Raphael Stevens

Gap fell short of Wall Street’s expectations on the top and bottom line.
The retailer, which includes its namesake brand, Banana Republic, Old Navy and Athleta, announced a series of executive changes.
The company cleared out some of its inflated inventories, which are down 21% year-over-year.

People walk by the Gap retail store in Century City on September 20, 2022 in Los Angeles, California.
Allison Dinner | Getty Images

Gap reported disappointing holiday-quarter results Thursday and announced a series of executive changes as the struggling retailer continues to search for a permanent CEO.
Shares of the company fell in off-hours trading.

Here’s how the company did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

Loss per share: 75 cents, vs. 46 cents expected
Revenue: $4.24 billion vs. $4.36 billion expected

The company reported net losses of $273 million, or 75 cents a share, for the three months that ended Jan. 28, compared with a loss of $16 million, or 4 cents per share, a year earlier.
Gap reported sales of $4.24 billion, down 6% from $4.53 billion a year earlier. Comparable sales were down 5% year-over-year and store sales dropped 3%. Online sales, which represent 41% of total net sales, plummeted 10% compared to last year, the company said.
The apparel retailer — which includes its namesake brand, Old Navy, Banana Republic and Athleta — has had a rough year as it grappled with numerous net losses, bloated inventory levels and a search for a permanent CEO. During an earnings call with investors, Gap interim CEO Bob Martin said the board has narrowed its search and the next chief executive will be an external candidate.
As the company has struggled to get back to profitability, it announced it is eliminating its chief growth officer role, which has been held by Asheesh Saksena, effective Thursday. Athleta’s CEO, Mary Beth Laughton, also left the company Thursday.

“We believe Athleta has incredible potential, but it has suffered from product acceptance challengesover the past several quarters,” Martin said in a release. “As we look to capitalize on this potential and remain competitive amidst a dynamic landscape, we believe now is the right time to bring in a new leader who can position Athleta for long-term success.”
Chief People Officer Sheila Peters is also leaving, albeit at the end of the year.
Gap issued a muted outlook for fiscal 2023. It plans to close 50 to 55 Gap and Banana Republic stores and open 30 to 35 Athleta and Old Navy stores. It also expects first quarter net sales to decrease in the mid-single digit range compared to the prior fiscal year and expects fiscal 2023 net sales to decrease in the low to mid-single digit range. It does, however, expect gross margins to expand in the first quarter and during the year.
The outlook was based on “the continued uncertain consumer and macro environment,” the company said.
This time last year, Gap struggled to get products on the shelves amid worldwide supply chain constraints and ended up flying in apparel to keep up with demand. Still, backlogs and delays kept inventories in transit so by the time it finally arrived, it was out of season or out of style, forcing the company to offer steep discounts, which has cut into profits.
In a bright spot for Gap on Thursday, though, the company reported that inventory declined 21% year-over-year.
Overall, net sales for the year dropped to $15.62 billion compared to $16.67 billion in the prior fiscal year. Net losses for the year came in at $202 million, compared to a net income of $256 million in the prior fiscal year.
Here’s how each brand fared in the quarter:

Old Navy, which accounts for the majority of Gap’s revenue, posted $2.2 billion in sales, down 6% versus a year earlier. The retailer saw a pullback from lower-income consumers amid high inflation and softness in kids and baby categories, which was partially offset by strength in women’s wear. 

Gap’s sales were down 9% year-over-year at $1.1 billion. Comparable sales in North America were down 5%. Similar to Old Navy, the brand saw softness in the kids and baby category, which was offset by strength in the women’s category. 

Banana Republic posted $578 million in sales, a 6% drop compared to last year. The drop was driven by a pullback in outerwear and sweaters along with its holiday gifting assortment. Dresses and suiting drove comparable growth as consumers continue to venture back into the world and refresh their wardrobes for going out and heading to work. 

Athleta, the athleisure unit that was a big pandemic winner, saw a 1% drop in sales to $436 million. Comparable sales were down 5% because of what the company called “continued product acceptance challenges” – or issues consumers have with the brand’s assortment.

Gap had originally forecast adjusted per share earnings of $1.85 to $2.05, with sales growing at a low single digit percentage rate for the fiscal year. It slashed that guidance and then withdrew it altogether halfway through the year amid plunging sales.
The company said it withdrew the outlook because of the uncertain macroeconomic environment and its ongoing efforts to make changes and find a new CEO.
In July, Sonia Syngal abruptly stepped down as chief executive. The company has yet to find a permanent replacement. Martin, the retailer’s executive chairman, has been serving as interim CEO in the meantime.
In the previous quarter, Gap sustained $53 million in impairment charges after Ye, the rapper formerly known as Kanye West, terminated his contract with the retailer citing apparent contract breaches and a lack of creative control. In late October, Gap removed all Yeezy products from its stores after Ye made anti-Semitic remarks.
Read the full earnings release here.

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Ulta Beauty topped Wall Street’s expectations for its fourth-quarter earnings and revenue.
The company expects further revenue and earnings growth in 2023, concentrated mostly in the first half of the year.
Ulta sales have benefited from the overall resilience of the beauty category as shoppers continue to budget for affordable luxuries like makeup and wellness products.

Kylie cosmetics display at an ULTA store in New York.
Scott Mlyn | CNBC

Ulta Beauty topped Wall Street’s expectations for its holiday-quarter earnings and revenue, as shoppers continued to save room in their tighter budgets for beauty products during the celebration season.
The holiday season meant more people were buying beauty products to prepare for parties and to use as gifts. “We describe it as ‘gifting and glamming,'” CEO Dave Kimbell told CNBC.

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The affordable luxuries of the beauty sector have made it a mainstay spending category, even as inflation shrinks consumer wallets and makes necessities like groceries more expensive. Kimbell said that consumer spending across income levels remained strong in the fourth quarter and that customers are not trading down to cheaper options, despite higher prices on the company’s products.
Same-store sales grew 15.6% in the fourth quarter, slower growth than the 21.4% jump it posted in the same quarter the previous year, but well above analysts’ estimates of 8.4%, according to StreetAccount.
Kimbell said that makeup, haircare, skincare and fragrance products all saw double-digit sales growth in the fourth quarter. He added that the wellness segment, which includes items like nutritional supplements and silk pillowcases, is also growing after the pandemic put a renewed emphasis on self care.
As a percentage of net sales, gross profit stayed flat compared to the year-ago quarter in part due to higher inventory shrink. Kimbell cited organized retail crime as the primary reason for shrink, which he said is a “retail-wide challenge.”
Here’s how the company did in the fourth quarter, ended Jan. 28, compared with Refinitiv consensus estimates:

Earnings per share: $6.68 vs. $5.68 estimated
Revenue: $3.23 billion vs. $3.03 billion estimated

Net income rose 17.8% year over year to $340.8 million, or $6.68 per share, from $289.4 million, or $5.41 per share, in the fourth quarter of 2021.
Looking ahead, the company is expecting full-year revenue for 2023 to be between $10.95 billion and $11.05 billion along with earnings per share of between $24.70 and $25.40. Wall Street was anticipating 2023 revenue of $10.74 billion and earnings per share of $24.25, according to Refinitiv.
Ulta expects the majority of that growth to come during the first half of 2023 and level off in the back half. Kimbell said though higher prices won’t necessarily come down, the company is planning to decelerate the level of its price hikes.
The company is also working on expanding its footprint. It opened 12 new stores in the fourth quarter and is shooting for between 25 and 30 new locations in 2023. The ultimate goal is to open roughly 100 new stores in the next two years, Kimbell told CNBC.
Ulta is also looking to keep building on its partnership with Target. Ulta shop-in-shops are currently in 350 Target locations nationwide, and Kimbell said the company is on track to be in up to 450 more over time.
Along with brick-and-mortar, the makeup seller wants to strengthen its digital footprint. Kimbell said the company is in the final stages of its “digital store of the future,” an effort to revamp its e-commerce platforms.
As of Thursday’s market close, Ulta shares are up about 11% this year, outpacing the S&P 500, which is up about 2% year to date.

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The American Airlines pilots union plans to vote in April on whether to allow members to call a strike.
The notice comes two days after American Airlines CEO Robert Isom said the carrier is prepared to raise pilot pay to match compensation at rival Delta Air Lines.
Even if the pilots union called a strike it would not be immediate.

Pilots talk as they look at the tail of an American Airlines aircraft.
Mike Stone | Reuters

The American Airlines pilots union, the Allied Pilots Association, plans to vote in April on whether to allow members to call a strike as talks for a new labor contract continue.
The vote notice comes two days after American Airlines CEO Robert Isom said the carrier is prepared to raise pilot pay to match compensation at rival Delta Air Lines, whose pilots approved their new contract March 1.

“While our Negotiating Committee reports good progress, we remain steadfast and focused that now is the time to reach an agreement with American Airlines,” the APA said Thursday. “APA must also ensure it utilizes all its legal processes for contract resolution and improvement.”
Delta’s pilots are getting 34% raises in the new four-year deal, alongside other improvements. They had approved a strike authorization vote in the fall, about a month before reaching a preliminary deal with the company.
Even if the APA called a strike it would not be immediate. Airline strikes are extremely rare in the U.S. and would follow a lengthy process involving federal mediators.
“We look forward to reaching an agreement with APA quickly so that American’s pilots can benefit from meaningful enhancements to their pay and quality of life,” the airline said in a statement.

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President Joe Biden is seeking to increase the budget for the National Aeronautics and Space Administration to $27.2 billion next year, an increase of 7%.
In addition to $8.1 billion for NASA’s lunar Artemis program, the Biden administration aims to allocate $949 million for a mission to return Mars rock and soil samples.
The request also adds $180 million so NASA can begin development of a “space tug” to help deorbit the International Space Station when it is expected to retire in 2030.

Vice President Kamala Harris meets with NASA astronauts Shannon Walker and Joe Acaba at Kennedy Space Center in Florida during a tour on Aug. 29, 2022.
Bill Ingalls / NASA

President Joe Biden is seeking to increase the budget for the National Aeronautics and Space Administration to $27.2 billion next year, according to a proposed 2024 budget released Thursday.
The request represents a 7% increase from NASA’s budget in fiscal year 2023, with more funds allocated for the space agency’s Artemis lunar program.

In addition to $8.1 billion for Artemis, $500 million above the prior year, the Biden administration aims to earmark $949 million for a mission to return Mars rock and soil samples.

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The request also adds $180 million so NASA can begin development of a “space tug” to help deorbit the International Space Station when it is expected to retire in 2030, as well as $39 million to study the risk associated with debris in orbit around the Earth.
The White House request does not represent what NASA’s budget will be in 2024, as Congress often adjusts budget amounts during the approval process.

Read more on Biden’s fiscal year 2024 budget plan:

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Disney CEO Bob Iger wants Marvel Studios to focus on new characters.
“Do you need a third and a fourth for instance? Or is it time to turn to other characters?” Iger said.
His comments come on the heels of the disappointing box office performance of “Ant-Man and the Wasp in Quantumania.”

Cassie Lang (Kathryn Newton) and Scott Lang (Paul Rudd) in “Ant-Man and the Wasp in Quantumania.”

After a fourth Thor movie and a third standalone Ant-Man film, even Disney CEO Bob Iger wants something new out Marvel.
“Sequels typically worked well for us,” Iger said during the Morgan Stanley Technology, Media and Telecom Conference on Thursday. “Do you need a third and a fourth for instance? Or is it time to turn to other characters?”

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His comments come on the heels of the disappointing box office performance of “Ant-Man and the Wasp in Quantumania.” As of Sunday, the film, which has been in theaters for three weeks, has tallied just $420 million globally.
Domestically, the movie has floundered with $187 million in total ticket sales after premiering with a $104 million opening weekend. While that outpaces the total gross of the first Ant-Man’s domestic box office in 2015, it’s a sharp fall from pre-pandemic averages. Especially, considering the film features the Marvel Cinematic Universe’s next big villain, Kang.
“There’s nothing in any way inherently off in terms of the Marvel brand,” Iger said. “I think we just have to look at what characters and stories we’re mining, and you look at the trajectory of Marvel over the next five years, you’ll see a lot of newness. We’re going to turn back to the Avengers franchise, but with a whole different set of Avengers.”
Iger’s remarks come as he orchestrates a broad restructuring of the company, with an eye on slashing $5.5 billion in costs – with $3 billion of that coming from content.
Disney has been releasing new content from the MCU at a somewhat frenetic pace over the past few years. The company has used streaming service Disney+ as a vehicle to introduce new characters — Moon Knight, Ms. Marvel, She-Hulk — as well as to more deeply explore legacy characters (Loki, Falcon, the Winter Soldier) between theatrical releases.

As the MCU grows, some have rallied behind the franchise, excited for new entrants and content. Others have found the required viewing of additional series to be arduous and wonder if Disney should slow down its rate of releases.
The company’s breakneck pace of content distribution has also put a lot of pressure on visual effects groups tasked with turning green screen action sequences into a feast for the eyes. The increased output from the studio has exacerbated production woes these third parties faced in the wake of shutdowns due to the pandemic. The result has been some criticism about underwhelming superpower effects or slapdash CGI backgrounds that appear muddled.
Marvel has begun spreading out its releases. After “Quantumania” in February, the studio will release “Guardians of the Galaxy Vol. 3” in May and has postponed “The Marvels,” previously set for July, until November.
Additionally, the amount of time between Disney+ Marvel series has grown. A new Marvel series has not debuted since the final episodes of “She-Hulk” launched in early October. “Secret Invasion” and season 2 of “Loki” are next on the list, but Disney has not provided release dates for either as of yet.
“There are a lot more stories to tell,” Iger said Thursday.

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This $22.5 million condo in Miami spans 6,200 square feet with four bedrooms and five and a half baths.
The luxury condo is situated on the 48th floor of the Turnberry Ocean Club Residences in Sunny Isles Beach, Florida.
The touted amenities span over 70,000 square feet and 300 acres and include everything from a giant waterpark to a $1.2 million beachfront cabana.

This $22.5 million condo in Miami spans 6,200 square feet with four bedrooms and five and a half baths. But perhaps more impressive than what comes inside those four walls is the mind-blowing list of over-the-top amenities that comes with it.
The luxury condo is situated on the 48th floor of the Turnberry Ocean Club Residences in Sunny Isles Beach, Florida, where the touted amenities span over 70,000 square feet and 300 acres and include everything from a giant waterpark to a $1.2 million beachfront cabana.

The primary suite and balcony with views of the Atlantic.
Turnberry Ocean Club Residences / Leo Diaz

The building’s prime location, sandwiched between the Atlantic Ocean and the Intracoastal Waterway, means flow-through apartments that extend the entire length of the building — like unit 4803, currently up for sale — deliver two different waterfront views and command a premium for buyers who will pay more to see the sun rise over one shoreline and set over another.
The condo’s impressive amenities helped it break a record in October when a $23 million duplex on the 50th floor sold for over $3,850 per square foot, the highest price-per-square-foot ever achieved for a condo in Sunny Isles Beach according to South Florida real estate broker Senada Adzem, who recently took CNBC on a tour of the building and the $22.5 million residence up for grabs.
“Sunny Isles Beach is the epicenter of ultra luxury branded developments, and with all the competition they have to differentiate with extraordinary amenities and unique brands to command a premium,” said Adzem. 

Dramatic ocean views from the residence’s east-facing balcony.
Turnberry Ocean Club Residences / Leo Diaz

It will take some time to unpack all the extras offered to residents at 18501 Collins Avenue, as they span six amenity-devoted levels inside the building and spill over to the 300-acre Turnberry Isle Country Club.
Residents get a social membership program at the club, which is about one mile away and includes two 16-hole world-class golf courses and a giant waterpark. The condo’s mega-amenity package also extends over to Fontainebleau Aviation, a private corporate jet center at the nearby Miami-Opa locka Executive Airport, where Turnberry residents receive so-called “VIP privileges.” And for the yachting crowd, there’s access to the Turnberry Marina which can dock yachts up to 180 feet long according to the residences’ website.

“Turnberry Ocean Club carries with it a discernible cachet,” said Adzem, “There’s an ‘it’ factor in play, and people want to be part of it.”
The building’s three-story Sky Club starts on the 30th floor and spans approximately 40,000 square feet. The building’s sales executive Sabine Otamendi told CNBC the Sky Club cost $100 million to construct and no part of the building is open to the public.

A view of the building’s Sky Club which spans three levels from the 30th to 32nd floor and includes two cantilevered pools one for sunrise the other for sunset.
Turnberry Ocean Club Residences

On the 30th level there are two cantilevered pools — one for sunrise and another for sunset — plus a juice and smoothie bar and outdoor living rooms with televisions.

An aerial view of the sunrise pool on the 30th floor, which cantilevers 333 feet above sea level.
DroneHub Media

The 31st floor is entirely dedicated to wellness, with a full-service spa in the sky, plus indoor and outdoor fitness areas, men’s and women’s locker rooms, and steam showers and sauna.

The Sky Club’s full service spa.
Turnberry Ocean Club Residences

Inside the Sky Club’s fitness center where the treadmills come with impressive views.
Turnberry Ocean Club Residences

On the 32nd floor there’s a sunset lounge with a wine vault, lounge areas, an indoor dining space and full catering kitchen.

The Sky Club’s wine vault and lounge.
Turnberry Ocean Club Residences

Outdoor sunset lounge
Turnberry Ocean Club Residences

Also up on 32nd floor is a so-called dog retreat where lucky pooches can take in the ocean views and relieve themselves. There’s another pet area on the ground level as well.

Outdoor pet retreat and dog walking area.
Turnberry Ocean Club Residences

The amenity list keeps growing on floors one, two and three, where you’ll find another pool and 31 ocean-view cabanas.

The view from the ocean front infinity pool.
Turnberry Ocean Club Residences

There’s a poolside outdoor restaurant that serves breakfast and lunch, along with a fine-dining restaurant and piano bar on floor three. That level also houses a screening room and two hotel suites for residents’ guests. Off the lobby there’s a coffee lounge called Drip where a barista serves complimentary coffee and continental breakfast seven days a week.

A barista staffs the building’s ground-level coffee lounge where residents are offered free coffee and continental breakfast.
Turnberry Ocean Club Residences

The beachfront neighborhood only spans about 1.8 square miles — for that size there’s a remarkable 16 high-end condominium residences vying for buyers with units priced north of $10 million. 
“Branded projects are all the rage now, with renowned architects, designers, spas and beach clubs coupled with ultra luxury amenities and services,” said Adzem.
Among the higher-end branded condos in Sunny Isles Beach is the Porsche Design Tower, which stands next door to the Turnberry Ocean Club, the Bentley Residences, the Residences by Armani Casa, The Estates at Aqualina, Jade Signature, and the Ritz-Carlton Residences.

Aerial view of the Porsche Design Tower in Sunny Isles Beach. 

Here are just some of the stand-out amenities being used to lure in wealthy buyers in some of those buildings:
At the Porsche Design Tower, in-unit parking is accessed by car elevator, aka the Dezervator, named after the building’s developer Gil Dezer. The futuristic amenity whisks residents and their wheels up to their apartment so they can park steps away from the living room.   

The “Dezervators” whisk Porsches up to their units.
Source: Dezer Development

Dezer has planned a similar automobile elevator for his yet-to-be-built, 63-story Bentley Residences where each home will have multi-unit in-sky parking as well as its own pool.
The project is being marketed as the tallest beachfront residential tower in America. Among the planned amenities is a fine-dining restaurant, whiskey bar, spa, gym and landscaped gardens.  

A rendering of the automobile elevator planned at the Bentley Residences.
Bentley Residences

“With every new project, we are always trying to outdo ourselves, so the amenities we imagine have progressively gotten more over-the-top” Gil Dezer told CNBC.

A rendering of the automobile elevator planned at the Bentley Residences.
Bentley Residences

The Residences by Armani Casa, which Dezer is also developing alongside Related Group, will deliver 35,000 square feet of amenities including an Armani gym, a two-story spa and interiors designed under the artistic direction of Giorgio Armani with Casa Armani furnishings according to the website.

Rendering of the Residences by Armani Casa

“The skyline of Sunny Isles Beach features some of the most exciting towers in all of Miami, and it has become a destination where developers can experiment with architecture, branded concepts and amenities,” said Dezer.

The Lagerfeld-designed lobby at the Estates at Aqualina.

The Estates at Aqualina, developed by The Trump Group (no relation to the former president) includes a lobby designed by the late fashion designer Karl Lagerfeld plus “45,000 square feet of awesome,” according to the residence’s website.

Marketing image of the FlowRider wave simulator.
Estates at Aqualina

Amenities here range from an ice skating rink to a Formula One race simulator plus a so-called Wall Street Trader’s Club room and a FlowRider surfing simulator — in essence, a wave machine that creates swells for building residents to surf on.

An image depicitng Aqualina’s so-called Wall Street Trader’s room.
Estates at Aqualina

A marketing image of Aqualina’s ice skating rink
Estates at Aqualina

But if they’d rather catch a ride on four wheels, residents can hop in the building’s house-car, which is a bright red Rolls Royce.

Marketing photo of condominium’s red Rolls Royce house-car
Estates at Aqualina

“Sunny Isles Beach sometimes feels like Dubai meets Vegas on the ocean — in only the best ways,”  Adzem told CNBC.
According to public records, the neighborhood’s top recent sales included a $27 million deal at the Estates at Aqualina in 2021, which combined two penthouse units at just over $3,100 a square foot, and a $23.5 million penthouse that traded last year at Jade Signature for about $1,840 a square foot. 
The three most expensive listings currently on the market are all also at the Estates at Aqualina: the highest priced is an $85 million residence that spans 15,000 square feet across four stories and delivers seven bedrooms and nine and half baths, according to the Multiple Listing Service.

The pool and cabanas at Aqualina.
The Estates at Aqualina

For comparison the average sale price of a luxury condo, representing the top 10% of sales, in Miami Beach was just under $5.4 million, with an average price per square foot of just over $1,960, according to the Q4 2022 Elliman Report.
Here’s a closer look around the $22.5 million residence for sale and some more of the amenities offered at the record breaking Turnberry Ocean Club Residences:

The grand lobby with views across the pool and ocean.
Turnberry Ocean Club Residences

At the center of the residence is a formal dining area with four floor-to-ceiling louvered wood panels that can pivot to open or separate the space from the grand salon. The unit is being sold turn-key, including all furnishings, artwork and even the bed sheets, according to Adzem who said, “just bring your sunglasses.”

The residence’s formal dining area.
Turnberry Ocean Club Residences / Leo Diaz

The kitchen includes three islands and comes equipped with custom Italian-made cabinetry and high-end German appliances.

The kitchen is equipped with three islands and Italian-made cabinetry.
Turnberry Ocean Club Residences / Leo Diaz

Off the kitchen a family room overlooks the Intracoastal Waterway, with floor-to-ceiling window panels that slide open to one of the units two balconies.

The family room and adjacent balcony that overloooks the Intracoastal Waterway.
Turnberry Ocean Club Residences / Leo Diaz

The primary bath features walls and floors clad in white marble with a steam shower that connects his and her baths.

The marble-clad primary bath and steam shower.
Turnberry Ocean Club Residences / Leo Diaz

The walk-in closet in the primary bedroom is made by Brazilian design brand Onare and mixes glass, leather and mirrors that appear slightly smoked. The building’s sales executive Otamendi told CNBC the total cost of custom closets through out the entire apartment came to over $350,000.

The primary bedroom’s walk-in closet.
Turnberry Ocean Club Residences / Leo Diaz

Unit 4803 is being offered with a 250-square-foot oceanfront cabana, which is usually priced at about $1.2 million, according to Otamendi.

A rendering of one of the Turnberry Ocean Club Residences’ beach front cabanas. The 250 sq ft structure is priced at $1.2 million.
Turnberry Ocean Club Residences

Adzem told CNBC if the unit sells for its current asking price, real estate taxes plus condo association dues would total more than $500,000 per year.

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