Raphael Stevens

Chipotle reported weaker-than-expected sales for its second quarter, although higher prices drove strong profit growth.
Facing higher food, packaging and labor costs, Chipotle also said it would hike prices again in August.
“Fortunately for Chipotle, you know, the majority of our customers are a higher household income consumer,” CEO Brian Niccol said on the company’s earnings call.

People visit a Chipotle restaurant on February 09, 2022 in Miami, Florida.
Joe Raedle | Getty Images

Chipotle Mexican Grill on Tuesday reported disappointing sales as price hikes helped boost profits but may have scared away some inflation-weary customers.
“The low-income consumer definitely has pulled back their purchase frequency,” CEO Brian Niccol said on the company’s conference call. “Fortunately for Chipotle, you know, the majority of our customers are a higher household income consumer.”

The company also said it would raise prices again in August, indicating that costs keep rising for its restaurants.

Shares of Chipotle rose more than 8% in extended trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $9.30 adjusted vs. $9.04 expected
Revenue: $2.21 billion vs. $2.24 billion expected

The burrito chain reported second-quarter net income of $259.9 million, or $9.25 per share, up from $188 million, or $6.60 per share, a year earlier. The company said it faced higher costs for key ingredients like avocados, beef and dairy, which offset the benefit from price increases.
Excluding legal costs, restaurant closure expenses and other items, Chipotle earned $9.30 per share in the quarter that ended June 30.

Net sales climbed 17% to $2.21 billion. Same-store sales rose 10.1% in the quarter as consumers resumed ordering their burritos and tacos at Chipotle restaurants. Wall Street was expecting same-store sales growth of 10.9%, according to StreetAccount estimates.
Executives told analysts on the quarterly conference call that sales have slowed since May. However, one bright spot was that restaurants in college towns have seen their seasonal traffic return to pre-pandemic levels. About 15% of Chipotle locations are near colleges, executives said.
Only 39% of transactions during the quarter came from digital orders. The company said its loyalty program has more than 29 million members.
Delivery orders fell slightly, which helped Chipotle’s margins. While many customers love the convenience of delivery, third-party companies like Doordash charge Chipotle commission fees on every order, weighing on its profits.
Looking to the third quarter, Chipotle is projecting same-store sales growth in the mid- to high-single digits. The forecast includes next month’s planned price increases.
During the second quarter, Chipotle’s board approved an additional $300 million to repurchase shares of the company.
Read the full earnings report here.

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New research suggests that a lack of exposure to two common viruses during the Covid-19 pandemic may have increased the chances of children becoming severely ill with acute hepatitis.
Two research teams said that lockdown restrictions could have led some infants to miss out on early immunity to both adenovirus and the newly linked adeno-associated virus 2 (AAV2).
Crucially, both teams said they found no evidence of a direct link between the spike in hepatitis cases and SARS-CoV-2 infection, the cause of Covid-19.

More than 1,000 children in 35 countries have developed an unidentified type of severe acute hepatitis — or liver inflammation — since the first case was reported in the January 2022.
Yanukit Raiva | Eyeem | Getty Images

Scientists in the U.K. say they have identified the likely cause of a recent outbreak of mysterious liver disease afflicting young children around the world.
New research suggests that a lack of exposure to two common viruses during the Covid-19 pandemic may have increased the chances of children becoming severely ill with acute hepatitis.

In studies published Tuesday, two research teams from University College London and the University of Glasgow said that lockdown restrictions could have led some infants to miss out on early immunity to both adenovirus and the newly linked adeno-associated virus 2 (AAV2).
Crucially, both teams said they found no evidence of a direct link between the spike in hepatitis cases and SARS-CoV-2 infection, the cause of Covid-19.

Coinfection of viruses

More than 1,000 children in 35 countries have developed an unidentified type of severe acute hepatitis — or liver inflammation — since the first case was reported in January.

The majority of cases have been in children aged five years old or younger, though diagnoses have been detected in children aged up to 16 years.
Adenovirus, which typically causes mild cold or flu-like illness, was previously believed to be partly responsible for the mysterious outbreak, as it was the most commonly found virus in samples from affected children.

However, the new research indicated that adeno-associated virus 2, which normally causes no illness and cannot replicate without a “helper” virus such as adenovirus or herpesvirus, was present in 96% of cases of unknown hepatitis examined across both studies.

A mystery solved?

Researchers now say that coinfection with the two viruses — AAV2 and an adenovirus, or less commonly the herpesvirus HHV6 — could offer the best explanation for the recent outbreak.
“While we still have some unanswered questions about exactly what led to this spike in acute hepatitis, we hope these results can reassure parents concerned about Covid-19 as neither teams have found any direct link with SARS-CoV-2 infection,” Professor Judith Breuer, UCL GOS Institute of Child Health, said in the report.

Typically, children gain exposure — and immunity — to adenoviruses and other common illnesses during their early childhood years. However, pandemic restrictions largely limited that early exposure.
Eric Lalmand | Afp | Getty Images

The findings add to theories among some health experts that Covid lockdowns have reduced public immunity to a number of common illnesses. The researchers added there was no link to coronavirus vaccines.
The two studies were conducted independently and simultaneously using U.K. samples. Dr. Sofia Morfopoulou, professor at UCL’s GOS Institute of Child Health, said further research was now needed to compare their findings with cases of acute hepatitis identified in other countries.
“International collaborations to further investigate and elucidate the role of AAV2 and co-infecting viruses in pediatric unexplained hepatitis in patients from different countries are now needed,” she said.

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SMALL BUSINESS PLAYBOOK 2022
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A record 27.2% of total federal contracting funds were awarded to small businesses in fiscal 2021, according to just-released data from the Small Business Administration.
While more dollars ($154.2 billion) and a higher percentage of federal work went to Main Street, a multi-year decline in the total number of small businesses to win government contracts continues.
In 2010, there were 125,000 small businesses that benefited, but now that’s down to a little over 71,000 firms, and the government continues to fall short on its goals for women and minority businesses.

DENVER, COLORADO – MAY 3: Seen through the window of Maria Empanada on South Broadway, Small Business Administration Administrator Isabella Guzman does an interview with a local television station on May 3, 2022 in Denver, Colorado.
Rj Sangosti/medianews Group/the Denver Post Via Getty Images | Denver Post | Getty Images

The federal government awarded $154.2 billion to small businesses in fiscal year 2021, an $8 billion increase from the previous fiscal year, according to data from the Small Business Administration released Tuesday.
That’s a record 27.2% of total federal contracting funds, exceeding the government’s goal of 23%.

“We are excited to see that more dollars and a larger percentage are going to small businesses,” said SBA Administrator Isabel Guzman, adding that several of the changes President Biden has announced since taking office are starting to take hold. These efforts are aimed at leveling the playing field for small businesses competing for federal contracts, an area where many have struggled.
Still, there’s work to be done. The number of small businesses receiving prime contracts fell again in fiscal 2021, continuing a multi-year trend. The most recent data show that 71,441 small businesses received contracts, down 5.7% from 75,726 in fiscal year 2020.  
By contrast, about 125,000 small businesses contracted with the federal government in fiscal year 2010, according to a report by The National Equity Atlas, produced by PolicyLink and the USC Equity Research Institute (ERI) that used SBA data.
Small business advocates cite several reasons for the difficulty small businesses face in procuring government contracts. Part of the problem is due to competition from larger, more established businesses that have more experience, said Shane McCall, equity partner at Koprince McCall Pottroff who works with small businesses. There can also be procedural headaches and statutory requirements that prevent some businesses from applying in the first place, he said.
The federal government’s bonding requirements, in particular, tend to disproportionately impact disadvantaged business enterprises, said Judith Dangerfield, a senior fellow at PolicyLink, a national research and action institute focused on advancing economic and social equity. These business owners must overcome the same bias — the notion that race equals risk — that they face in banking and finance, she said. “As a result, bonding has been a barrier to participation for DBE firms for decades,” she said.

The best federal agencies for small business contracts
Guzman said she is encouraged by the positive developments in the past fiscal year. Notably, 21 of the 24 agencies monitored by the SBA received an “A+” or “A” rating on its scorecard.
The 11 agencies to receive an “A+” grade are: The Department of Commerce, The Department of Homeland Security, The Department of Labor, The Department of State, The Department of the Interior, The Environmental Protection Agency, The General Services Administration, The National Science Foundation, The Nuclear Regulatory Commission, The Office of Personnel Management and The Small Business Administration.
Ten agencies received an “A” grade: The Agency for International Development, The Department of Agriculture, The Department of Defense, The Department of Education, The Department of Energy, The Department of Justice, The Department of Transportation, The Department of Veterans Affairs, The National Aeronautics and Space Administration and the Social Security Administration.   
Government goals for women and minority businesses not met
Still, it’s by no means a perfect system, especially for women-owned small businesses and those located in historically underutilized business zones (HUBZones). The women-owned small businesses federal contracting goal has been met just twice since it was established in 1994 and the HUBZone goal has never been met, Goldman Sachs CEO David Solomon wrote in a recent op-ed for CNBC in which he voiced the bank’s support for the first reauthorization by Congress of the SBA in over two decades to provide it with more ability to support small business.
In 2021, women-owned small businesses received $26.2 billion in federal contracts, representing 4.63% of the fiscal year 2021 total eligible dollars, the SBA said. The goal was 5%.
HUBZone small businesses, meanwhile, received a historic $14.3 billion in federal contract awards, translating into 2.53% of the fiscal year 2021 total eligible dollars. It’s the highest level in about 10 years, Guzman said, but still falls short of the government’s 3% statutory goal. 
While the agency didn’t meet these goals, Guzman said “they are still on the horizon.”
For women-owned businesses, SBA has increased the number of certified firms to nearly 6,000 from about 1,000. It has also expanded the NAICS codes, the classification system used by the government for business categories, for which women-owned businesses can receive set-aside awards. More than 92% of federal spending is covered by NAICS codes eligible for WOSB (Women Owned Small Businesses) set-aside awards, according to the SBA.
The SBA is also continuing to work on helping HUBZone businesses compete for federal contracts. In 2020, the agency simplified rules to help these businesses compete more effectively. Guzman said the agency aims to do “expanded outreach and make sure more businesses know about the simplified rules.”
Helping small businesses obtain more federal contracts has been a goal of President Biden. Notably, small disadvantaged business spending reached 11% for the first time, according to the new SBA data. The target is to hit 15% of federal contracts by 2025.
White House reforms for Main Street
Late last year, the White House announced key reforms to promote more equitable buying practices. One example is the effort to reform the federal government’s use of “category management,” which has contributed to the consolidation of contracting dollars, said Eliza McCullough, an associate at PolicyLink. The practice allows federal agencies to buy contracts as an organized entity, rather than as thousands of independent buyers. This helps to eliminate redundant buying choices, but an unintended result is that small, disadvantaged businesses receive a proportionally lower share of contracts, she said.
Reforms to mitigate the inequities include giving agencies automatic “credit” under category management for all awards made to small, disadvantaged businesses and strengthening the voice for small business equity considerations in category management governance, McCullough said.
“Along with increased investment in Historically Black Colleges and Universities and other institutions that serve communities of color to uplift the next generation of Black-, Latinx-, and Tribal-owned small businesses, these reforms democratize access to federal contracts and foster inclusive business development,” McCullough said. More

On Wed., July 27, the House Committee on Oversight and Reform is holding a hearing with the CEOs of firearm manufacturers Daniel Defense, Smith & Wesson and Sturm, Ruger & Co. on the topic of gun violence in America, with a special focus on the sales and marketing of assault rifles.
The hearing comes amid the resurging debate over restrictions on guns following the mass shootings in Uvalde, Texas, and Buffalo, New York, and most recently, in Highland Park, Illinois.

While the debate usually tends to focus on firearm production, distribution and consumerism as avenues for intervention, it seems like some of that attention may be going to marketing now.
Although there is no federal regulation on how guns are advertised, many top media companies have strict policies against ads that promote or sell weapons. Yet firearm companies and influencers are able to post some content across social media.
Advocates for stricter firearm laws believe limiting the marketing of assault weapons could translate to fewer gun-related deaths. Should the U.S. take a bigger stance on regulating them?
Watch the video to find out more.

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