Raphael Stevens

Peloton’s took a $182 million hit in its previous fiscal quarter as inventory levels ballooned and consumer demand for its bikes and treadmills waned.
During the three-month period ended March 31, Peloton identified various factors that indicated a “triggering event” for an impairment charge, it said in an SEC filing.
Those factors were softening demand, higher costs of inventory and logistics, and a sustained decrease in the company’s stock price, Peloton said in the filing.

A Peloton stationary bike for sale at the company’s showroom in Dedham, Massachusetts, U.S., on Wednesday, Feb. 3, 2021.
Adam Glanzman | Bloomberg | Getty Images

Peloton’s goodwill took a $182 million hit in its previous fiscal quarter as inventory levels ballooned and consumer demand for its bikes and treadmills waned.
During the three-month period ended March 31, Peloton identified various factors that indicated a “triggering event” for an impairment charge, the company said in a Tuesday 10-Q filing with the Securities and Exchange Commission. The charge was entirely related to its connected fitness products.

Those factors were softening demand, higher costs of inventory and logistics and a sustained decrease in the company’s stock price, Peloton said in the filing. The company’s market cap has fallen to about $4.5 billion from a high of about $50 billion early last year.
Peloton’s losses in the latest quarter mounted to $757.1 million, compared with a loss of $8.6 million a year earlier, the company reported on Tuesday morning.
Sales tumbled 24% to $964.3 million, marking Peloton’s first year-over-year revenue decline since it went public in 2019.
Peloton, which is now run by Chief Executive Officer Barry McCarthy, offered up a weaker-than-anticipated outlook for its current quarter that ends on June 1, saying that demand could continue to be soft in the near term.
As demand dropped off from a pandemic peak, Peloton’s inventories grew sizably during the latest period to total $1.4 billion on the company’s balance sheet, compared with $937.1 million a year earlier. That was almost entirely made up of finished products that are either sitting in warehouses or in transit to be received by the company, Peloton said in it 10-Q filing.

CNBC reported in late January that Peloton was planning to temporarily halt production of some of its equipment in order to reset inventory levels. Then-CEO and co-founder John Foley responded by saying Peloton needed to “right-size” production levels.
McCarthy, the new CEO, said Tuesday that Peloton hasn’t made “quite as much progress in right-sizing production” as it needs to.
He said the company’s supply chain team, now led by Andrew Rendich, had been working closely with partners on ordering parts that have longer lead times.
Peloton has been able to cut its commitments to third-party suppliers from about $550 million as of Dec. 31, to between $120 million and $280 million, the company said in its 10-Q filing.

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Toyota Motor on Wednesday warned investors that “unprecedented” increases in materials and logistics costs could cut the company’s full-year profit by as much as 20%.
The Japanese automaker said it expects materials costs to more than double from to 1.45 trillion yen, or about $11.1 billion, in its fiscal year that started in April.
Toyota is the latest automaker to warn of rising costs.

Toyota 2023 Sequoia on display at the New York Auto Show, April 13, 2022.
Scott Mlyn | CNBC

Toyota Motor on Wednesday warned investors that “unprecedented” increases in materials and logistics costs could cut the company’s full-year profit by as much as 20%.
The Japanese automaker said it expects materials costs to more than double to 1.45 trillion yen, or about $11.1 billion, in its fiscal year that started in April. Toyota said it plans to offset about 300 billion yen, about $2.3 billion, of those year-over-year increases through “cost reduction efforts.”

The global automotive industry has been battling supply chain problems for roughly a year and a half. A global shortage of semiconductor chips has sporadically shuttered factories and caused significant reductions in vehicle volumes.
Toyota was able to navigate the supply shortages better than some other automakers during the early days of the chip shortage, but higher inflation, increased costs and additional supply chain problems have added up.
Covid-19 continues to be a problem as well. Toyota on Tuesday said it would suspend operations on 14 lines at eight domestic factories for up to six days in May due to lockdowns occurring in China.
Toyota expects its operating profit to slip to 2.40 trillion yen ($19.7 billion) for the current fiscal year, down from 3 trillion yen ($22.9 billion) in its last fiscal year that ended in March. It also forecast net income to fall by 20% to 2.26 billion yen ($18.5 billion), despite expectations of record global retail sales during that time.
“It is very unprecedented,” Toyota Chief Financial Officer Kenta Kon said Wednesday about the raw materials costs.

Kon said the company is working internally and with its suppliers to cut costs as much as possible to avoid “simply raising the prices” of its vehicles for consumers. He said that could include using fewer raw materials or switching to lower-priced parts.
“We have a sense of crisis, and we do realize we have to continue these efforts,” Kon said.
Toyota is the latest automaker to warn of rising costs. Tesla CEO Elon Musk has blamed inflation in raising the prices of its electric vehicles. General Motors and Ford Motor also have warned of significant cost increases this year.
Ford said it largely expects its pricing power, combined with an expected increase in production, to offset $4 billion in raw material headwinds. The automaker previously forecast those headwinds at $1.5 billion to $2 billion. It’s a similar story at GM, which last month doubled its forecast commodity costs to $5 billion in 2022.

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General Motors’ newest Cadillac Escalade will be the most powerful and expensive version of the full-size SUV ever.
The 2023 Cadillac Escalade-V will start at about $150,000 when it goes on sale this summer with a supercharged 6.2-liter V-8 engine that delivers 682 horsepower and 653 foot-pounds of torque.
Automakers have increasingly added performance variants to their lineups as a way to beef up profit margins before they transition more to electric vehicles.

2023 Cadillac Escalade V-Series

DETROIT — General Motors’ newest Cadillac Escalade will be the most powerful and expensive version of the full-size SUV ever when it goes on sale this summer, starting at about $150,000.
The Detroit automaker unveiled the 2023 Cadillac Escalade-V on Wednesday with a supercharged 6.2-liter V-8 engine that delivers 682 horsepower and 653 foot-pounds of torque. That’s a significant performance improvement over the 420 horsepower and 460 foot-pounds of torque of the SUV’s current V-8 engine.

“There is nothing like this in the industry,” said David Schiavone, global product manager of the Cadillac Escalade, during a media briefing. “It will be the most exclusive and expensive Escalade ever.”
Schiavone declined to disclose how many Escalade-V models the company expects to produce a year. However, given its performance and $149,990 starting price, production will likely be low but highly profitable. The price is nearly double the Escalade entry-level model, at about $76,300.

2023 Cadillac Escalade-V

Automakers have increasingly added performance variants to their lineups as a way to beef up profit margins before they transition toward electric vehicles, which can offer high performance but lower margins than gas-powered cars.
GM’s new V-Series, previewed earlier this year, resembles current Escalade SUVs but includes new badging and parts to improve the performance of the vehicle. Cadillac says the vehicle can achieve 0-60 mph in about 4.4 seconds, an impressive time for a full-size luxury SUV.
The vehicle features the Escalade’s most expensive interior option, which includes leather seating, power massaging front seats, an AKG Studio Reference 36-speaker sound system, 38 inches of OLED information and control screens and Zebra Wood accents.

Cadillac’s “V” or “V-Series” designation has traditionally been used for low-production performance cars. The Escalade is the first SUV to receive the badging, as GM attempts to squeeze as much profit as possible from current vehicles with internal combustion engines to assist in funding new electric vehicles and technologies.

2023 Cadillac Escalade V-Series

Cadillac has said it plans to exclusively offer electric vehicles by the end of this decade, beginning with the recently launched Lyriq crossover. The effort is part of GM’s overall plan to only offer EVs globally by 2035.
Schiavone said the brand is still on track to meet its EV goals, but it will continue to offer gas models until then. He declined to say whether the Escalade-V would be the last major change for the vehicle ahead of expectations that it would become an EV.
“Cadillac is committed to a total EV future,” Schiavone said. “That is already starting, but it doesn’t happen today. You will see both EV and ICE engines for several years until we’re to our full EV future.”

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Southwest Airlines said it will spend more than $2 billion on improved passenger amenities.
Planned improvements include bigger overhead bins and faster Wi-Fi.
Southwest plans to offer new in-seat power so passengers can charge their devices.

OntheRunPhoto | iStock Editorial | Getty Images

Southwest Airlines said it will spend more than $2 billion on improved passenger amenities like bigger overhead bins, faster internet and power outlets “in every seat,” in an effort to woo travelers as bookings rebound.
The airline also plans to double the number of movies it offers travelers and to update its drink options on board to include bloody mary mix, ready-to-drink cocktails, hard seltzer and rose wine.

The changes come as airlines gear up for a recovery in both leisure and business travel after more than two years of the Covid-19 pandemic.
United Airlines, for example, announced last year a host of cabin upgrades like new seatback screens and entertainment systems. It, too, is preparing cabins for larger overhead bins. Delta Air Lines is installing new seats for domestic first class and has said it aims to offer free internet in the future. And Hawaiian Airlines plans to offer complimentary Wi-Fi through SpaceX’s Starlink service as early as next year.
Southwest’s $2 billion investment will span five years and is part of an estimated capital expenditure of $3.5 billion per year on average through 2026, as announced in December. The changes are geared toward all customers, but Southwest has recently increased its efforts to sell to business travelers.
The airline in March announced a new, second-cheapest fare option for travelers willing to pay more for more flexibility. Last week, it told staff it will temporarily offer travelers free Wi-Fi on some flights as it tests new hardware that aims to bring higher speeds to more passengers, CNBC reported.
The carrier also said it recently entered into an agreement with satellite internet provider Viasat for in-flight connectivity as early as this fall, starting with new deliveries of 737 Max planes. Southwest offers internet for $8 a day and doesn’t currently have plans to make the access free beyond the hardware test.
Southwest, which has a fleet of more than 700 Boeing 737s, estimates it will have in-seat power, something it currently doesn’t offer, on about 250 planes by the end of 2023. The power outlets will be available starting early next year on Max planes and feature USB A and USB C power ports.

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Target employees at a store in Virginia filed on Tuesday with the National Labor Relations Board for a union election.
Other companies, from Starbucks to Amazon, have also faced a push by employees to seek union representation.
The organizing effort has even caught the attention and support of the White House.

A worker delivers an order to a drive up customer at a Target store on August 19, 2020 in Miami, Florida.
Joe Raedle | Getty Images

Target has joined the growing list of major companies where employees are trying to form a union.
Employees at a Virginia store filed on Tuesday with the National Labor Relations Board for a union election. The workers are seeking collective bargaining and get representation through the New River Valley General Membership Branch of the Industrial Workers of the World.

Workers who filed for the election are at a Target store in Christiansburg, a town on the far west side of the state that’s about 8 miles south of Virginia Tech University. The location has 100 employees, according to the petition filed with the NLRB.
Target said in a statement Wednesday that it has been investing in its workforce, with a starting wage range of between $15 to $24 per hour, health care benefits and a program that covers the cost of some associate and undergraduate degrees.
“At Target, our team members are at the heart of our strategy and success, and we have a deep commitment to listening to our team and creating an environment of mutual trust where every team member’s voice matters,” it said.
The NLRB filing was first reported by The New Republic.
Across the country, companies have seen a spike in union activity this year. Workers at major consumer brands from Starbucks to Apple have filed for union elections. Amazon employees in Staten Island notched a historic victory in early April, when they voted for the company’s first unionized warehouse in the U.S. More than 250 Starbucks locations have filed petitions, and 64 company-owned Starbucks stores have voted to unionize, as of Tuesday.

The organizing effort has even caught the attention and support of President Joe Biden. He met last week with national labor leaders, including an organizer helping the Starbucks union push. The coffee shop chain criticized the meeting and asked for its visit with the White House.
Walmart, the nation’s largest retailer, is not unionized and has fought off organizing efforts for decades. Kroger, a grocery chain that competes with Walmart and Target, has long had thousands of employees represented by the United Food and Commercial Workers International Union.
-CNBC reporter Amelia Lucas contributed to this story.

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Despite fears of outliving savings, most Americans still want to live longer, with nearly 70% hoping to reach age 100, according to a study from Edward Jones and Age Wave.
While many older Americans view their parents’ golden years as a time for “rest and relaxation,” they see their own retirement as a “new chapter in life.”
However, it’s critical to start planning early for finances, purpose, family and health, the report shows.

Getty Images

Despite fears of outliving savings, most Americans still want to live longer, a study on longevity and retirement shows.
Nearly 70% of Americans want to live to age 100, with 29 years as the “ideal length” for retirement, according to an Edward Jones and Age Wave report that polled 11,000 adults in the U.S. and Canada in January and February.

“We’ve been aware of longevity rising for some time,” said Ken Dychtwald, founder and CEO of Age Wave. “But in the last year, there’s been a lot more talk about it.” 
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While the U.S. life expectancy dropped by 1.5 years, to about age 77, in 2020 due to the Covid-19 pandemic, scientists expect it to rise in the coming decades, Dychtwald said. 
“That could very well add another five or 10 or more years to the average life expectancy,” he said. “But the problem is we don’t live those years with abundant health.”  
On average, Americans spend the last 12 or more years grappling with illness, injury or cognitive impairment, with 88% of those 65 and older managing at least one chronic condition, the study shows.

What’s more, the average couple may need an estimated $445,000 to cover yearly medical expenses and long-term care, for which most retirees aren’t prepared, Dychtwald said.  

Three-legged stool 

In a shift from previous generations’ experiences, the so-called three-legged stool of retirement income — Social Security, pensions and savings — has become less common among today’s retirees.
Despite ongoing threats to Social Security and fewer pensions, many Americans still aren’t saving enough, the study shows. Most don’t maximize retirement savings, many take penalized distributions from retirement plans and 22% of eligible employees don’t contribute. 
On average, retirees began saving for their golden years at age 38 but wish they had started at 28, according to the survey. 
When asked about the purpose of retirement funds, “people talk about security for the unexpected and freedom,” Dychtwald said. 

A new chapter in life

While many older Americans view their parents’ golden years as having been a time for “rest and relaxation,” they see their own retirement as a “new chapter in life,” the report uncovered.  
Today’s retirees see their next phase as a time to explore possibilities, with many reinventing themselves, explained Mona Mahajan, senior investment strategist with Edward Jones. 
“There’s really an interesting dichotomy between the old generation and new generation,” she said.

Early and holistic preparation across the four pillars can have a really big payoff.

Ken Dychtwald
founder and CEO of Age Wave

Moreover, there may not be a clear line dividing their career and retirement years, with many older Americans continuing to work.
Nearly 60% of older Americans expect to be working in some capacity, whether it’s full-time, part-time or cycling between work and leisure, the findings show. 
However, the most successful retirees took steps decades in advance to prepare for what the report describes as “four pillars” of retirement — finances, purpose, family and health.
“Early and holistic preparation across the four pillars can have a really big payoff,” Dychtwald said.

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Marlboro-maker Philip Morris International confirmed Wednesday a $16 billion bid to buy rival Swedish Match as part of its accelerated push into smoke-free tobacco alternatives.
Swedish Match was trading at a 32% premium Wednesday since talks between the two companies were first announced Friday.
It is the latest move Philip Morris International to diversify beyond traditional, tobacco-based revenue streams.

Swedish Match generates most of its profit from Swedish-style smoke-free tobacco snuffs, also known as ‘snus.’
Olivier Morin | Afp | Getty Images

Marlboro-maker Philip Morris International confirmed Wednesday a $16 billion bid to buy rival Swedish Match as part of its accelerated push into smoke-free tobacco alternatives.
Shares of Stockholm-based manufacturer hit a record high in early trade after its board agreed to the 161.2 billion krona cash offer from the U.S.-Swiss tobacco giant.

Swedish Match is now trading at a 32% premium since talks between the two companies were first announced Friday. Following a bumpy ride since Friday, Philip Morris International stock is trading marginally higher.
The deal, which is now subject to shareholder approval, marks the latest phase in Philip Morris International’s ongoing efforts to reduce its reliance on traditional cigarettes amid growing public scrutiny.

A market-leader in smoke-free ‘snus’

107-year-old Swedish Match is primarily known for producing traditional Swedish-style snuffs, branded “General Snus,” a type of smoke-free tobacco pouch which is placed between the upper lip and gum as an alternative to smoking.
While illegal in the EU over health concerns, Swedish Match’s General Snus were granted authorization by the U.S. Food and Drug Administration in 2019 after they found to present lower risks of “mouth cancer, heart disease [and] lung cancer” than cigarettes.
Still, the FDA noted at the time that such products were not implied safe in general, nor were they FDA approved. “All tobacco products are potentially harmful and addictive,” it added.

Philip Morris International’s bid for Stockholm-based Swedish Match forms part of its wider plans to expand beyond traditional cigarettes.
Bloomberg | Bloomberg | Getty Images

Meantime, the company has seen rapid growth in recent years of its newer, tobacco-free nicotine pouches, “Zyn,” amid increasing consumer demand for cigarette alternatives.
In first-quarter earnings released Wednesday, Swedish Match reported a significant uptick in sales and profits from Zyn in the U.S., with deliveries up 35%.
The U.S. now accounts for Swedish Match’s largest market after Scandinavia, and its Zyn pouches dominate in a market flooded by rivals including British American Tobacco PLC and Altria Group, from which Philip Morris International spun off in 2008.

Philip Morris weans itself off cigarettes

Philip Morris International is based in the U.S., but does not sell its products there. Rather, it distributes its products internationally, including Marlboro cigarettes, L&M, Lark and Philip Morris.
With the deal, it aims to regain access to a ready-made distribution network in its ex-owner’s home territory.
It is the latest move by Philip Morris International to diversify beyond traditional, tobacco-based revenue streams. In 2021, it agreed to take over asthma drug develop Vectura Group, and is also responsible for creating the IQOS heated-tobacco system.
As of last year, the company’s smoke-free portfolio accounted for about 29% of its net revenue, or $31.4 billion.
Campaign groups have condemned tobacco giants, which have a long history of denying the health risks of smoking, for advocating themselves as part of the transition to a smoke-free world while also continuing to sell and promote cigarettes globally.
Among Swedish Match’s other smokeless tobacco products are America’s Best Chew, a chewing-tobacco product, and Longhorn, a type of moist snuff brand.
Philip Morris International said completing the offer was conditional on regulatory approval and on no other company making an offer.
However, analysts at Credit Suisse said in a note that potential counterbids look unlikely. Japan Tobacco International has little appetite to enter the U.S. market, it noted, while British American Tobacco and Imperial would be reluctant due to anti-trust concerns in the U.S. and Scandinavia.
—CNBC’s Sam Meredith contributed to this article.

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