Raphael Stevens

Walmart CEO Doug McMillon said the retailer has moved aggressively to turn its profits around after disappointing Wall Street in the first fiscal quarter.
It is closely monitoring the spending patterns of its most value-conscious consumers and talking to suppliers about how they can absorb or cut back on costs, he said.
“We have been working really hard on costs top to bottom, taking action to get our costs down so that the second quarter looks better than the last quarter, and we’re on our way,” he said at an investor event near its hometown of Bentonville, Ark.

Doug McMillon, president and CEO of Walmart Inc. Corporation, participates in a Business Roundtable discussion on the”Future of Work in an Era of Automation and Artificial Intelligence”, during a CEO Innovation Summit, on December 6, 2018 in Washington, DC.
Mark Wilson | Getty Images

FAYETTEVILLE, Ark. — Thousands of Walmart employees gathered at a huge arena on Friday, dancing as the Jonas Brothers headlined the return of the annual event that acts as a company pep rally. Yet despite the festive backdrop, CEO Doug McMillon acknowledged the new challenge facing the company: inflation.
Between loud cheers and acts by celebrities, McMillon praised how employees across the world persisted during the pandemic while coping with thin staffs due to Covid. He noted that sales rose even as stores struggled to keep shelves stocked. And he vowed the company would avoid repeating the disappointing first quarter results, when inflation ate into profits.

“We’re working to fix that and improve our performance as we go through the year,” he said, adding that Walmart’s workforce is “resilient and we love the challenge of retail.”
Later in the day, McMillon also stressed to analysts that the company is scrutinizing its expenses and pushing suppliers to trim back and absorb some costs. And he noted Walmart is tapping the expertise of its leaders who operate in Brazil and other countries with a history of sharp inflation.
“We have been working really hard on costs top to bottom, taking action to get our costs down so that the second quarter looks better than the last quarter, and we’re on our way,” he said at an investor event near the company’s headquarters in Bentonville, Arkansas.
His comments came just weeks after Walmart’s stock had its worst day in 35 years. In mid-May, the company reported a quarterly profit that fell short of Wall Street expectations as higher costs of fuel and freight hurt earnings. Chief Financial Officer Brett Biggs also noted at the time that sky-high inflation was weighing on customers, with some buying half-gallons of milk and store brand deli meat to save on grocery bills.
Walmart’s quarterly performance — and similar results by Target — helped dragged down the companies’ stocks and the broader markets, with Walmart closing down 11.4% the day it reported earnings. The company’s stock has fallen about 13% so far this year, roughly in line with the S&P 500 Index.

Walmart’s annual gathering is known for its party-like atmosphere and traditionally coincides with its shareholders meeting. Employees across the world descend on Walmart’s birthplace for the event, donning company swag and wagging their home country’s flags, at the Bud Walton Arena on the University of Arkansas campus. Friday marked the return of the event since the pandemic.
At a question-and-answer session with analysts, McMillon said Walmart’s team has reacted “in a very detailed and aggressive way” in recent weeks as it pushes to become even more cost-efficient.
“Some people in the company kind of called it ‘old school Walmart’,” he said, referring to the company’s nearly 60-year history of obsessing over details to keep prices low.
McMillon also noted the company is closely watching spending patterns of its most value-conscious customers and making sure prices of staples that feed their families remain within reach. And as middle- and higher-income customers look to stretch their budgets as well, he said Walmart will work to draw them with clothing and other items they may not have bought at Walmart before.
He said that could ultimately help the company gain market share and increase profits.
“If the world is under more pressure and people are generally more value-conscious, we’re the place to go,” he said.

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Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer said Friday that any signs of consumer negativity next week will be a welcome sign for the Federal Reserve in its fight against inflation.
“I know it’s a total drag to hope for negativity, but that’s what we need right now” to bring inflation down, he said. “I bet we’ll find that confidence is falling rapidly.”

CNBC’s Jim Cramer said Friday that any signs of consumer negativity next week will be a welcome sign for the Federal Reserve in its fight against inflation.
“I know it’s a total drag to hope for negativity, but that’s what we need right now” to bring inflation down, he said. “I bet we’ll find that confidence is falling rapidly.”

The “Mad Money” host said he’s keeping watch on the consumer price index and University of Michigan consumer sentiment index coming out next week to confirm his prediction that consumer confidence is dropping.
“That’s exactly what the Fed doctor ordered,” he said.
He also previewed next week’s slate of earnings. All earnings and revenue estimates are courtesy of FactSet.
Tuesday: J.M. Smucker, Cracker Barrel
J.M. Smucker

Q4 2022 earnings release before the bell; conference call at 9 a.m. ET
Projected EPS: $1.88
Projected revenue: $1.98 billion

Cramer said that if the food manufacturer’s stock manages to rally on the heels of its quarterly earnings report, it’ll be a good omen for the rest of the industry.
Cracker Barrel

Q3 2022 earnings release tbd; conference call at 11 a.m. ET
Projected EPS: $1.27
Projected revenue: $790 million

Investors need to take note of any mentions of a more frugal consumer from the restaurant chain, Cramer said.
Wednesday: Thor Industries, Campbell Soup, Five Below
Thor Industries

Q3 2022 earnings release before the bell; conference call tbd
Projected EPS: $4.72
Projected revenue: $4.16 billion

Cramer said the recreational vehicle manufacturer’s earnings call is a must-listen for investors who want a read on the state of inflation.
Campbell Soup

Q3 2022 earnings release at 7:15 a.m. ET; conference call at 8 a.m. ET
Projected EPS: 61 cents
Projected revenue: $2.04 billion

“I like Campbell Soup’s management. I bet the stock can work its way higher,” he said.
Five Below

Q1 2022 earnings release after the close; conference call at 4:30 p.m. ET
Projected EPS: 58 cents
Projected revenue: $654 million

“Five Below’s got a good concept, good management, good stock,” Cramer said.
Thursday: Signet Jewelers, DocuSign, Vail Resorts
Signet Jewelers

Q1 2023 earnings release at 7 a.m. ET; conference call at 8:30 a.m. ET
Projected EPS: $2.38
Projected revenue: $1.81 billion

Cramer said he expects the company to put up strong numbers for its latest quarter.
DocuSign

Q1 2023 earnings release after the close; conference call at 4:30 p.m. ET
Projected EPS: 56 cents
Projected revenue: $683 million

Cramer said he expects a strong but stagnant performance from the company.
Vail Resorts

Q3 2022 earnings release after the close; conference call at 5 p.m. ET
Projected EPS: $9.03
Projected revenue: $1.15 billion

Cramer said he’s interested in knowing if the mountain resort company is concerned about an economic slowdown.

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The drawn-out bidding process for Kohl’s doesn’t appear to be coming to an end any time soon, with additional road blocks almost certain.
It could take several weeks, if not longer, for a deal to come together, a person familiar with the situation told CNBC.
The dialogue has been particularly lengthy because of the difficulty in securing financing in uncertain market conditions, the person said.

The Kohl’s logo is displayed on the exterior of a Kohl’s store on January 24, 2022 in San Rafael, California.
Justin Sullivan | Getty Images

The drawn-out bidding process for Kohl’s doesn’t appear to be coming to an end any time soon.
It could take several weeks, if not longer, for a deal to come together, a person familiar with the situation told CNBC. The dialogue has been particularly lengthy because of the difficulty in securing financing in uncertain market conditions, the person said, adding that a likely per-share deal price at this point would be in the mid-$50s.

Kohl’s shares closed slightly up at $41.48 Friday afternoon, giving the company a market value of roughly $5.33 billion. The stock had traded as low as $34.64 as recently as May 24.
“Anybody who buys the business is going to need time,” said the person, who requested anonymity because the discussions are private and ongoing. “Nobody is prepared to sign a deal right now.”
The Wall Street Journal reported Thursday evening that private equity chain Sycamore Partners and retail conglomerate Franchise Group have both submitted their bids to acquire the off-mall department store chain. It’s unclear whether any other parties are interested at this time, the Journal said. About two weeks ago, Kohl’s CEO Michelle Gass said final and fully financed bids from possible buyers were expected in the coming weeks.
This saga at Kohl’s has been playing out for more than half a year, which deal experts describe as an abnormal amount of time.
The off-mall department store chain was first urged in early December of 2021 by New York-based hedge fund Engine Capital to consider a sale, or another alternative to boost its stock price. At the time, Kohl’s shares were trading around $48.45.

In mid-January, activist hedge fund Macellum Advisors then pressured Kohl’s to consider a sale. Macellum’s CEO, Jonathan Duskin, argued that executives were “materially mismanaging” the business. He also said Kohl’s had plenty of potential left to unlock with its real estate.
That was enough for the retailer to get serious about its options. In early February, Kohl’s said it had brought on bankers at Goldman Sachs and PJT Partners to help the retailer field offers and also to make some outreach.
Spokespeople for Kohl’s and Sycamore declined to comment. Franchise Group, Goldman Sachs and PJT Partners didn’t respond to CNBC’s request for comment.
Kohl’s also that month deemed that an offer from Starboard-backed Acacia Research, at $64 a share, was too low. That offer valued Kohl’s business at about $9 billion.
Kohl’s probably wishes it had taken that offer, according to Brian Quinn, a professor at the Boston College Law School who specializes in mergers and acquisitions.
“The stock price that they thought internally they could maybe hit, that no longer looks reasonable,” he said. “My guess is that if you had told the board [at Kohl’s] what would happen in the marketplace in April and May, they would have sold the company.”
“But the thing is, nobody knew what the future was going to bring,” he added.
A cool start to the spring coupled with a softening consumer appetite for discretionary items amid rising inflation weighed on Kohl’s financial results for the three-month period ended April 30. Sales fell to $3.72 billion from $3.89 billion in 2021. Kohl’s also slashed its profit and revenue forecast for the full fiscal year.
Quinn said the bleak outlook likely jolted prospective buyers.
“It’s as if you were going to buy a house,” he said. “And as you’re talking to the seller, or the seller’s agent, the roof collapses. This is a very dynamic process in terms of negotiating.”
At one point, Simon Property Group, the biggest mall owner in the United States, was reportedly in the mix of potential bidders for Kohl’s. But a person familiar with the situation told CNBC last month, after Kohl’s dismal quarterly report, that Simon was not preparing a bid.
Quinn said that Kohl’s board of directors might end up balking at the lower-priced bids and not end up pursing a sale of the company after all. “And they might just not sell the company because of the current state of the market,” he added.
Sliding stock markets, supply chain headaches, surging interest rates and the war in Ukraine have combined to stifle deal-making and IPOs in the retail sector so far this year.
Experts say it’s unclear when that could pick back up. The consensus seems to be after Labor Day. For Kohl’s, the best bet might be to stall for as long as possible.
“Kohl’s probably did receive two bids, but it doesn’t like either one and it isn’t ready to say so with the market so unsettled,” Gordon Haskett analyst Don Bilson wrote in a research note. “That, as much as anything, explains why it may be bidding for more time.”

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Republicans this week introduced a road map describing how they would mitigate rising gasoline prices and address climate change if the party wins control of the House in November’s midterm elections.
The plan arises from the energy, climate and conservation task force established last year by House Minority Leader Kevin McCarthy, R-Calif., and involves proposals that run counter to the warnings of climate scientists.
The strategy provides a broad overview of how the party would address high energy prices but doesn’t set specific greenhouse gas targets.

U.S. House Minority Leader Rep. Kevin McCarthy (R-CA) speaks as House Minority Whip Rep. Steve Scalise (R-LA) and Rep. Lauren Boebert (R-CO) listen during a news conference at the U.S. Capitol May 11, 2022 in Washington, DC.
Alex Wong | Getty Images

Republicans this week introduced a road map describing how they would mitigate rising gasoline prices and address climate change if the party wins control of the House of Representatives in the November midterms.
The plan arises from the energy, climate and conservation task force established last year by House Minority Leader Kevin McCarthy, R-Calif., and involves proposals that run counter to the warnings of climate scientists.

The strategy provides a broad overview of how the party would address high energy prices but doesn’t set specific greenhouse gas emission targets. It calls for ramping up fossil fuel production and liquefied natural gas exports, as well as streamlining the permitting process for major infrastructure projects, according to The Washington Post, which first reported the plan.
The agenda also endorses legislation to expand hydropower, one of the oldest and largest sources of renewable energy, and condemns policies that increase U.S. demand for critical minerals mined from China, which are necessary for electric vehicle and renewable energy production. In a document introducing the road map, House Republicans cited Department of Energy statistics showing that only 3% of the more than 80,000 dams in the U.S. currently generate electricity.

“If Republicans earn back the House majority in the fall, we will be ready to enact that strategy and ease the suffering of working Americans’ wallets,” Rep. Garret Graves, R-La., the task force chair, wrote in a blog post.
Climate scientists have warned the world must dramatically reduce fossil fuel production to avoid the worst consequences of climate change. A recent report from the Intergovernmental Panel on Climate Change said that limiting global warming to close to 1.5 degrees Celsius will become impossible in the next two decades without immediate and major emissions cuts.
The GOP has historically opposed measures to tackle the climate crisis. The Trump administration, for example, sought to reverse more than 100 environmental rules it deemed burdensome to the fossil fuel industry.

This week’s plan takes a vastly different approach to addressing climate change than the Biden administration’s agenda, which involves slashing emissions in half by 2030 and reaching net-zero emissions by 2050.

More from CNBC Climate:

The GOP plans to unveil the six policy areas of their plan, called “Unlock American Resources,” “American Innovation,” “Let America Build,” “Beat China and Russia,” “Conservation with a Purpose” and “Build Resilient Communities,” over the next two months.
The road map also comes after the House last year passed more than $500 billion in climate investments as part of the president’s Build Back Better Act. That legislation is still stalled in the Senate after opposition from Republicans and Democratic Sen. Joe Manchin of West Virginia. Every Republican in Congress has opposed the funding, contending it would exacerbate the worst inflation the U.S. has seen in decades.
Environmentalists and congressional Democrats argue the GOP plan is not only insufficient but would worsen the climate crisis.
“This climate plan sounds like it was concocted by a comic book supervillain,” said Brett Hartl, government affairs director at the Center for Biological Diversity. “Republicans have managed to devise a scheme that would make climate change even more destructive.”
Rep. Frank Pallone, D-N.J., who is chair of the Energy and Commerce Committee, condemned the plan, saying if House Republicans were serious about addressing climate change, they would have supported legislation Democrats have put forward to lower energy prices and slash carbon pollution.
“This House Republican proposal simply recycles old, bad ideas that amount to little more than handouts to oil companies,” Pallone said in a statement. “It is a stunning display of insincerity to admit climate change is a problem but to propose policies that make it worse.”

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Outer space is getting crowded, with both commercial endeavors and secretive military projects. And it’s going to be up to the newest United States military branch, the Space Force, to protect American interests there.
Space launches in the U.S. have been on the rise, and participation by private companies has increased over the last decade. What’s more, satellite imaging in the ongoing war between Ukraine and Russia has underscored the importance of space-based assets, both commercial and military.”We’ve been collaborating with private industry for years now,” said Maj. Gen. Shawn N. Bratton, commander of the U.S. Space Force Space Training and Readiness Command. “And certainly we increase that activity as the presence of commercial industry increases in space.”

SpaceX, Virgin Orbit and United Launch Alliance, which is a joint venture of Lockheed Martin and Boeing, are launching more and more satellites into space. And in SpaceX’s case, some have increasingly ambitious projects involving reusable rockets, crewed flights and potential colonization.
“That’s what really provides us the edge over any other country in the world,” said U.S. Rep. Salud Carbajal, D-Calif., a member of the Space Force Caucus in Congress. “We really have a great partnership between our Department of Defense and those companies who make their own personal investments in technology for their own economic interests, of course, and we are able to spur that innovation”Watch the video to find out more about the future of the U.S. Space Force

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Three House Democrats are still pushing for relief on the $10,000 limit on the federal deduction for state and local taxes, known as SALT.
The lawmakers have asked the U.S. Department of the Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig to reverse a 2019 rule blocking a state-level SALT relief workaround.

Rep. Tom Suozzi, D-N.Y., speaks during a news conference announcing the State and Local Taxes (SALT) Caucus outside the U.S. Capitol on April 15, 2021.
Sarah Silbiger | Bloomberg | Getty Images

Three House Democrats are still pushing for relief on the $10,000 limit on the federal deduction for state and local taxes, known as SALT. 
Reps. Josh Gottheimer, D-N.J.; Tom Suozzi, D-N.Y.; and Mikie Sherrill, D-N.J., on Friday sent a joint letter to U.S. Department of the Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig, pleading to reverse a 2019 rule blocking a state-level SALT relief workaround.

Enacted by the Tax Cuts and Jobs Act of 2017, the SALT cap spurred legislation in Connecticut, New Jersey and New York that allowed residents to bypass the limit. These state-level laws permitted local charitable funds offering property tax credits to homeowners who contributed.
More from Personal Finance:House Democrats push for SALT relief in appropriations bill’Buy now, pay later’ loans make it tough to get a handle on your creditSocial Security’s funds have a new depletion date. What changes could be coming
However, the Treasury and the IRS blocked this strategy in 2019, saying the receipt of a SALT credit in return for charitable donations would constitute a “quid pro quo.”
“As Americans struggle with rising costs and sustained economic turmoil caused by the Covid-19 pandemic, we encourage you to take immediate action to support nonprofit charities,” the lawmakers wrote.
“Thirty-three states offer tax credits that encourage charitable giving to certain causes, and this rule unnecessarily restricts the ability of states to incentivize charitable donations to nonprofits,” they said.

The letter comes after five House Democrats, including Gottheimer, Sherrill and Suozzi, asked the House Appropriations Subcommittee on Financial Services and General Government to deny IRS funds to stop state-level SALT cap workarounds.
Given Democrats’ slim House majority, the SALT limit was a sticking point in Build Back Better negotiations. Although House Democrats in November passed an $80,000 SALT cap through 2030 as part of their spending package, Sen. Joe Manchin, D-W.Va., halted the plan in the Senate.

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President Joe Biden brushed off Tesla CEO Elon Musk’s reported economic anxieties by pointing to recent investments made by the electric-carmaker’s competitors.
Biden also took a dismissive-sounding swipe at the SpaceX founder: “Lots of luck on his trip to the moon.”
The president’s pithy put-down marked the latest point of friction with Musk, who has repeatedly criticized Biden.

President Joe Biden on Friday brushed off Tesla CEO Elon Musk’s reported “super bad feeling” about the U.S. economy, while praising some of Musk’s competitors for expanding their investments in electric vehicles.
Biden then took a dismissive-sounding swipe at Musk, a frequent critic of his administration. “Lots of luck on his trip to the moon,” Biden said of the SpaceX founder.

The president had been asked about Musk after a speech in Delaware touting the solid jobs report released earlier Friday. The Labor Department found that the U.S. economy added 390,000 jobs in May, a better figure than expected, while the unemployment rate held at the low level of 3.6%.
Musk, meanwhile, told executives in an email Thursday that he has a “super bad feeling” about the economy and will need to cut 10% of Tesla’s jobs, according to Reuters. Tesla shares fell on Friday.
Asked about Musk’s reported feeling, Biden praised Ford and Stellantis.
“Well, let me tell you, while Elon Musk is talking about that, Ford is increasing their investment overwhelmingly,” Biden said, pulling a notecard from his jacket pocket.
“I think Ford is increasing investment in building new electric vehicles, 6,000 new employees, union employees, I might add, in the Midwest,” he said, adding that “the former Chrysler corporation, Stellantis, they are also making similar investments in electric vehicles.”

Biden also noted Intel’s plans to add 20,000 new jobs as part of an investment in Ohio. 
“So, you know, lots of luck on his trip to the moon,” Biden said with a wave of his hands.
Musk didn’t immediately respond to a request for comment. But within minutes of Biden’s remark, Musk tweeted “Thanks Mr. President!” along with an April 2021 press release from NASA announcing that SpaceX, Musk’s rocket travel company, had been selected to land the next Americans on the moon.
Musk, one of the world’s richest people, is in the midst of a deal to purchase Twitter for $44 billion. He’s recently taken to sharing more politically charged tweets, including one message last month bashing Democrats and vowing to vote Republican.
The president’s put-down marked the latest point of friction with Musk, who has been openly critical of both the White House and Biden himself.
In March, Musk bristled after Biden’s State of the Union address cheered the electric-vehicle efforts being made by Ford and General Motors while failing to mention Tesla.
“Nobody is watching the State of the Union,” Musk said in an email to CNBC.
Two months later, Musk slammed the Biden administration as ineffective and said that “the real president is whoever controls [Biden’s] teleprompter.”
A spokesman for Biden shot back: “Count us as unsurprised that an anti-labor billionaire would look for any opportunity to nip at the heels of the most pro-union and pro-worker President in modern history.”
— CNBC’s Brian Schwartz contributed to this report.

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Payment history often not reported

BNPL companies generally don’t report to the credit-scoring companies when consumers use these loans. That makes it a challenge for a lender to know how many loans a consumer has outstanding. 
“That makes a big difference in terms of how much you should loan,” said Kenneth Lin, CEO of fintech company Credit Karma. “Oftentimes, a credit system is actually blind to how much you owe in the Buy Now Pay Later scenario.”
Consumers with multiple BNPL loans with multiple payment dates may find themselves in a debt spiral. “That’s when people get into deep trouble,” Lin said.

Difficult to build credit history

“When it comes to your credit, it’s all downside and no upside,” said Matt Schulz, senior credit analyst at LendingTree. 
Since BNPL companies generally don’t report positive payment history, “it’s really risky because you’re not able to build up your credit and show banks that you’re credit worthy,” he added. “On the other hand, if you slip up, a lot of times that mistake will get recorded and that can have a negative impact on your credit.” 
About 35% of consumers said they were at least considering using a buy now, pay later loan last month, according to Lending Tree. Another survey found 42% of BNPL users said they’d paid late on one of these loans. 

The impact of late payments varies

Krisanapong Detraphiphat | Moment | Getty Images

Experts say BNPL lenders may handle late payments differently.
For some, you end up getting hit with fees. For others, they just lock you out of the service for the future and they won’t lend to you again, Schulz said. Some companies will report delinquencies to the credit rating companies, while others won’t.
Meanwhile, the Consumer Financial Protection Bureau has opened an inquiry into how BNPL lenders are using consumer data and reporting that information. “The problem is that when they’re using buy now, pay later for more and more expenses, including groceries and other in store purchases, they can rack up a lot of debt,” CFPB Director Rohit Chopra said in an interview with CNBC.
“The key piece is to make sure that we’re not creating a system that…sends people into a spiral of debt that they ultimately cannot repay.”
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