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    Telehealth company Ro launches GLP-1 supply tracker to help patients navigate shortages

    Telehealth company Ro launched a new tracker to help patients find a popular class of weight loss and diabetes drugs called GLP-1s amid shortages of those treatments in the U.S.
    The tool could be valuable for Americans scrambling to find GLP-1s, such as Novo Nordisk’s Wegovy and Ozempic.
    Ro’s tool aims to make GLP-1 supply information more transparent and accessible for everyone, regardless of whether they are enrolled in any of the company’s programs.

    GLP-1 Supply Tracker from Ro. 
    Courtesy: Ro

    Telehealth company Ro on Wednesday launched a new tracker to help patients find a popular class of weight loss and diabetes drugs called GLP-1s amid shortages of those treatments in the U.S.
    The supply tracker could be a valuable tool for many Americans scrambling to get their hands on GLP-1s, such as Novo Nordisk’s weight loss injection Wegovy and diabetes drug Ozempic. Demand for those medications has far outpaced supply over the past year, forcing Novo Nordisk and Eli Lilly, the dominant players in the market, to invest heavily to scale up manufacturing.

    The tracker aims to make GLP-1 supply information more transparent and accessible for everyone, regardless of whether they are enrolled in any of Ro’s programs. The company is one of several digital health companies offering weight loss programs that can give users a GLP-1 prescription and access to coaching and other services. 
    The tracker is an interactive tool that gives people real-time supply information by drug, dose size and pharmacy location. Existing drug shortage databases, including one managed by the U.S. Food and Drug Administration, often don’t share localized data. 
    “We’re trying to make it as easy as possible for patients and providers to get a snapshot of what’s available, what’s not, and do that in the fastest way,” Ro co-founder and CEO Zachariah Reitano told CNBC in an interview. 
    He added that the GLP-1 shortages feel like a “national health-care crisis.” 
    “I don’t think that people are fully registering that lifesaving and life-altering medications that could benefit well over 100 million people in the U.S. are currently on a significant shortage, and that patients every month are having trouble,” Reitano said.

    Ro chose to make the tool free for anyone to use because a “basic inventory management system” for GLP-1s does not exist, making it a major contribution to the broader community that relies on those medications, according to Reitano. He added that opening up the tracker to everyone also makes it more likely for both Ro patients and people not enrolled in the company’s programs to access GLP-1s.

    Arrows pointing outwards

    Ro Telehealth GLP-1 Supply Tracker.
    Courtesy: Ro

    Anyone, including doctors, can submit an update to Ro’s tracker by filling out a report about availability or a shortage of a GLP-1 at a specific pharmacy in their area. Users have the option to automatically report that information to the FDA. 
    Ro will update the tracker based on its own supply data, which is generated when the company’s patients log that they have successfully picked up their medication at a pharmacy. Ro will also update the tracker with the latest information from the FDA, according to the company.
    In order to ensure that a medication is really in shortage, Reitano said the tracker factors in a combination of the speed, location and number of submissions. One report over a period of two months might not influence the tracker, for instance.
    Reitano said Ro has been building the GLP-1 tracker for about two months. The company hasn’t been collaborating with the FDA directly, but providing the agency more real-time data can help it keep its shortage list as up to date as possible, he said.
    This, in turn, means doctors will be able to make more informed choices about the best medication to prescribe to patients, Reitano said
    “If that list is outdated to reality, then you’re going to write a prescription assuming that the patient is able to get access to it,” Reitano said. “They’re not or they might be able to start but not continue, and that causes disruptions in their treatment.” 
    Individuals can sign up to receive automated email alerts about when a specific GLP-1 drug becomes available at a nearby pharmacy. The tracker also alerts patients about changes to the supply of a GLP-1 on the FDA’s drug shortage database. 
    The alerts include instructions to request that a pharmacy transfer their prescription to another location with supply in stock. Any patient can also message Ro’s care team to transfer their prescriptions on their behalf.

    GLP-1 Supply Tracker from Ro. 
    Courtesy: Ro

    Ro leans further into GLP-1s

    Ro, founded as Roman in 2017, has been helping patients treat obesity since 2020. Reitano told CNBC in March that after the FDA approved Wegovy in 2021, patient inquiries about the medication began flooding in by the “tens of thousands.” 
    As a result, the company launched a GLP-1 program called the Ro Body Program early last year.
    Ro can prescribe medications like Ozempic and Wegovy, and it also offers compounded versions of GLP-1s if the branded versions are in shortage. Compounded GLP-1s are custom-made alternatives to brand drugs designed to meet a specific patient’s needs.

    More CNBC health coverage

    Since launching the Body Program, Ro has become all too familiar with the challenges that can arise from a lack of supply. The company temporarily paused advertising for the program because of shortages last year, and it offered refunds and credits to patients who weren’t able to pick up their medication within 30 days of getting a prescription. 
    Reitano said the company made more than 50,000 calls between July and August last year to try to transfer prescriptions to different pharmacies. 
    Reitano hopes the tracker will make it easier for patients and providers to find GLP-1 supply and inform the FDA about shortages in real time, especially as demand for the medications grows even more. 
    But he said his “biggest hope” is that Ro’s supply tracker will become “useless” three years from now as more GLP-1 supply comes onto the market and alleviates shortages. 
    “That’s better for us, it’s better for patients, it’s better for the health-care system as well,” Reitano told CNBC.

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    Abercrombie & Fitch posts its strongest first quarter ever, as sales jump 22%

    Abercrombie & Fitch’s winning streak is still on fire.
    The apparel retailer posted 22% fiscal first-quarter sales growth, far ahead of expectations.
    Abercrombie, which also runs the Hollister banner, has spent the better part of the last decade transforming itself into a retailer that’s nearly unrecognizable from its 2000s heyday.

    An Abercrombie & Fitch signage is seen on a store on Fifth Avenue on August 25, 2022 in New York City. 
    Michael M. Santiago | Getty Images

    Abercrombie & Fitch reported its strongest first quarter in its history on Wednesday, continuing a winning streak that again exceeded expectations.
    The retailer’s sales jumped 22% compared to last year, while profits were nearly seven times higher and came in well ahead of Wall Street’s estimates.

    Shares were up about flat in premarket trading.
    Here’s how the apparel company did in its first fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

    Earnings per share: $2.14 vs. $1.74 expected
    Revenue: $1.02 billion vs. $963.3 million expected

    The company’s reported net income for the three-month period that ended May 4 was $113.9 million, or $2.14 per share, compared with $16.6 million, or 32 cents a share, a year earlier. 
    Sales rose to $1.02 billion, up about 22% from $836 million a year earlier.
    “We successfully navigated seasonal transitions with relevant assortments and compelling marketing, leveraging agile chase capabilities and inventory discipline, driving sales above our expectations,” CEO Fran Horowitz said in a news release. “Growth was broad-based across regions and brands with Abercrombie brands registering 31% growth and Hollister brands delivering growth of 12%.”

    Abercrombie has been one of the biggest winners in retail. As it stares down a tough year of comparisons, the company is building on the double-digit sales growth it saw in 2023.
    The retailer’s comparable sales grew 21%, on top of the 3% growth it saw in the year-ago period. Abercrombie is expecting sales to increase again in the current fiscal year, and increased its revenue guidance.
    For the full year, the retailer now expects sales to grow about 10%, compared to a previous outlook of between 4% and 6%. Analysts had expected growth of about 7%, according to LSEG.
    For the current quarter, Abercrombie anticipates sales will increase by a mid-teens percentage, ahead of estimates of up 9%, according to LSEG.
    Horowitz plans to build on the company’s success by developing its Hollister brand, which accounts for about half of the company’s overall sales, and bringing more categories to its namesake banner. In March the retailer debuted the “A&F Wedding Shop” – a collection of apparel for brides and attendees that can be used not only for the day of but also for other wedding parties, like bachelorette festivities and rehearsals. 
    Pieces in the collection, which include a range of dresses, bikinis, pajamas, skirts and other items, range between $80 and $150. The mid-tier price point for a day that’s typically very costly for many couples gives Abercrombie an in with the value-seeking consumer and a foothold in the overall bridal wear market, which is expected to reach $83.5 billion in the U.S. by 2030, according to ResearchAndMarkets.com. 
    Over the last six years, Abercrombie has been working to transform itself from an exclusionary retailer that used loud branding and shirtless models to drive sales into a company that’s focused on inclusivity and geared towards working millennials. 
    The company’s transformation is years in the making, but began to bear fruit in 2023 when the retailer posted a 16% annual sales gain at the same time the U.S. apparel market shrunk. Its stock surged 285% in 2023 and is up another 73% so far this year as of Tuesday’s close, outpacing the S&P 500’s gains of 11%. 
    Read the full earnings release here.  More

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    Clean Energy Ventures raises $305 million to back early-stage climate startups

    Climate-focused venture capital firm Clean Energy Ventures said Wednesday it raised $305 million for its second fund.
    The fund was oversubscribed amid investor appetite for emissions-reducing technologies.
    Areas of focus for the new fund include industrial decarbonization, plastics and grid-enhancing technologies like virtual power plants.
    Private equity investment in the energy transition is also growing, hitting nearly $30 billion in 2023.

    Solar panels and wind turbines in the Netherlands.
    Daniel Bosma | Moment | Getty Images

    Clean energy stocks may be underperforming in the public market, but there is still great appetite for companies focused on decarbonization in private markets — with Clean Energy Ventures’ new fund serving as the latest example.
    The climate tech firm said Wednesday that it raised $305 million for its second fund, five years after closing its first fund. This latest fund was oversubscribed — the initial target stood at $200 million — but interest from limited partners including The Grantham Foundation, Builders Vision and Carbon Equity led to a higher raise.

    The firm is already putting the new money to work, focusing on technologies that go beyond the traditional green investments of solar and wind.
    Co-founder and managing partner Daniel Goldman identified industrial decarbonization as one compelling vertical — specifically emissions-reducing technology for the cement and steel industries.
    “When you think about where do we need to have material impact, and where are sectors that technology really hasn’t changed for many, many decades, steel and cement rank at the top of the list. So we think there’s huge opportunity there,” he told CNBC.
    Two other areas of interest for the new fund include plastics — both more efficient recycling as well as cost-competitive bioplastic production — and grid-improving technologies for distributed energy, such as virtual power plants.

    Clean Energy Ventures backed 20 companies in its first fund and has already made six investments via its second fund, including Israel-based green ammonia company Nitrofix, as well as sustainable aviation fuel company Oxccu, which is based in the U.K. Clean Energy Ventures is also opening a new office in London, with Goldman calling the European opportunity “really incredible,” while also pointing to opportunities in Israel.

    A lot has changed in the renewable energy landscape since 2019 when Clean Energy Ventures launched its first fund, including the rise – and subsequent fall – of special purpose acquisition companies. During the Covid-era, SPACs proved a popular path for clean energy companies to access public markets. Many have performed poorly since, leading some to argue the enthusiasm around SPACs caused companies to go public that simply weren’t ready.
    But Goldman said the unwind of the SPAC trade and poor performance of publicly traded clean energy stocks hasn’t damaged investor perception around the value of clean energy investing, or the idea that greener investing comes at the expense of returns. Clean Energy Ventures’ limited partners, which include institutional investors, asset managers, family offices and registered financial advisors, are not impact investors — in other words they’re focused on returns.
    None of the companies from Clean Energy Ventures’ first fund have gone public, but the firm views IPOs as a nice to have, rather than a need to have. Goldman said Clean Energy Ventures’ approach has been to instead focus on strategic sales – in other words backing companies developing technologies that a much larger company, say an energy or industrial giant, might be interested in.
    No companies from the first fund have been acquired, although Goldman said there have been interested buyers.

    Elsewhere in private markets, private equity is playing an increasingly important role in energy-transition related deals. According to Mike Collier at financial advisory firm Weaver, private equity-backed energy transition deals jumped to more than $25.9 billion in 2023, up from just $500 million in 2018.
    Private equity plays a critical part because it can be a stepping stone for companies that have outgrown venture capital, but aren’t yet ready for public markets.
    Clean Energy Ventures helps its portfolio companies reach the next stage by partnering with private equity, and Goldman said over the last six months the firm’s seen more interest from that market.
    “I’m not saying they [private equity] are coming in and taking early stage technology risk, but once you have a demonstration – or first of a kind – they’re able to get comfortable with coming in for those follow-on projects, much sooner than was traditionally the case,” he said. More

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    IMF upgrades China’s growth forecast to 5% on ‘strong’ first quarter and policy measures

    The International Monetary Fund raised its forecast Wednesday for China’s growth this year to 5%, from 4.6% previously, due to “strong” first quarter figures and recent policy measures.
    China’s economy grew by a better-than-expected 5.3% in the first quarter, supported by strong exports.
    Recent real estate policy moves are “welcome,” but more comprehensive action is needed, Gita Gopinath, the IMF’s first deputy managing director, said in a statement.

    A worker rides a bicycle past a housing complex under construction in Beijing on May 17, 2024. 
    Jade Gao | Afp | Getty Images

    BEIJING — The International Monetary Fund on Wednesday raised its forecast for China’s growth this year to 5%, from 4.6% previously, due to “strong” first quarter figures and recent policy measures.
    The upgrade followed an IMF visit to China for a regular assessment. The organization now expects China’s economy to grow by 4.5% in 2025, up from the previous forecast of 4.1%.

    But by 2029, they anticipate China’s growth will decelerate to 3.3% due to an aging population and slower productivity growth. That’s down from the IMF’s prior forecast of 3.5% growth in the medium term.
    China’s economy grew by a better-than-expected 5.3% in the first quarter, supported by strong exports. Data for April showed consumer spending remained sluggish, while industrial activity picked up.
    About two weeks ago, Chinese authorities announced sweeping measures to support the struggling real estate sector, including removing the floor on mortgage rates.

    The policy moves are “welcome,” but more comprehensive action is needed, Gita Gopinath, the IMF’s first deputy managing director, said in a statement.
    “The priority should be to mobilize central government resources to protect buyers of pre-sold unfinished homes and accelerate the completion of unfinished presold housing, paving the way for resolving insolvent developers,” she said.

    “Allowing for greater price flexibility, while monitoring and mitigating potential macro-financial spillovers, can further stimulate housing demand and help restore equilibrium.”
    The IMF release said that during her visit to China this month, Gopinath met with People’s Bank of China Governor Pan Gongsheng, Ministry of Finance Vice Minister Liao Min, Ministry of Commerce Vice Minister Wang Shouwen, PBOC Deputy Governor Xuan Changneng, National Financial Regulatory Administration Vice Chairman Xiao Yuanqi.
    “Near-term macroeconomic policies should be geared to support domestic demand and mitigate downside risks,” Gopinath said.
    “Achieving high-quality growth will require structural reforms to counter headwinds and address underlying imbalances,” she added.
    In a meeting Monday, Chinese President Xi Jinping stressed the need to promote “high-quality, sufficient employment,” according to state media.
    “Xi specifically stressed improving employment support policies for college graduates and other young people,” Xinhua reported. More

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    Chinese travelers are opting for lower-cost domestic destinations over foreign tourist spots

    Only 14% of high-income households that traveled internationally last year would go abroad again in 2024, according to a survey released this month by consulting firm Oliver Wyman.
    Local governments outside China’s big cities have been stepping up their efforts to attract tourists, primarily through social media.
    Within mainland China, smaller cities such as Yangzhou, Luoyang, Qinhuangdao, Guilin and Zibo saw the fastest growth in tourism bookings during the May holiday, Oliver Wyman said.

    A night in China’s Guizhou province at the Cliff Hotel, pictured here, starts around $83, according to Trip.com, which says the hotel was built in 2023 with 34 rooms.
    Nurphoto | Nurphoto | Getty Images

    BEIJING — Chinese travelers are increasingly opting for cheaper domestic destinations over foreign tourist spots.
    Only 14% of high-income households that traveled internationally last year plan to go abroad again in 2024, according to a survey released this month by consulting firm Oliver Wyman. The segment covers families in mainland China earning at least 30,000 yuan a month ($4,140, or about $50,000 a year).

    The top reason for preferring their home country was “abundant domestic travel options,” the survey found, followed by “too costly” international travel.
    The average cost per person for traveling within mainland China is less than 1,000 yuan, versus several thousand yuan for a trip to Hong Kong or Japan, Oliver Wyman said.
    Local tourism has been a bright spot in China’s recovery from Covid-19 controls that ended in late 2022. Travel booking site Trip.com said that in 2023, bookings for rural destinations in China grew by 2.6 times versus pre-pandemic levels.

    During a public holiday this year from May 1 to May 5, domestic tourism trips and revenue surged versus pre-pandemic levels in 2019, official data showed. International trips were slightly below 2019 levels, according to CNBC analysis of official figures.
    Within mainland China, smaller cities such as Yangzhou, Luoyang, Qinhuangdao, Guilin and Zibo saw the fastest growth in tourism bookings during the May holiday, Oliver Wyman said.

    “This year, domestic tourism will surpass pre-pandemic levels,” said Ashley Dudarenok, founder of China digital consultancy ChoZan.
    She expects recovery in Chinese traveling internationally to take longer, partly as “the feeling that the rest of the world is mad and unsafe is even higher than in 2023.”
    In contrast, a record number of people in the U.S. in the last two years have applied for passports to travel abroad. A Skyscanner report said 85% of U.S. travelers plan to take at least as many international trips this year as in 2023, if not more.
    U.S. and Chinese officials held a summit in Xi’an city last week to promote tourism between the two countries.

    The moment you go viral you will have thousands of tourists at your doorsteps.

    Ashley Dudarenok
    ChoZan, founder

    It’s unclear as to what extent tourist interest in less developed parts of China will persist, and whether it will translate into sustainable growth. But the near-term impact on some localities is significant.
    The southern Guangxi autonomous region, home to Guilin’s famous limestone hills, issued a plan for boosting consumption this year by increasing publicity and tourist subsidies.
    In the first quarter, officials said the region’s tourism revenue rose by nearly 24% year on year to 258.18 billion yuan. Local authorities said performing arts subsidies from the local governments helped generate 48.3 million yuan in ticket sales to 230,000 people, stimulating about 460 million yuan in economic activity.
    About 2.5-hour-long flight to the east of Guangxi is the Nanjing city wall tourist site. It received nearly 1.3 million visitors in the first quarter, generating a revenue of 19.2 million yuan — double that of 2019, according to local media.

    Competition for media eyeballs

    Local governments outside China’s big cities have been stepping up their efforts to attract tourists, primarily through social media.
    Guangxi officials earlier this month said its promotional videos on apps such as ByteDance’s Douyin and Xiaohongshu, known in English as “Little Red Book” or “Red,” had millions of viewers.
    “They try to go viral, they try to involve their community, cultural heritage, put it all online,” Dudarenok said. “The moment you go viral you will have thousands of tourists at your doorsteps.”
    People have flocked to the town of Zibo in the eastern province of Shandong after its barbecue skewer culture took off on social media last year. Similarly, three million visitors poured into Harbin city over the three-day New Year’s Eve holiday after its ice sculptures and unique northern customs gained traction on social media.
    TV Shows featuring specific regions have also helped boost tourism.
    Thanks to a television drama set in Altay, the remote part of Xinjiang province in the far west saw a nearly 38% surge in visitors from a year ago during the first three days of this year’s May holiday, according to iQiyi, which released the mini-series.
    “The TV shows are a great draw,” Dudarenok said, adding that “food is always the most important reason for Chinese tourists to travel.”
    China’s expansive network of high-speed trains and flights has made it easier for people to visit small towns, even for just two or three days.
    Domestic air ticket bookings on Trip.com surged by 30% in the first quarter from a year ago, the company said last week. It noted that Chinese consumers are now placing greater emphasis on “emotional fulfillment,” prompting interest in personalized trips.
    “Intensifying marketing efforts in many provinces effectively encouraged travelers to explore diverse destinations,” Trip.com management said on its earnings call, according to a FactSet transcript.
    Businesses and local governments are collaborating in other ways to boost attention, if not revenue.
    Officials from tourist spots and local governments have reached out to Miss Tourism Asia pageant for promotions, said Yang Hua, president of the organizing committee.
    “Right now, China’s domestic tourism industry is relatively scattered,” Yang said in Mandarin, translated by CNBC. He hopes to create destination-specific events for cities that can attract visitors for the next several years.
    Miss Tourism Asia filmed a promotional fashion video last year of contestants in the desert around Xinjiang’s Aral city, and held the pageant’s finals on Jan. 1, 2024, in the southern city of Dongguan in Guangzhou province.
    Chinese consumers’ current preference for domestic travel means that a full recovery in international travel to 2019 levels likely won’t come until late 2025, half a year later than previously forecast, according to Oliver Wyman.
    In the longer-term, Dudarenok expects that international tourist destinations will need to upgrade their experience to match the rise of stylish, modern hotels and other travel services in China.
    “Chinese tourists [are] not so easy to please,” she said.
    — CNBC’s Greg Iacurci and Yulia Jiang contributed to this report. More

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    American Airlines cuts outlook, says chief commercial officer is leaving

    American Airlines slashed its sales outlook on Tuesday and now expects unit revenues to fall as much as 6% in the second quarter from a year earlier.
    The company has also let go of its chief commercial officer, Vasu Raja.
    The airline has trailed rivals Delta and United in recent months.

    American Airlines passenger jets are lined up at the gates at Ronald Reagan Washington National Airport in Arlington, Virginia, on Feb. 10, 2024.
    J. David Ake | Getty Images

    American Airlines slashed its sales outlook on Tuesday. The company has also let go of its chief commercial officer, Vasu Raja. He will leave his position next month.
    American Airlines said it expects unit revenues to fall as much as 6% in the second quarter from a year earlier, down from a previous forecast of a decline of no more than 3%. The carrier also trimmed its adjusted earnings estimate for the period to a projected range of $1 to $1.15 a share, down from a prior range of $1.15 to $1.45 a share.

    The airline has trailed rivals Delta and United Airlines in recent months in financial performance. United Airlines later on Tuesday reiterated its expectation to earn an adjusted $3.75 to $4.25 per share in the second quarter.
    Executives from both carriers will present at a Bernstein conference Wednesday morning. American Airlines CEO Robert Isom plans to discuss the carrier’s plan to modify its ticket distribution strategy in favor of driving bookings to its own platforms instead of third-party channels and agencies.
    When asked during an April earnings call whether American Airlines had been receiving pushback from corporate customers while rivals reported strong business travel growth, Isom admitted that the carrier could have to make changes to the system.
    “Look, we’ve got some fine-tuning to do,” Isom said during the April call. “No doubt the objective here is … to hang on to all the cost savings and then also to make sure that we maximize revenue production. As we take a look at the first quarter, there’s quite likely some benefit that our competitors received because of some of … the changes that we’ve made.”
    Raja, just more than two years into his role as commercial head, had been on leave recently, and a spokeswoman for the carrier said last week that he was not leaving the company. That changed after internal discussions in the past few days, according to a person familiar with the matter.

    He previously served as chief revenue officer and headed American Airlines’ network and alliances departments.
    Raja did not immediately respond to CNBC’s request for comment.

    Read more CNBC airline news

    Correction: This story has been updated to correct Vasu Raja’s title. More

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    Starbucks is set to resume union negotiations as it confronts issues at its stores

    Starbucks and Workers United will resume bargaining talks this week after a successful two-day session last month.
    After its most recent earnings report, CEO Laxman Narasimhan admitted Starbucks was seeing a more cautious consumer when it came to spending, but also mentioned the need to make improvements to stores.
    Workers United is pushing for better pay and benefits as well as improved staffing and scheduling.

    When Starbucks and its baristas union resume contract bargaining this week, workers may have renewed momentum at their backs — courtesy of the company’s own CEO.
    The coffee giant last month found itself reporting an objectively challenging quarter. U.S. same-store sales fell 3% and traffic dropped 7%. As a result, the company cut its 2024 forecast.

    CEO Laxman Narasimhan admitted Starbucks was seeing a more cautious consumer when it came to spending, but also mentioned the need to make improvements to stores as the company saw troubling trends. Starbucks reported rates of incomplete mobile app orders in the mid-teens and said occasional customers came in less.
    Narasimhan, in prepared remarks to Wall Street analysts, cited some of the challenges that union workers have been highlighting in their bid for better working conditions.
    “Specifically in our U.S. stores, we’re focused on creating a more stable environment for partners through investments in equipment innovation, process improvements, staffing, scheduling and waste reduction, all things our partners value and prioritize creating a more satisfying work environment in our stores while de-risking our business,” Narasimhan said on a call with analysts.
    He added in an interview with CNBC’s “Squawk on the Street” that throughput has improved, and said the company’s action plan will continue to build on that momentum with improvements to stores and better communication of value.
    “We have improved speed of service quarter over quarter. If you look at the processes that we are rolling out, particularly around peak, what we are finding is that we have opportunities to improve that even further with changes in processes and tools that we provide to partners at peak,” Narasimhan said.

    For Workers United, the union behind the Starbucks organizing, his admission that more could be done was promising.

    Staffing challenges

    The organizing efforts began nearly three years ago in Buffalo, New York, under then-CEO Kevin Johnson. At the time, Starbucks was a company long known for progressive benefits for workers.
    But baristas, emboldened by the experience they had during the Covid-19 pandemic, pushed for changes in the company’s cafes. More than 430 unionized stores and two chief executives later, the two sides have made “significant progress” in contract bargaining, striking a more optimistic tone after a successful two-day session last month.
    Starbucks and the union are meeting to continue working on the framework that will inform every single-store contract moving ahead.
    “I do believe that we are seeing the company at this point acknowledge that there are issues, significant issues,” Michelle Eisen, a Workers United delegate and original member of the company’s first organized union in Buffalo, told CNBC ahead of negotiations.

    People picket outside of a Starbucks store in New York’s East Village on Nov. 16, 2023.
    Spencer Platt | Getty Images

    “We heard Narasimhan make that statement after the earnings call that they’re aware that stores have experienced staffing issues,” said Eisen, who has been with the company for more than a decade and is among 150 delegates attending in-person bargaining sessions with Starbucks on behalf of the union.
    “I think this is a new world right now to be able to say that the CEO has stepped up and said, ‘Look, we’ve got some problems, we know we’ve got some problems, we want to work towards fixing those problems,'” Eisen said. “And as a worker at a unionized location, with proposals on the table to help solve these issues, that’s exactly what I want to hear.”
    In internal surveys and in bargaining committee meetings, union-represented partners consistently rank “staffing and scheduling” as their highest priority issue. The vast majority of represented partners report frequently working short-staffed, and a simple majority of partners report that they are getting scheduled for fewer hours than they want or need.
    The union has also pushed for better pay and benefits.
    Starbucks says it has made significant progress over the past two years on staffing and scheduling. An advanced staffing model is able to take into account both historical trends of allocated hours per store, but also current trends, available product types and upcoming promotions, the company said. Starbucks says its data affirms partners now get more hours and that partner retention and sentiment have both increased across the U.S. as schedules become more stable and consistent.

    Orders up

    Staffing improvements are likely to be even more important as Starbucks projects an increase in traffic and orders.
    In July, Starbucks plans to open up its mobile order and pay app to nonrewards members in a bid to win back its occasional customer base. This will create the ability to target all customers with new products and promotions in an effort to grow traffic.
    It is also due to introduce what it is calling the Siren System: new equipment and protocol to address customer ticket times. The Siren System includes a custom ice dispenser, milk-dispensing system and faster blenders to reduce steps for baristas and get drinks to customers faster. It will reach 1,000 stores in July.
    “It’s a terrible feeling to be on that floor and to pull a sticker and to look at the time and then look up at the clock on the wall and realize, you’re already 8 minutes behind,” Eisen said of mobile orders.
    “Eight minutes doesn’t sound like a lot. But when you’re producing 100 transactions per half hour … and you realize you’re probably backed up 20 drinks, it’s a bad feeling,” she said.
    There has been another call for change at Starbucks stores that may carry weight at the negotiating table. Former Starbucks CEO Howard Schultz in a LinkedIn post after the company’s earnings report said management needs to spend more time with workers to understand ongoing challenges.
    It was the third time he has publicly weighed in on Starbucks and its operations since leaving the company and its board last year. It was a notable shift in tone from when Schultz returned to the company in 2022 to respond to the union challenge, with a far more combative attitude.
    Narasimhan was mentored by Schultz for six months before taking the helm at the company, and he spent time in stores with baristas, even earning his barista certification before becoming CEO in 2023.
    “I have emphasized that the company’s fix needs to begin at home: U.S. operations are the primary reason for the company’s fall from grace,” Schultz said. “The stores require a maniacal focus on the customer experience, through the eyes of a merchant. The answer does not lie in data, but in the stores.”
    At the time, the coffee giant said in response, “We always appreciate Howard’s perspective. The challenges and opportunities he highlights are ones we are focused on. And like Howard, we are confident in Starbucks’ long-term success.”

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    Stock trade settlement moves to single day as GameStop mania underscores need for faster transactions

    Starting Tuesday, trades of stocks and several other securities will need to be settled by the end of the next business day.
    For most retail traders, the change is expected to be seamless.
    The change comes after the GameStop mania in 2021 put the settlement process under closer scrutiny.

    The New York Stock Exchange in New York, March 28, 2023.
    Victor J. Blue | Bloomberg | Getty Images

    Years of work on Wall Street to pick up the pace of trading will be put to the test this week. If all goes well, most people won’t notice the difference.
    Starting Tuesday, trades of stocks and several other securities will need to be settled by the end of the next business day. Settlement involves the actual swap of money for a security. This so-called T+1 settlement accelerates the previous process that allotted two business days.

    The move is the latest evolution to make the plumbing of Wall Street look more like the front end, which is increasingly moving toward trading apps and around-the-clock markets.
    “For everyday investors who sell their stock on a Monday, shortening the settlement cycle will allow them to get their money on Tuesday. Shortening the settlement cycle also will help the markets because time is money and time is risk. It will make our market plumbing more resilient, timely, and orderly,” Securities and Exchange Commission Chair Gary Gensler said in a statement on May 21.
    For most retail traders, the change is expected to be seamless. As physical paper versions of equity shares are all but extinct, most brokerage firms handle settlement automatically for their customers.
    It could be trickier for large dollar trades and funds, especially those that hold international stocks since not all markets are aligned on settlement time frame.
    “When you start talking about larger trades, block liquidity, that’s where you may see the movements in cost depending on the product, depending on the underlying market,” said Tim Huver, managing director at investment bank Brown Brothers Harriman.

    This is not the first time that the SEC has shortened settlement time on trades, with the move to T+2 from T+3 happening in 2017. The SEC officially adopted the change to T+1 in February, though many industry experts had long expected the move.
    The latest change comes after the GameStop mania in 2021 put the settlement process under closer scrutiny. The wild swings in so-called meme stocks meant that the agreed-upon price for trades was significantly different from the market price when the trade was actually settled. Additionally, there were increased instances of “failure to deliver,” or trades where settlement did not occur, during that period.
    The excitement around GameStop and other meme stocks has had a resurgence in 2024. Shares of the video game retailer surged on Tuesday after disclosing that it had raised more than $900 million through an additional stock sale.

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