Wednesday, President Joe Biden called for bipartisanship: “The American people want us to get things done for them. They want us to focus on the issues that matter to them and on making their lives better. And I will work with anyone — Republican or Democrat — willing to work with me to deliver results.”

Related: Democrats weigh end run around Republicans to raise debt limit

And see: Republican lawmakers likely to target ‘woke capitalism’ after the midterm elections, analysts say

The Republican House majority has yet to be finalized but could be the narrowest of the 21st century, even less than in 2001, when the GOP had a nine-seat majority with two independents.

Washington is likely to face new periods of gridlock, with Democrats also keeping their hold on the White House since Biden still has two years to serve before the 2024 presidential election. That’s after Democrats in the past two years used party-line votes to push through measures such as March 2021’s stimulus law and this past summer’s package targeting healthcare, climate change and taxes.

The House switching to red from blue fits the historical pattern in which a first-term president’s party tends to lose congressional ground in the midterms. The GOP highlighted raging inflation in its effort to win over American voters.

The House seats to flip to the GOP included one held by Democratic Rep. Elaine Luria of Virginia, who lost to Republican challenger Jen Kiggans, as well as two seats in Florida. But Democrats also flipped House seats and won re-elections in bellwether races, with Virginia Rep. Abigail Spanberger and Indiana Rep. Frank Mrvan notching victories.

Read more: Here are the congressional seats that have flipped in the midterm elections

Democrats have had a grip on the House since the 2018 midterms. They’ve run the Senate for two years, controlling the 50-50 chamber only because Vice President Kamala Harris can cast tiebreaking votes.

Among the competitive Senate races, Democrats kept their hold on seats in Arizona, Colorado and New Hampshire, while scoring a pick-up in Pennsylvania. Republicans maintained their control of seats in North Carolina, Ohio and Wisconsin.

Georgia’s Senate contest is headed to a Dec. 6 runoff, but its outcome has become less significant.

Related: Ohio’s J.D. Vance tells MarketWatch he wants to end tax loopholes for tech companies and ban congressional stock trading

Betting markets since late on Election Day have been seeing Democrats staying in charge of the Senate and Republicans winning the House. Ahead of last Tuesday’s voting, betting markets had signaled confidence in GOP prospects for taking over both the Senate and House.

Analysts had said voters last month appeared increasingly focused on Republican issues such as high prices for gasoline
RB00,
-0.35%
and other essentials, at the expense of Democrats’ agenda items such as climate change and abortion rights.

But exit polls suggested that Republicans performed worse than expected because many Democrats and independents voted partly to show their disapproval of former President Donald Trump — and those voters were energized by the Supreme Court’s Dobbs decision that overturned Roe.

See: Anti-Trump vote and Dobbs abortion ruling boost Democrats in 2022 election

The former president announced his 2024 White House run late Tuesday. Earlier Tuesday, House Republicans chose Rep. Kevin McCarthy of California, the current minority leader, as their candidate for speaker. Thirty-one Republicans voted against McCarthy, signaling that he must shore up his support before the vote on the speakership takes place in January. It’s an early sign of how Republicans’ narrow majority is creating turbulence for the House GOP leadership.

Now read: What a Republican-controlled House might mean for tech: Plenty of hand-wringing over Section 230 liability shield

And see: DeSantis viewed as frontrunner for Republican 2024 presidential nomination after Trump’s candidates flop in midterm elections

Plus: Senate Republicans pick Mitch McConnell as their leader, as Rick Scott’s challenge flops

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November 16, 2022
Dow ekes out gain, stocks end higher on signs of easing inflation, but Russia’s war in Ukraine intensifies
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U.S. stocks closed higher Tuesday, but off the session’s best levels, after more data suggested inflation may be slowing and mega-retailer Walmart offered a rosier annual forecast.

The Dow turned negative earlier in the session after the Associated Press reported that Russian missiles crossed into Poland and killed two people, ratcheting up geopolitical tension given Poland is a NATO country.
How stocks traded
- S&P 500 index
  SPX,
  +0.87%
  rose 34.48 points, or 0.9%, to close at 3,991.73.
- Dow Jones Industrial Average
  DJIA,
  +0.17%
  climbed 56.22 points, or 0.2%, ending at 33,592.92, after touching a nearly three-month high of 33,987.06 earlier.
- Nasdaq Composite
  COMP,
  +1.45%
  climbed 162.19 points, or 1.5%, closing at 11,358.41.
On Monday, U.S. stocks finished near session lows after early gains evaporated. The Dow Jones Industrial Average fell 211 points, or 0.6%, while the S&P 500 declined 36 points, or 0.9% and the Nasdaq Composite dropped 226 points, or 2%.

What drove markets

U.S. stocks closed higher Tuesday, after another batch of inflation data showed that whole prices rises were slowing in October for the second straight month.

The Dow’s brief negative turn came after reports that Russian military bombarded Ukraine Tuesday. In the attack, missiles reportedly crossed into Poland, a member of NATO, the Associated Press said, citing a senior U.S. intelligence official.

“Geopolitical concerns obviously are never positive for the market,” said Peter Cardillo, chief market economist at Spartan Capital Securities.

On Tuesday, oil futures settled higher. West Texas Intermediate crude for December delivery rose to $1.05, or 1.2%, reaching $86.92 a barrel.

While markets had started to price in the toll of Russian’s nearly nine-month invasion of Ukraine, it had not priced in an potential escalation of the war, said Kent Engelke, chief economic strategist at Capitol Securities Management.

“Talk about geopolitical angst returning,” Engelke said, later adding, “If there were really missiles shot to Poland and that was really not an accident, wow, that is really increasing the scope of the war.”

A U.S. National Security Council spokesperson said the agency was aware of the news reports out of Poland, but that it cannot confirm the reports or any details at this time.

While international worries clouded the session, there was also encouraging domestic news.

The U.S. producer-price index climbed 8% over the 12 months through October, the Labor Department said Tuesday, easing from September’s revised 8.4% increase. Last week, stocks surged after the October consumer-price index rose more slowly than expected.

See: Wholesale prices rise slowly again and point to softening U.S. inflation

Tuesday’s PPI report helped support the notion that inflation has peaked, at least for now.

“Today, it’s really about the PPI and the market reaction to it,” Steve Sosnick, chief strategist at Interactive Brokers
IBKR,
+3.45%,
said in a Tuesday morning interview before the reports of missiles crossing into Poland.

Markets ripped higher last Thursday after October’s consumer-price index showed signs of easing. The same dynamic was playing out Tuesday, but the response now has been “a bit more muted” because it’s an iteration on inflation data that investors already had been starting to see, Sosnick said.

So, is the economy really at peak inflation? It’s too early to say for sure, according to Sosnick. Still, the PPI numbers, paired with last week’s CPI reading “does add evidence to that narrative,” he added.

Walmart’s third quarter earnings also were buoying markets, Sosnick said. The massive retailer’s beat on earnings offers a glimpse at the minds and wallets of many American consumers. For anyone who worries about consumers “getting highly defensive” and not spending, Walmart’s numbers are “counter evidence.”

In other news, the first face-to-face meeting between President Joe Biden and President Xi Jinping helped support stocks listed in China and Hong Kong, as some of the tensions between the world’s two largest economies were seen to be easing.

The upbeat tone from Asia, which included Taiwan Semiconductor Manufacturing Company
TSM,
+10.52%
jumping 7.7% on news Warren Buffett had bought a $5 billion stake, underpinned European bourses, which closed higher for a fourth session in a row.

Read also: Warren Buffett’s chip-stock purchase is a classic example of why you want to be ‘greedy only when others are fearful’

Analysts increasingly expect stocks to enjoy a positive end to the year. “The near-term picture still looks positive for U.S. benchmark indices and while momentum has reached intra-day overbought levels, this doesn’t imply a selloff has to happen right away,” said Mark Newton, head of technical strategy at Fundstrat.

Philadelphia Federal Reserve President Patrick Harker said Tuesday that he favored a 50 basis-point hike to the Fed’s benchmark rate in December. Atlanta Fed President Raphael Bostic said more rate hikes will be needed, even through there have been “glimmers of hope” on inflation.

Fed Vice Chairman for Supervision Michael Barr said Tuesday that the U.S. economy is likely to slow in coming months, and more workers will lose their jobs, in Senate testimony. The Fed is working with regulators to assess risks tied to cryptocurrency markets, following the collapse of FTX and its associated companies.

In other U.S. economic data, the New York Empire State manufacturing index for November showed a gauge of manufacturing activity in the state rose 13.6 points to 4.5 this month.

The yield on the 10-year Treasury note
TMUBMUSD10Y,
3.774%
was down 6.7 basis points at 3.798%. Bond yields move inversely to prices.

Companies in focus
- Walmart
  WMT,
  +6.54%
  shares jumped after the giant retailer swung to a net third-quarter loss, due to $3.3 billion in charges related to opioid legal settlements, but reported adjusted profit, revenue and same-store sales that were well above expectations and a full-year outlook that was above forecasts. Walmart shares opened Tuesday at $145.61 and closed at $147.48, or 6.57% higher.
- Home Depot
  HD,
  +1.63%
  rose after the home improvement retailer reported fiscal third-quarter earnings that beat expectations, citing strength in project-related categories, but kept its full-year outlook intact. Home Depot shares opened Tuesday at $304.06 and closed at $311.99.
- Chinese-listed technology traded sharply higher on Tuesday, including U.S.-traded ADRs for Alibaba Group Holding
  BABA,
  +11.17%,
  Baidu Inc.
  BIDU,
  +9.02%
  and JD.com Inc.
  JD,
  +7.14%
  The KraneShares CSI China Internet exchange-traded fund
  KWEB,
  +9.56%
  also traded substantially higher.
—Jamie Chisholm contributed reporting to this article
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November 15, 2022
Russell Wilson and Ciara’s House of LR&C opens on LI | Long Island Business News

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The House of LR&C, the retail apparel chain co-founded by NFL quarterback Russell Wilson and his singer-songwriter wife Ciara, has opened at Roosevelt Field in Garden City.

The new 1,500-square-foot store at Roosevelt Field is the brand’s first on Long Island and first on the East Coast. Once an online-only business, The House of LR&C, which stands for love, respect and care, now has other brick-and-mortar locations in the Seattle and Denver suburbs and Scottsdale, Ariz.

The company was founded in 2020 when Wilson and Ciara partnered with retail veteran Christine Day, a former CEO of Lululemon Athletica who previously served as an executive at Starbucks.

The House of LR&C offers a variety of proprietary clothing lines including Good Man Brand menswear, LITA by Ciara womenswear, Human Nation streetwear, and 3Brand childrenswear.

The chain also focuses on sustainability, using recycled cardboard hangers, secondhand store fixtures and furniture and compostable shopping bags.

The company contributes 3 percent of profits from in-store and online purchases to Wilson and Ciara’s Why Not You Foundation, a nonprofit dedicated to education, children’s health, fighting poverty and empowering youth.

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David Winzelberg

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November 15, 2022
Home Depot Earnings Top Estimates. Customers Are ‘Resilient,’ CFO Says.

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Home Depot

third-quarter earnings results beat expectations, giving the stock a boost on Tuesday.

The home-improvement retailer reported third-quarter earnings of $4.24 a share, topping analysts’ projections of $4.12 a share. Revenue came in at $38.9 billion, up 5.6% from a year earlier and topping estimates for $38 billion. Same-store sales rose 4.3%, ahead of estimates for 3.1%. U.S. same-store sales rose 4.5%.

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November 15, 2022
Home Depot Sales Up 5.6% in Third Quarter
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Business

Earnings

Home-improvement retailer logs sales increase even as it again records fewer transactions
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November 15, 2022
Alibaba, Tencent, lead Hong Kong tech stocks higher after upbeat China online retail sales data

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Shares of Chinese internet giants jumped in Hong Kong, after official data showed better-than-expected October retail sales in the world’s second-largest economy.

Alibaba Group Holding Ltd.
BABA,
+0.79%

9988,
+10.63%
jumped 9.8%, Kuaishou Technology
1024,
+10.71%
surged 8.7%, Tencent Holdings Ltd.
700,
+10.28%
rose 8.0% and Meituan
3690,
+5.88%
was up 5.8%. The Hang Seng Tech Index
HSXTCHINDXXX,
+7.08%
has gained as much as 7.7% and was last up 6.1%

The sector’s sharp upturn came after China’s National Bureau of Statistics said online retail sales of physical goods rose 7.2% in the first 10 months of the year. The number, closely watched by investors as an indicator of the country’s consumption trends, outpaced a 6.1% rise in the January-to-September period.

Jefferies analysts estimate that online retail sales grew more than 15% in October, accelerating from the three consecutive months of below-10% growth seen since July.

Write to Yifan Wang at yifan.wang@wsj.com

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November 14, 2022
Toronto’s New Adidas Store Is Setting The Stage For Experiential Retail In Canada

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The Toronto Lab product section of Adidas’ store in Toronto Eaton Centre.

Christine Do

Experiential retail is becoming ubiquitous across the United States, especially for athletic brands. In the last year, Champs Sports, Dick’s Sporting Goods, and Wilson’s have created experiential stores. But, Canada, as a much smaller market, tends to get left behind when it comes to new and trending retail.

Adidas aims to fill that void with its new 13,000-square-foot location at the Toronto Eaton Centre. Beyond the wide selection of Adidas lifestyle and sports products, it features a lounge, community activation space, a Toronto shop with unique products inspired by the city, and multiple digital touchpoints for customers to learn more about the brand and its connection to Toronto.

Canadians want to interact with and experience brands, not just transact with them.

According to the 2022 Ayden Retail Report by KPMG, 67% of Canadians prefer to shop in a physical store, compared to the global average of 59%. The report also outlined that those consumers think stores need to be exciting to visit and offer more than goods and services. Adidas’ new store aims to meet that demand. “We hope to see more of these types of stores start to open across Canada,” said Alim Dhanji, President of Adidas Canada, adding that “for Adidas, an experiential retail model provides consumers with the opportunity to freely explore our wide range of products in a way that isn’t offered solely online or in-store.”

The kids section of Adidas’ Toronto Eaton Centre store featuring an interactive digital display.

Christine Do

In addition to its in-store features, the store will host various events with musical performances and guest appearances and have pop-up events throughout the year. “In celebration of our store opening, we’ll be hosting a series of in-store workout classes led by Toronto-loved instructors, a shoe customization pop-up, and a World Cup activation ahead of the upcoming tournament this month,” shared Lesley Hawkins, VP of Retail at Adidas Canada. The company will communicate more details on these events over the coming weeks.

The demand appears to exceed the supply for experiential retail in Canada.

Product display in Adidas’ Toronto Eaton Centre store.

Christine Do

Toronto, specifically, is a unique market. Although the Greater Toronto Area has close to seven million people, there are only a few critical retail shopping areas, most of which house traditional retail store experiences. And any experiential concepts that do exist are primarily produced by Canadian brands. For instance, in 2019, Canada Goose launched a no-inventory experience in Sherway Gardens that included various cold rooms with fake snow to test the product in the applicable climate. Lululemon also has an interactive store on Queen Street West that consists of a coffee shop, a co-working space, and various fitness classes.

Beyond that, there’s Stackt Market, which like London’s Boxpark, is built out of 120 shipping containers on 100,000 square feet of land and is a mix of shops, food, and community events. It quickly became a hot spot for Torontonians seeking a new weekend hangout or shopping venture. The success of Stackt and the few branded experiential concepts indicate the Adidas store will likely do well in the market.

Art on display in Adidas’ store in Toronto Eaton Centre.

Christine Do

That said, contrary to other experiential concepts, Adidas has focused on designing and programming the store to the traits of the city. “Toronto is a multicultural hub filled with vibrancy across so many areas – arts, sports, fashion, design. Adidas has proudly been a part of the city for many years, building connections within its communities and working with local designers, artists, and athletes to collaborate on projects. We wanted the new space to feel even more personalized to the city and our pride being here,” shared Hawkins.

Although the brand hasn’t said where it would open stores next, it does plan to expand its physical footprint over the next four years. Canada has become a target market for many brands since the pandemic, with Reformation, Allbirds, and Alo Yoga all opening locations in the Toronto area over the last year. But the opportunity for experiential retail remains vast. So, perhaps Adidas’ new store will spark a wave of exciting and engaging retail concepts in the Canadian market.

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Brin Snelling, Contributor

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November 14, 2022
Consumer sentiment hits lowest level since June as fear of recession looms

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The numbers: Consumer sentiment soured in November, hitting its lowest level since July as Americans contended with continued inflation and a worsening economic outlook.

The University of Michigan’s gauge of the U.S. consumer’s outlook fell 5.2 index points from 59.9 in October.

Economists were expecting a reading of 59.5, according to a Wall Street Journal poll.

Inflation expectations for the next year rose to 5.1% from 5% in the prior month, while five-year inflation expectations rose to 3% from 2.9% in October.

Big picture: Inflation eased somewhat in October, but prices for a typical basket of consumer goods are still rising a historically rapid pace even as rising interests rates are weighing on many sectors of the economy.

Fears of a coming recession also weighed on Americans’ confidence about the economy.

“Declines in sentiment were observed across the distribution of age, education, income, geography, and political affiliation, showing that the recent improvements in sentiment were tentative,” wrote Joanne Hsu, director of the survey, in a statement. “Instability in sentiment is likely to continue, a reflection of uncertainty over both global factors and the eventual outcomes of the election.”

Key details: A gauge of consumer’s views of current conditions fell in November to 57.8 from 65.6 in October, while an indicator of expectations for the next six months fell to 52.7 from 56.2 last month.

Market reaction: U.S. stocks were trading mixed Friday morning, with the S&P 500
SPX,
+0.92%
posting gains and the Dow Jones Industrial Average
DJIA,
+0.10%
edging lower.

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November 11, 2022
WHO says 90% decline in COVID deaths since Feb. is ’cause for optimism,’ while urging vigilance against new variants

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The head of the World Health Organization said a close to 90% decline in COVID deaths globally compared to nine months ago is “cause for optimism,” but urged leaders to remain vigilant as new variants continue to emerge.

Tedros Adhanom Ghebreyesus told reporters on Wednesday that there were just 9,400 COVID deaths last week, compared with more than 75,000 in February, the Associated Press reported.

“Almost 10,000 deaths a week is 10,000 too many for a disease that can be prevented and treated,” he said.

Testing and sequencing rates remain low globally, vaccination gaps between rich and poor countries are still wide, and new variants continue to proliferate.

In its weekly epidemiological update, the agency said the global tally of cases fell 15% in the week through Nov. 6 from the previous week with over 2.1 million new cases counted.

The highest number of new cases was reported from Japan, at 401,693, followed by Korea at 299,440 and the U.S. at 266,104. The agency again cautioned that the numbers may be undercounted, given the changes in testing strategies and overall surveillance in many countries, including the U.S.

As for new variants, the update found BA.5, an omicron subvariant, remained dominant globally, accounting for 74.5% of sequences submitted to a central database. But newer ones, including BQ.1 and XBB, are on the rise.

BQ.1 sequences rose to 13.4% of the total from 9.4% a week ago. XBB rose to 2.0% from 1.1%. The WHO is still closely monitoring newer sublineages but called on countries to also track them closely.

In the U.S., known cases of COVID are climbing again for the first time in a few months. The daily average for new cases stood at 40,189 on Wednesday, according to a New York Times tracker, up 7% versus two weeks ago.

Cases are rising extremely sharply in some states, led by Nevada, where they are up 96% from two weeks ago. New Mexico’s case tally has climbed 64% from two weeks ago and Utah is up 61%. Overall, cases are rising in 32 states and are flat in Delaware. They are also rising in Washington, D.C., Guam, Puerto Rico and the U.S. Virgin Islands.

The daily average for hospitalizations was up 3% at 28,003, while the daily average for deaths is down 13% to 316.

Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

Other COVID-19 news you should know about:

• China’s new top leadership body reaffirmed Beijing’s “dynamic-zero” COVID-19 policy on Thursday, as case numbers rose and authorities in the city of Guangzhou urged residents to work from home but stopped short of a citywide lockdown, Reuters reported. In its first meeting since being formed last month after the ruling Communist Party’s twice-a-decade congress, the Politburo Standing Committee said China’s epidemic prevention measures must not be relaxed, according to state media.

• AstraZeneca PLC on Thursday lifted its guidance for the full year after reporting a swing to net profit and higher sales for the third quarter of the year, which both beat consensus expectations, Dow Jones Newswires reported. The Anglo-Swedish drug company dropped its submission for U.S. regulatory approval for its COVID vaccine, saying it has decided to focus instead on areas with greater unmet medical needs. The vaccine was initially approved in the U.K. and Europe about two years ago. CEO Pascal Soriot said the submission in the U.S. was becoming “very complicated and very large,” as it had to gather data from around the world.

• Pfizer
PFE,
+1.41%
and German partner BioNTech
BNTX,
-1.67%
said Thursday that their booster dose of the omicron BA.4/BA.5-adapted bivalent COVID vaccine for 5-to-11 year olds was recommended for marketing authorization in the European Union. The EU will review the recommendation from the European Medicines Agency (EMA) Committee for Medicinal Products for Human Use (CHMP), and is expected to make a decision “soon.” The companies’ bivalent booster is already authorized in the EU for people at least 12 years old.

Here’s what the numbers say:

The global tally of confirmed cases of COVID-19 topped 633.9 million on Monday, while the death toll rose above 6.60 million, according to data aggregated by Johns Hopkins University.

The U.S. leads the world with 97.9 million cases and 1,073,934 fatalities.

The Centers for Disease Control and Prevention’s tracker shows that 227.3 million people living in the U.S., equal to 68.5% of the total population, are fully vaccinated, meaning they have had their primary shots.

So far, just 26.3 million Americans have had the updated COVID booster that targets the original virus and the omicron variants, equal to 8.4% of the overall population.

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November 10, 2022
Kohl’s CEO Michelle Gass Resigns to Join Levi Strauss

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Kohl’s CEO Michelle Gass Resigns to Join Levi Strauss

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November 8, 2022
All eyes on China as Apple and Foxconn outline zero-COVID issues. Meanwhile, cases are rising again in the U.S.

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China’s strict zero-COVID policy was making headlines Monday after Apple and iPhone manufacturer Foxconn said over the weekend that restrictions are crimping production and will delay shipments of the high-end iPhone 14.

“We continue to see strong demand for iPhone 14 Pro and iPhone 14 Pro Max models,” Apple
AAPL,
-0.82%
announced in a Sunday evening press release. “However, we now expect lower iPhone 14 Pro and iPhone 14 Pro Max shipments than we previously anticipated and customers will experience longer wait times to receive their new products.”

Also read: Will Apple’s latest production issues destroy demand?

Foxconn, meanwhile, which trades as Hon Hai Precision Industry Co.
2317,
-0.50%,
lowered its fourth-quarter guidance and said anti-COVID measures were affecting some of its operations in Zhengzhou, China, as Dow Jones Newswires reported.

Foxconn said that the Henan provincial government had made it clear that it would fully support the company. Foxconn’s most advanced iPhone plant, located in the provincial capital of Zhengzhou, has been battling a COVID outbreak.

Foxconn said it is working with the government to halt the outbreak and resume production at full capacity as quickly as possible.

Workers at the world’s biggest assembly site for Apple’s iPhones walked out last week as Foxconn struggled to contain a COVID-19 outbreak. The chaos highlighted the tension between Beijing’s rigid pandemic controls and the need to keep production on track. Photo: Hangpai Xinyang/Associated Press

Investors have been closely watching China for signs that its government would start to lift the tough pandemic restrictions that have been in place for almost three years. The Wall Street Journal reported Monday that the country’s leaders are considering steps but have not yet set a timeline.

Chinese officials have become concerned about the costs of their zero-tolerance approach to COVID, which has resulted in lockdowns of cities and whole provinces, crushing business activity and confining hundreds of millions of people to their homes for weeks and sometimes months on end.

But they are weighing those concerns against the potential costs of reopening on public health and on support for the Communist Party. On Saturday, officials from China’s National Health Commission again reaffirmed their commitment to a firm zero-COVID strategy, which they described as essential to “protect people’s lives.”

Still, there are plans in Beijing to further cut the number of days incoming travelers must quarantine in hotels from 10 to seven, followed by three days of home monitoring, the paper reported, citing people involved in the discussions.

And officials have told retail businesses that they intend to reduce the frequency of PCR testing as soon as this month, partly because of the cost.

In the U.S., known cases of COVID and hospitalizations are climbing again for the first time in a few months.

The daily average for new cases stood at 39,954 on Sunday, according to a New York Times tracker, up 6% compared with two weeks ago. But cases are sharply higher in several states, led by Nevada, where they are up 96% from two weeks ago, followed by Tennessee, where they are up 69%; Louisiana, where they are up 68%; Utah, where they have climbed 61%; and New Mexico, where they are up 56%.

Cases are climbing in 30 states and in Washington, D.C.

The daily average for hospitalizations was up 2% to 27,419, while the daily average for deaths was down 11% to 320.

Physicians are reporting high numbers of respiratory illnesses like RSV and the flu earlier than the typical winter peak. WSJ’s Brianna Abbott explains what the early surge means for the winter months. Photo illustration: Kaitlyn Wang

The Centers for Disease Control and Prevention said the BQ.1 and BQ.1.1 variants accounted for 35.3% of new cases in the week through Nov. 5, up from 27.1% a week ago.

The two variants accounted for 52.3% of all cases in the New York region, which includes New Jersey, Puerto Rico and the Virgin Islands, up from 42.5% the previous week. That was more than the BA.5 omicron subvariant, which accounted for 24.9% of new cases in the New York area in the latest week.

The BA.5 omicron subvariant accounted for 39.2% of all U.S. cases, the data show.

BQ.1 and BQ.1.1 were still lumped in with BA.5 variant data as recently as three weeks ago, because at that time, their numbers were too small to break out. BQ.1 was first identified by researchers in early September and has been found in the U.K. and Germany, among other places.

Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

Other COVID-19 news you should know about:

• BioNTEch SE
BNTX,
+2.84%,
the German biotech that has partnered with Pfizer
PFE,
-0.53%
on a COVID vaccine, posted earnings early Monday, showing a roughly 50% drop in profit that sent its stock lower, despite beating consensus estimates. The Mainz-based company said it had invoiced about 300 million doses of its bivalent vaccine, which targets the omicron variant as well as the original virus. The company chalked up €564.5 million ($563.9 million) in direct COVID vaccine sales in the quarter, down from €1.351 billion a year ago. BioNTech raised the lower end of its full-year COVID vaccine revenue range to €16 billion to €17 billion, from a previous €13 billion to €17 billion.

• Thousands of runners took to the streets of the Chinese capital on Sunday for the return of Beijing’s annual marathon after a two-year hiatus, the Associated Press reported. However, the good news was offset by anger about another death related to COVID restrictions, this time of a 55-year-old woman in a sealed building. An investigation report released Sunday in Hohhot, the capital of China’s Inner Mongolia region, blamed property management and community staff for not acting quickly enough to prevent the death of the woman after being told she had suicidal tendencies.

• The U.S. flu season is off to an unusually fast start, contributing to an autumn mix of viruses that have patients filling hospitals’ and physicians’ waiting rooms, the AP reported separately. Reports of flu are already high in 17 states, and the hospitalization rate hasn’t been this high this early since the 2009 swine flu pandemic, according to the Centers for Disease Control and Prevention. So far, there have been an estimated 730 flu deaths, including at least two children. The winter flu season usually ramps up in December or January.

Here’s what the numbers say:

The global tally of confirmed cases of COVID-19 topped 632.6 million on Monday, while the death toll rose above 6.60 million, according to data aggregated by Johns Hopkins University.

The U.S. leads the world with 97.7 million cases and 1,072,598 fatalities.

The Centers for Disease Control and Prevention’s tracker shows that 227.3 million people living in the U.S., equal to 68.5% of the total population, are fully vaccinated, meaning they have had their primary shots.

So far, just 26.3 million Americans have had the updated COVID booster that targets the original virus and the omicron variants, equal to 8.4% of the overall population.

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November 7, 2022
Singles’ Day 2022: What’s Different?

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Singles’ Day is the largest shopping day in the world, but will it be a success this year with China facing many challenges?

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Frank Lavin, Contributor

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November 7, 2022
Pfizer-BioNTech bivalent booster shows higher immune response, but new COVID cases climb back above 40,000 a day

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First the good news: Pfizer Inc. and Germany-based partner BioNTech SE said updated trial data for their omicron BA.4/BA.5-adapted bivalent booster showed a “substantially higher” immune response in adults than the original COVID-19 vaccine.

The companies said the Phase 2/3 clinical-trial data, collected one month after the boosters were given, also demonstrated that safety and tolerability profiles were similar to those of the original vaccine.

The news sent Pfizer’s stock
PFE,
+0.51%
rallying 1.7% and BioNTech’s U.S.-listed shares
BNTX,
+4.97%

22UA,
+4.11%
surging 7.2% in morning trading.

“As we head into the holiday season, we hope these updated data will encourage people to seek out a COVID-19 bivalent booster as soon as they are eligible in order to maintain high levels of protection against the widely circulating Omicron BA.4 and BA.5 sublineages,” said Pfizer Chief Executive Albert Bourla.

Only 8.4% of eligible Americans have received updated COVID booster shots, while 68.5% of the total population have completed the original primary series of vaccinations, according to the latest data from the Centers for Disease Control and Prevention.

The bivalent booster has been authorized for emergency use in the U.S. by the Food and Drug Administration for people age 5 and older and has also been granted marketing authorization in the European Union for those age 12 and older.

In another piece of good news, Pfizer and BioNTech shares were also lifted by a report in The Wall Street Journal that the Chinese government has agreed to approve the companies’ COVID-19 vaccines for foreign residents in China and has also held talks to approve those vaccines for the broader population.

Meanwhile, Bloomberg reported that China was working on a plan to end the practice of penalizing airlines that bring COVID-infected people into the country.

Both reports boost hopes that China is slowly moving toward ending its zero-COVID policy, which has crimped China’s economy and acted as a drag on global growth.

Now for the bad news.

The seven-day average of new COVID cases topped 40,000 for the first time in a month and hospitalizations have also ticked higher, with more than half of U.S. states showing increases over the past two weeks.

According to a New York Times tracker, the daily average of new cases rose to 40,101 on Thursday from 38,208 on Wednesday, and was up 6% from 14 days ago.

The New York Times

Nevada has seen a 96% jump in daily cases, followed by Tennessee with a 69% increase and Louisiana with a 68% rise, leading the 28 states that saw cases increase over the past two weeks.

Still, daily cases were less than one-third of the summer high of more than 130,000 reached during the surge of the BA.5 variant, the data show.

Coronavirus Update: MarketWatch’s daily roundup has been curating and reporting all the latest developments every weekday since the coronavirus pandemic began

The daily average of COVID-related hospitalizations rose 2% to 27,252, while the number of people with COVID in intensive-care units (ICUs) fell 2% to 3,110.

The daily average of COVID-related deaths fell 6% to a four-month low of 339.

On a global basis, the total number of COVID cases has increased to 631.91 million, while deaths have reached 6,598,197, according to data provided by Johns Hopkins University. The U.S. has seen a total of 97.69 million cases and 1,072,245 deaths.

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November 4, 2022
Starbucks says higher prices, customizable beverages will carry it through potential economic winter

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Ever since Starbucks Corp. rolled out longer-term financial targets in September, Wall Street has wondered how the coffee chain might meet what analysts say were ambitious goals, as rising prices drain consumer spending. For at least the year ahead, executives on Thursday called out three ways to get there: higher prices, younger customers and cold, customizable beverages.

For the fiscal year ahead, executives for the coffee chain on Thursday said they expected global same-store sales to be “near the high end” of its long-term target of between 7% to 9% growth. FactSet expects growth of 8.6%.

When an analyst asked what gave management confidence in that target, interim Chief Executive Howard Schultz said that its coffee was an “affordable luxury,” and that it was armed with a loyalty program that it didn’t have in years past. And they said its customers were getting younger, not older.

“Not only has it gotten younger, but that young, Gen Z customer tends to have significantly more discretionary money at their disposal,” he said. “And their loyalty to Starbucks has been quite significant and predicted.”

He said Starbucks
SBUX,
+0.12%
had raised prices by nearly 6% over the past 12 months and hadn’t seen demand subside. And he said cold coffee beverages made up 76% percent of total drink sales in its U.S. company-owned stores. In the fourth quarter, more than half of beverages overall in those stores were customized, leading to $1 billion in sales a year for add-on syrups, foams and other ingredients.

“I think customization, which we spoke a lot about in our prepared remarks, is obviously giving us the ticket is becoming more accretive,” he said.

Management said they expect U.S. same-store sales growth of 7% to 9% for the year ahead. For China, they’re banking on “outsize” growth for the metric — interrupted by a decrease in the first-quarter — as the nation potentially emerges from pandemic-related lockdowns.

For overall revenue, they expect gains of between 10% and 12%. Management also said they would resume their buyback program in fiscal 2023.

Even as the Federal Reserve tries to chart a path to lower prices, Starbucks is the latest company to say it still has “pricing power,” or the ability to charge customers more. Snack maker Mondelez International
MDLZ,
-0.93%,
earlier in the week, said it planned to raise prices through next year. Similarly, its own chief executive also described its snacks as an “affordable indulgence.”

Prior to the call, Starbucks reported fiscal fourth-quarter results that beat expectations, helped by a boost in U.S. sales and higher prices.

The coffee chain reported net income of $878 million, or 76 cents a share, compared with $1.76 billion, or $1.49 a share, in the same quarter last year. Revenue rose 3% to $8.4 billion, compared with $8.15 billion in the prior-year quarter.

Same-store sales rose 7% worldwide, helped largely by bigger ticket sizes, even as actual transaction volume remained muted. They were up 11% in the U.S. But international same-store sales fell 5%, with a 16% drop in China.

Excluding restructuring, impairment and other costs, Starbucks earned 81 cents per share, compared with 99 cents a year earlier. U.S. members of its loyalty program who were active for three months rose 16% to 28.7 million.

Analysts polled by FactSet expected Starbucks to report adjusted earnings per share of 72 cents, on revenue of $8.323 billion. Same-store sales were expected to rise 4.2%.

Shares rose 2.4% after hours.

As with other restaurants and retailers, Starbucks’ sales this year have been helped by price increases. Analysts have also said higher-income consumers, who might not mind higher prices as much, as well as demand for cold beverages, have propelled demand. While China’s COVID-19 restrictions have weighed on sales, analysts say demand trends are strong elsewhere.

“The U.S. business is humming, and the China risk is increasingly understood,” Wedbush analyst Nick Setyan wrote in a research note ahead of Starbucks’ earnings.

The earnings report comes as Starbucks battles a nascent unionization push at some of its stores. Some bargaining efforts between the company and the union members have stalled, amid allegations from both of bad-faith negotiations. The company over the past year has spent more to raise employee pay and rolled out other incentives at non-union stores.

Starbucks stock has tumbled 27% so far this year. The S&P 500 Index
SPX,
-1.06%,
by comparison, is down around 22%.

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November 3, 2022