Raphael Stevens

American Airlines and United Airlines are upgrading their international business-class seats.
It’s part of a growing trend as airlines race to update their premium cabins with doors, .
Carriers are betting that customers will continue to splurge on more luxurious travel.

American Airlines new business-class suite.
American Airlines

DALLAS — Armed with dollops of caviar and handfuls of Bang & Olufsen headphones, U.S. airlines are duking it out for international business-class dominance. There are even differences between seats in the same cabin.
Next week, American Airlines plans to start flying its upgraded business-class “suites” that feature today’s premium-class must-have — a sliding door — and other features like a “trinket tray” and a wireless charging pad.

Within the cabins on its subset of Boeing Dreamliners, which American is calling the 787-9P (the P stands for premium), there will be eight “Preferred” suites that the airline says will have 42% more “living area.” They’ll be first come, first serve with no upcharge, at least for now.
United Airlines is hoping to outdo its rivals by putting doors on its Polaris long-haul business class seats; creating a new option at the front of the cabin called “Polaris Studio,” which has an ottoman (for a visitor); and installing 27-inch 4K screens. The studios are 25% larger than regular suites, United says. It hasn’t yet said how much more it will charge for the studios over the standard suites.

Having an even-higher tier of seats within long-haul top-tier classes has been catching on.
Virgin Atlantic has the “Retreat Suite” at the front of Upper Class on its Airbus A330s and Lufthansa is offering a two-person suite in its new Allegris first class that can be converted into a double bed. Etihad has a three-room option called “The Residence” on Airbus A380s, which can cost $20,000 or more for a one-way ticket between New York and Abu Dhabi, though the airline varies how it uses those jets.
“The experience here is a way to give not only our existing customers a wider range of products to pick from,” Andrew Nocella, United’s chief commercial officer, told reporters earlier this month. “We just didn’t have something better, and now we do.”

American and United took a page from Delta Air Lines, the most profitable U.S. carrier, which already offers suites with sliding doors in its Delta One cabin. The Atlanta-based carrier, in turn, last year opened a dedicated lounge for the highest-tier customers, a move American and United had already made.

Betting on business

United Airlines’ new Polaris cabin configuration.
United Airlines

Business-class tickets are costly for many consumers. A ticket aboard American’s new suite, leaving Aug. 8 and returning a week later, is going for $5,747 from Philadelphia to London, compared with $867 in standard coach.
Getting more customers to pay up for pricier seats is key for an industry with high costs and thin margins. Delta had a 7.6% pretax margin last year, United had 7.3%, while American’s was 2.1%, and the broader S&P 500’s was 12.8%, according to FactSet data.
Airline executives are banking more than ever that consumers will continue to splurge on better travel experiences despite weaker-than-expected demand for lower-priced tickets like domestic coach this year.
“I think it’s growing this much because the experience in economy is so bad,” said Robert Mann, who worked at several airlines and is president of aviation consulting firm R.W. Mann & Co.

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Airlines have been updating their cabins for years and they have become so elaborate that they have slowed down some aircraft deliveries because of supply chain snarls and bottlenecks in regulators’ certification.
American is using the new suites in a combined, larger business-class for international travel, and getting rid of its first class, for the most part. By many measures, though, including space and amenities, the service is higher end than many “first class” cabins of the past.
“Really, business [class] is starting to become so similar it was hard to really differentiate, and we want to make sure we offer as many business-class seats as we can,” said Heather Garboden, American’s chief customer officer.
The name matters.
“A lot of corporations will not permit the purchase of first class, but they will permit business class,” said Mann.
Airline executives have been confident about their push to invest billions in the more luxurious cabins, brushing off signs of a possible economic downturn.
“We’re at a really uncertain economic time right now and premium demand has remained solid,” Garboden said.
Wealthier people “tend to do OK even in a recession,” Mann noted.
The number of premium seats is rising along with the experience.
American said by the end of the decade it will increase its lie-flat seats and premium economy seating by 50%. The airline also recently said it will offer free satellite Wi-Fi to its loyalty program members, following Delta and United.
United is also growing its cabin with its Boeing 787-9 Dreamliners outfitted with eight “Polaris Studios,” in a 1-2-1 configuration and 56 Polaris business class suites. Currently, the planes only have 48 Polaris seats.
It expects to have 30 Dreamliners with the new interior by 2027 but a first flight, between United’s San Francisco hub and Singapore, is set for early 2026, the airline said earlier this month.

Softer touches

United Airlines new Polaris cabin configuration
United Airlines

The carriers are also trying to raise the bar on the so-called “soft product” like plush bedding and comforts like noise-cancelling headphones.
American announced last month that it won’t collect its Bang & Olufsen headphones from Flagship travelers before landing so they can keep watching movies and other entertainment longer.
“Polaris food and beverage offerings are being upgraded at the same time with enhanced meal choices on all new dishware, glassware and fresh white linens,” United’s Nocella said. “We’ve even added red pepper flakes in addition to salt and pepper so passengers can spice up their meals.”
While the top-tier business class is offering higher tech and more high-touch service, the carriers don’t have the over-the-top amenities of international airlines.
United is planning an amuse bouche of Ossetra caviar for Polaris. Meanwhile, in first class in Emirates , which has larger aircraft with the Airbus A380, travelers have access to showers on board and “unlimited” caviar service.
For some, good service is simpler.
“I could be sitting up front or I can be sitting in the back but if the plane’s late, the plane’s late,” Mann said. More

Costco on Thursday posted quarterly earnings and revenue that topped estimates as the warehouse club’s sales climbed 8%.
The membership club could benefit from tariff volatility as it offers bulk discounts and competitive prices.
On the company’s earnings call, CEO Ron Vachris said Costco rushed shipments ahead of tariffs and has rerouted goods from countries with higher tariffs to non-U.S. markets.

The sign on the side of a Costco is seen in Hawthorne, California, on April 4, 2025.
Jay L Clendenin | Getty Images

Shares of Costco fell slightly on Thursday, despite the warehouse club posting quarterly earnings and revenue that topped estimates and reporting 8% year-over-year sales gains.
Unlike many retailers, Costco does not provide an annual outlook. Yet the company’s leaders spoke on an earnings call about the challenges and higher costs tariffs have meant for its business

Here’s how the warehouse club retailer did in its fiscal third quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: $4.28 vs. $4.24 expected
Revenue: $63.21 billion vs. $63.19 billion expected

Costco’s net income for the three-month period that ended May 11 rose to $1.90 billion, or $4.28 per share, compared with $1.68 billion, or $3.78 a year earlier. Revenue rose from $58.52 billion in the year-ago period.
Comparable sales, an industry metric that takes out one-time factors such as store openings and closures, rose 8%, and e-commerce sales rose nearly 16% compared with the year-ago period, excluding gas and the impact of changes to foreign exchange.
As tariffs raise economic worries, and potentially consumer prices, Costco could stand to benefit. Unpredictable tariff policy could help drive more customers to the warehouse club, which is known for its competitive prices and bulk discounts, and encourage them to renew membership. Its clubs also sell discounted gas and groceries, which are steadier traffic drivers even when consumers pull back on spending. And compared with some other retailers, Costco has a stronger hand in price negotiations with suppliers because of its large size.
About a third of Costco’s U.S. sales are goods brought in from other countries, CFO Gary Millerchip said on the company’s earnings call. He said items imported from China represent about 8% of total US sales.

Some retailers have already warned that higher tariffs will mean higher prices. Best Buy CEO Corie Barry said Thursday that the retailer had already raised prices on some consumer electronics because of tariffs. Cosmetics company E.l.f. Beauty announced a price increase on its makeup last week. And Walmart CFO John David Rainey warned earlier this month that higher prices were coming to the discounter’s stores and website in late May or June.
On the company’s earnings call, CEO Ron Vachris said Costco has looked for ways to reduce tariff costs while keeping prices low. He said its buyers rushed orders to get them to the U.S. ahead of tariffs. It has rerouted goods from countries with higher tariffs to non-U.S. markets. And it’s sourced more items for its private brand, Kirkland Signature, in the countries or regions where the items are sold.
Even with tariffs, he said, Costco has lowered the price of some items including eggs, butter and olive oil. He said it’s also trying to lean into reasons that customers might sign up for or renew membership, such as extending the hours of its gas stations that sell discounted fuel.
Compared to other retailers, Costco sells a slimmer variety of items like having fewer different brands of peanut butter or diapers. Millerchip said that limited approach means Costco is a bigger buyer and can work more closely with suppliers on pricing. He said Costco can also rotate to other items, if needed.
In some cases, Costco has absorbed tariff-related cost differences and in other cases, it has raised prices, Millerchip said. For example, the retailer decided to hold the line on the price of pineapples and bananas from Central and South America because they are staple items for shoppers, he said.
“We felt it was important to to really eliminate the impact there for the member by working with our suppliers and by us finding efficiencies and accepting that there may be a margin impact,” he said.
On the other hand, he said, it decided to increase the price for flowers from Central and South America since those are a more discretionary items.
As of Thursday’s close, shares of Costco are up about 10% so far this year. That has outpaced the S&P 500’s less than 1% gains during the same period. More

Gap delivered another strong earnings beat, but President Donald Trump’s trade war is weighing on its turnaround.
Tariffs could cost the company between $250 million and $300 million, it said, but with mitigation efforts it expects the cost to be between $100 million and $150 million.
CEO Richard Dickson told CNBC it plans to diversify its supply chain and reduce its exposure to China and that it isn’t planning for “meaningful” price increases.

People walk past the entrance of a Gap store in Paris, France, July 1, 2021.
Sarah Meyssonnier | Reuters

New tariffs could impact Gap’s business by $100 million to $150 million, if they remain in effect, the company said Thursday when announcing fiscal first-quarter earnings. 
Shares fell more than 15% in after-hours trading.

In a news release, Gap said new 30% duties on imports from China and a 10% levy on imports from most other countries will cost the company between $250 million and $300 million without mitigation efforts. For now, it’s leaving that impact out of its guidance. 
Gap said it’s already mitigated about half of those costs and without further action, the cost is expected to be between $100 million and $150 million, which will likely show up on the balance sheet in the back half of the year. The company said it’s going to build on its mitigation efforts by continuing to diversify its supply chain and reducing its exposure to China.
CEO Richard Dickson said on a conference call with investors Thursday that the company is planning to buy more cotton from the U.S. to help mitigate the tariff impact.
“Based on what we know today, we do not expect there to be meaningful price increases or impact to our consumer,” Dickson told CNBC in an interview. “I’ve talked about this often: We truly believe that strong brands can win in any market. It’s a big industry. It’s a big market. Obviously we’re a big player with market share, but as we look ahead, we see the potential to further market our brands and gain share.”
Beyond tariffs, Gap issued fiscal first-quarter results that beat expectations on the top and bottom lines.

Here’s how the apparel company performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 51 cents vs. 45 cents expected
Revenue: $3.46 billion vs. $3.42 billion expected

The company’s reported net income for the three-month period that ended May 3 was $193 million, or 51 cents per share, compared with $158 million, or 41 cents per share, a year earlier. 
Sales rose to $3.46 billion, up about 2% from $3.39 billion a year earlier.
Gap’s guidance was largely in line with consensus, but its gross margin forecast came in weaker than expected. It’s expecting full-year sales to grow between 1% and 2%, in line with LSEG expectations of 1.3% growth.
For the current quarter, it said it expects sales to be flat, compared with LSEG expectations of 0.2% growth. It’s expecting its gross margin to be 41.8%, weaker than the 42.5% that StreetAccount had expected. That expected impact to gross margin isn’t related to tariff effects, but rather the company lapping certain benefits it saw in the year-ago period related to its credit card program.
In March, before President Donald Trump issued new tariffs on imports from most parts of the world, the company was expecting a minimal impact from the duties. But three months later, it’s in a different position.
In March, Gap said it sources less than 10% of its products from China, but it now expects the country to represent less than 3% of its sourcing by the end of the year. The Trump administration imposed a new 30% tariff on imports from China.
Its two largest trading partners are Vietnam and Indonesia, where Gap manufactured 27% and 19% of its products in fiscal 2024, respectively, according to its most recent annual filing. Vietnam is facing a potential 46% reciprocal tariff and, if that duty remains in effect, it could have a significant impact on Gap’s income. 
Trump’s trade war and the duties that are currently in effect are throwing a wrench into Dickson’s plans to turn around the legacy retailer — efforts that are well underway and continuing to bear fruit. 
During the quarter, comparable sales grew 2%, the company said, essentially in line with StreetAccount expectations of 1.8%. Gross margin and operating margin also came in higher than expected. 
Here’s a closer look at each Gap brand’s performance. 

Old Navy: Gap’s largest and most important brand notched sales of $2 billion, up 3% compared with last year, the company said. Comparable sales grew 3%, it said, ahead of StreetAccount expectations of 2.1%. Denim and active led the brand’s growth, which was buoyed by marketing designed to get all of Gap’s brands back at the center of culture. Old Navy’s new campaign “Old Navy. New Moves” features celebrities including Lindsay Lohan and Dylan Efron.

Gap: The company’s namesake banner saw sales of $724 million, up 5% compared to last year. Comparable sales were up 5%, ahead of expectations of 3.4%. Dickson has focused much of his turnaround efforts on the Gap brand, and it’s been a standout performer over the last couple of quarters. Gap brand’s growth was fueled by “style, product newness, innovation and compelling marketing,” Dickson said. “Gap is speaking for itself, and people are speaking about Gap.”

Banana Republic: The safari chic brand is still seeing troubles, with sales down 3% to $428 million and comparable sales flat, compared with expectations of 1.5% growth. The company said it remains focused on improving the brand. Dickson said he’s “encouraged” by the progress Banana is making — such as its splashy collaboration with HBO’s hit show “The White Lotus” — but there’s still more work to be done to win back the customer’s trust.

Athleta: The athleisure brand has also been a drag on Gap’s overall performance, with sales down 6% to $308 million and comparable sales down 8%. The figures were not comparable to consensus estimates. The company warned improvements at Athleta “will take time.” Dickson said the brand has made strides in improving profitability but it needs to fix product and marketing to get Athleta back to growth. The company said previously it’s still working through inventory that was geared more toward trend-forward customers and didn’t land as well with Athleta’s base. “While we’ve been successful in bringing new customers into the brand, we just still did not have enough compelling products to appeal to our large existing base, and that’s showing up in the performance,” Dickson said. More

American Eagle Outfitters reported quarterly earnings that missed expectations, reflecting a $75 million write-down in spring and summer merchandise.
“The first quarter was a challenging period for our business,” said CEO Jay Schottenstein in a media release.
The retailer pulled its full-year guidance earlier this month, citing “macroeconomic uncertainty.”

A shopper walks past the American clothing and accessories retailer American Eagle store in Hong Kong.
Budrul Chukrut | Lightrocket | Getty Images

American Eagle Outfitters reported quarterly earnings on Thursday that missed expectations, reflecting a $75 million write-down in spring and summer merchandise, following the retailer pulling its full-year guidance earlier this month due to macroeconomic uncertainty.
“The first quarter was a challenging period for our business,” CEO Jay Schottenstein said in a release. “While we are disappointed with the results, we are taking actions to better position the company and drive stronger performance in the upcoming quarters. Our brands remain resilient. The team is executing with urgency as we look to strengthen both the topline and profit flow-through.”

The Pittsburgh retailer’s results do not come as a surprise for investors, considering it preannounced some of its results two weeks ago. At that time, it also announced it would withdraw its full-year guidance as it manages slow sales, steep discounting and a volatile macroeconomic environment.
Shares fell about 8% in extended trading.
Here’s how the apparel company did in its fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Loss per share: 29 cents adjusted vs. loss of 22 cents expected
Revenue: $1.09 billion vs. $1.09 billion expected

Prior to the preannouncement, analysts had been expecting earnings per share to be an 11-cent profit.
The company, which makes fashion clothing targeted at teens and young adults, reported an operating loss for the three-month period that ended May 3 of $85.18 million compared with a net income of $77.84 million a year earlier. 

Excluding one-time charges related to restructuring and a supply chain optimization project, AEO posted an adjusted operating loss of $68.06 million. The loss also reflects “higher than planned” promotions and a write-off of $75 million in spring and summer merchandise.
Revenue dropped to $1.09 billion, in line with expectations but down slightly from $1.14 billion a year earlier.
Comparable sales were down 3% during the quarter, led by a 4% decline at the company’s intimates and activewear line, Aerie. The namesake brand saw comparable sales down 2%.
AEO issued downbeat guidance for the second quarter, expecting revenue to be down 5% compared to an estimate of 4%, comparable sales down 3% and gross margin down year-over-year. Its operating income for the second quarter is expected to be between $40 million and $45 million.
Schottenstein said during a conference call with investors on Thursday that he was “disappointed” by the first-quarter results. He said earlier this month that the $75 million write-off is due to miscalculated merchandising strategies resulting in excess inventory and higher promotions.
Jennifer Foyle, president and executive creative director for AE & Aerie, said on Thursday’s call that the brand had misses on the merchandising product in a handful of key categories, which was compounded by a cool spring and a slow start to the quarter in February. She said shorts were a tough product across all AEO brands.
“Some of our big fashion ideas for the season simply did not resonate with our customer,” Foyle said, discussing Aerie’s performance.
Executives on the call repeatedly highlighted the company’s goal to be on track for the important back-to-school season later this year.
American Eagle is not the only retailer to withdraw or modify financial guidance this year based on President Donald Trump’s ever-changing trade policy.
E.l.f. Beauty, Canada Goose, Ross and Mattel all pulled their full-year guidance recently due to trade uncertainty. Other brands, like Abercrombie & Fitch and Macy’s have cut their profit outlooks.
On Thursday’s call, CFO Michael Mathias said the company is on track to reduce its sourcing exposure to China to under 10% this year, with the fall and holiday season down to low single digits. He said the mitigated tariff impact to the full year is around $40 million, including a “couple million dollars” in the second quarter that is already embedded in the guidance, and the rest is spread out later in the year.
During last quarter’s call with investors, CFO Michael Mathias said the company sources just under 20% of its products from China. He said then that tariffs could result in a $5 million to $10 million hit and could affect gross margin, although at the time he said the company was not planning on passing costs onto the consumer. On Thursday, the executives did not specify whether prices would be raised.
According to AEO’s website, the company works with the greatest number of factories in China (101), Vietnam (67) and India (39). It works with just 12 factories in the United States.
Before withdrawing its guidance, AEO warned back in March that shoppers are pulling back on spending.
The company added Thursday that it is on track to complete its $200 million accelerated share repurchase program in the second quarter.
As of Thursday’s close, AEO stock has fallen roughly 33% year-to-date. More

Boeing could assess moving up production of its bestselling Max jets to 47 a month by the end of the year, its CEO said.
The company also plans to resume deliveries of airplanes to Chinese airlines next month after a pause during a trade battle between the country the Trump administration.
Boeing CEO Kelly Ortberg largely brushed off the tariff impact and said he didn’t expect all the duties to be permanent.

Boeing Co. 737 Max fuselages at the company’s manufacturing facility in Renton, Washington, on April 15, 2025.
Bloomberg | Bloomberg | Getty Images

Boeing’s airplane deliveries to China will resume next month after handovers were paused amid a trade war with the Trump administration, CEO Kelly Ortberg said Thursday, as he brushed off the impact of tit-for-tat tariffs with some of the United States’ largest trading partners this year.
Ortberg had said last month that China had paused deliveries.

“China has now indicated … they’re going to take deliveries,” Ortberg said. The first deliveries will be next month, he told a Bernstein conference on Thursday.
Boeing, a top U.S. exporter whose output of airplanes helps soften the U.S. trade deficit, has been paying tariffs on imported components from Italy and Japan for its wide-body Dreamliner planes, which are made in South Carolina, Ortberg said, adding that much of it can be recouped when the planes are exported again.
“The only duties that we would have to cover would be the duties for a delivery, say, to a U.S. airline,” he said.

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Regarding the rapidly changing trade policies that have included several pauses and some exemptions, Ortberg said, “I personally don’t think these will be … permanent in the long term.”
He reiterated that Boeing plans to ramp up production this year of its bestselling 737 Max jet, which will require Federal Aviation Administration approval.

The FAA capped output of the workhorse planes at 38 a month last year after a door plug that wasn’t secured when it left Boeing’s factory blew out midair in the first minutes of an Alaska Airlines flight.
Ortberg said the company could produce 42 Max jets a month by midyear and assess moving up to 47 a month about half a year later.
The company’s long-delayed Max 7 and Max 10 variants, the largest and smallest planes in the narrow-body family, are scheduled to be certified by the end of the year, he said.
Many airline executives have applauded Ortberg’s leadership since he took the reins at Boeing last August, tasked with stemming years of losses and ending reputational and safety crises, including the impact of two fatal Max crashes.
CEOs have long complained about delivery delays from the company that left them short of planes during a post-pandemic travel boom.
“I do think Boeing has turned the corner,” United Airlines CEO Scott Kirby told CNBC’s “Squawk Box” earlier Thursday. He said supply chain problems are limiting deliveries of new planes overall.
“We over-ordered aircraft believing the supply chain would be challenged,” he said.

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Non-alcoholic beer is projected to overtake ale as the second-largest beer category worldwide this year, according to IWSR.
Younger consumers have been drinking less alcohol, fueling the trend.
Major beer brands like Guinness, Budweiser and Heineken have rolled out non-alcoholic alternatives over the last five years.

Non-alcoholic beers photographed for Food in Washington, DC on March 11, 2024.
Scott Suchman | The Washington Post | Getty Images

Non-alcoholic beer is on track to overtake ale as the second-largest beer category by volume worldwide this year, according to a new projections from industry tracker IWSR.
While overall beer volume fell roughly 1% in 2024, volume for its non-alcoholic counterpart grew 9% worldwide, according to IWSR. The category’s growth accelerated in 2018 and has continued to outstrip the broader beer market since then.

IWSR is projecting that no-alcohol beer will grow by 8% annually through 2029, while ale’s volume is expected to slide 2% annually in that same period.
Despite recent growth, no-alcohol beer is far from becoming the top-selling beer category globally and only holds about 2% of worldwide beer market share. With 92% market share, lager is far and away the largest beer category and still growing, albeit at a slower pace than non-alcoholic beer.
No-alcohol beer has gained popularity as more consumers cut back on their alcohol consumption, prompting brewers to invest in zero-proof alternatives. The trend is particularly striking across younger age cohorts; Gen Z drinks less than prior generations at the same age, and millennials hold the largest share of no-alcohol drinkers, according to IWSR. Younger drinkers use buzzwords like “sober curious” and “damp lifestyle” to describe moderating their alcoholic intake, rather than abstaining entirely.
Additional fuel for the trend comes from the companies making non-alcoholic beers, which have gotten better at mimicking the taste of their alcoholic twins. Practically every major beer brand, from Diageo’s Guinness to Heineken and Anheuser-Busch InBev’s Budweiser, has rolled out a zero-proof version over the last five years.
Non-alcoholic beer’s worldwide retail sales surpassed $17 billion in 2023, according to Bernstein. Looking at global markets, Germany, Spain and Japan bought the most non-alcoholic beer that year. The U.S. landed in sixth place for its no-alcohol beer sales, although its ranking falls much further when measured by overall sales penetration.

Much of the growth in the U.S. is fueled by Athletic Brewing, now the top-selling no-alcohol beer brand. The upstart, which was founded in 2018, holds 17% of the category’s volume share, edging out AB InBev’s Bud Zero and Heineken’s 0.0 version. Just three years earlier, Athletic held only a 4% share. The company was reportedly valued at roughly $800 million in its latest funding round in 2024.
Even non-alcoholic beer hasn’t been immune from the rash of celebrity-backed alcohol brands. Actor Tom Holland launched Bero, retired basketball star Dwyane Wade co-founded Budweiser Zero with AB InBev and podcast host and actor Dax Shepherd created Ted Segers. More