Raphael Stevens

Sweetgreen reported mixed results for its first quarter.
Its losses widened, primarily due to a $21 million increase in stock-based compensation.
Revenue climbed 67%, fueled by a 35% increase in same-store sales and a 10% increase in menu prices.

A Sweetgreen banner on the NYSE, November 18, 2021.
Source: NYSE

Sweetgreen on Thursday reported widening losses for its first quarter, but sales jumped 67% as workers returned to their offices and resumed their old lunchtime routines.
Shares of the company rose more than 5% in extended trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Loss per share: 45 cents vs. 41 cents expected
Revenue: $102.6 million vs. $101.5 million expected

The salad chain reported first-quarter net loss of $49.2 million, or 45 cents per share, wider than its net loss of $30 million, or $1.77 per share, a year earlier. Analysts surveyed by Refinitiv were anticipating a loss per share of 41 cents.
Sweetgreen said a $21 million increase in stock-based compensation was the primary reason for its widening losses this quarter. Higher wages and employee bonuses also weighed on the company’s restaurant-level margins, partially offset by its decision to end its old loyalty program.
Net sales rose 67% to $102.6 million, beating expectations of $101.5 million. Digital orders accounted for two-thirds of its quarterly revenue. More than 40% of sales came from Sweetgreen’s own app and website, rather than third parties.
Sweetgreen’s same-store sales climbed 35% in the quarter, after falling 26% a year ago. The chain credited higher customer transactions and menu price increases. The company has raised prices 10% over the last year, but executives said that consumer behavior hasn’t shifted at all.

However, there is one area where customers have changed how they buy Sweetgreen. As workers return to their offices, the most popular day of the week for Sweetgreen purchases has shifted from Monday pre-pandemic to Tuesday, Wednesday and Thursday.
The chain’s average unit volumes, which measures average sales per location, increased to $2.8 million in the quarter. A year ago, the metric fell to $2.1 million. This quarter’s average unit volumes surpass pre-pandemic levels, according to CFO Mitch Reback.
Co-founder and CEO Jonathan Neman touted the successful test of a new loyalty program, called Sweetpass. Customers involved in the pilot doubled the frequency of their visits and tripled their spending on Sweetgreen’s salads and warm bowls. The program costs $10 a month but gives users a $3 credit on every purchase worth at least $9.95.
Sweetgreen reiterated its forecast for 2022, predicting revenue of $515 million to $535 million and same-store sales growth of 20% to 26%.It also expects to open at least 35 net new locations.
“We’re seeing nothing recently that would cause us to change our guidance,” Reback told analysts on the conference call.
Other restaurant companies, such as Starbucks and Taco Bell owner Yum Brands, pulled their outlooks this quarter, citing inflation and conditions in select international markets. Reback said external factors have caused some concerns, but the chain’s strong performance this quarter led the company to reiterate its full-year forecast.
Read the company’s earnings release here.

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A consortium including ex-Disney CEO Bob Iger, sports agent Rich Paul, eBay and the Chernin Group are taking a 25% stake in toy maker Funko.
As part of the investment, eBay and Funko agreed to make eBay the preferred secondary market for Funko products.

Sarah Whitten

A consortium including former Disney CEO Bob Iger, sports agent Rich Paul, eBay and the Chernin Group is buying a 25% stake in toy maker Funko.
The investment, which is worth $263 million, or $21 per share, means Chernin will add two directors to Funko’s board. Chernin Group CEO Peter Chernin and Iger will serve as advisors to the board.

Shares of Funko were initially halted on the news, but have since resumed trading after hours, jumping more than 20% to around $21 per share.
“We believe Funko is significantly undervalued in the public markets and at this highly attractive entry price provides a runway of opportunity and growth potential,” Chernin said in a statement Thursday. “There are many areas of identifiable growth across content, commerce, marketplaces, consumer products and technology that should drive substantial increases to Funko’s performance.”
In addition to his investment business, Chernin produces television and films through Chernin Entertainment, which launched titles such as “New Girl,” “Hidden Figures,” “The Greatest Showman” and “Ford v Ferrari.” Previously, he served as president and COO of News Corp and chair and CEO of the Fox Group, where he helped greenlight “Titanic” and “Avatar,” two of the highest-grossing films of all time.
Iger is well-known in the entertainment industry for leading the charge at Disney to acquire Pixar, Marvel, Lucasfilm and, most recently, 20th Century Fox. Many of the characters from franchises within these brands can be found as part of Funko’s product line.
Paul, CEO and founder of Klutch Sports Group and head of sports at United Talent Agency, is expected to bring his expertise in the sports and music sectors to help advance Funko’s product expansion in those areas. He represents LeBron James.

As part of the investment, eBay and Funko agreed to make eBay the preferred secondary market for Funko products. They will also team up for exclusive product releases.
“Funko sits at the intersection of pop culture, passion and collectibles, with one of the most engaged communities of enthusiasts,” said Stefanie Jay, eBay chief business and strategy officer, in a statement. “Building on the incredible appetite for Funko products on eBay, we look forward to what our companies can do together.”

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Formula 1’s CEO Stefano Domenicali is shopping around its success with potential media partners for a more lucrative U.S. media deal.
The racing league’s current deal with ESPN expires at the end of 2022.
The sport’s recent surge in the U.S. is in large part powered by the Netflix docuseries “Drive to Survive,” which has been renewed for a fifth and sixth season.

Formula 1 is riding a wave of popularity in the U.S., and its CEO is shopping around its success with potential media partners for a more lucrative U.S. media deal.
The racing league’s current deal with ESPN expires at the end of 2022. It was extended in 2019 to the tune of $5 million per year. Sports Business Journal reported the league, which is owned by Liberty Media, is seeking as much as $75 million a year for its next TV rights deal.

Formula 1 Group CEO Stefano Domenicali declined to specify which potential partners the league is speaking to, or how much the league is seeking, but he told CNBC he sees “great opportunity” in the negotiations and expects the next deal to “build on” the ESPN fees.
“We need to be respectful for the fact that ESPN did a great job for us to promote the business in that landscape,” he said from the inaugural Miami Grand Prix. “But the great opportunity we have is to make sure that the future offers we are discussing with the partners are well positioned in terms of content, in terms of opportunity for the fans to follow and of course in terms of fees. The future is very interesting for us.”
Formula 1 set a new viewership record last season when it averaged 934,000 viewers per race on ESPN channels and the ABC network — up 54% compared with F1′s 2020 races. F1′s 2021 viewership included an average 1.2 million viewers for the U.S. Grand Prix in Austin.
The growth shows no signs of slowing. ESPN said the season-opener Bahrain Grand Prix in March averaged 1.3 million viewers in the U.S. and peaked at 1.5 million viewers in the race’s final minutes.
The share price of Formula 1’s main tracking stock is up 34% over the past year and has doubled since 2017.

The sport’s recent surge in the U.S. is in large part powered by the Netflix docuseries “Drive to Survive.” Season 4 of the show, released in March, attracted its largest audience to date and broke into the weekly Top 10 in 56 countries, according to Formula 1 and Netflix. The parties announced Thursday the series has been confirmed for a fifth and sixth season.
Some have speculated Netflix could seek to buy the live F1 media rights, and mark its first foray into live sports. Domenicali declined to rule it out.
“Netflix has helped us a lot,” he said. “They did an incredible job. We did an incredible job together, because that’s something that you cannot do alone. I think that together we may have also some other things that we can do together to improve our accessibility in the American market.”
In 2023, F1 will host three U.S. races, with the addition of a race in Las Vegas in November and the U.S. Grand Prix in Austin in October. The first Miami Grand Prix runs this weekend.
While the sport has long been popular overseas, with a global audience averaging more than 80 million per race, it has lagged far behind NASCAR in the U.S., which averaged just under 3 million viewers per race last year.
“We are just at the beginning of this new journey,” Domenicali said. “The popularity of our sport has grown tremendously. It requires a lot of attention, to be sure that our narratives hit the tastes of the American fans.”

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SMALL BUSINESS PLAYBOOK 2022
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Inflation may have peaked, but it isn’t going away.
Even with its “notoriously blunt” tools and Fed chair Powell expressing confidence in a “soft-ish” landing, the Federal Reserve will not be able to keep markets from being volatile and the economy from a rocky period.
The long-term outlook remains positive, but the next 18 to 24 months will be tough for businesses, according to former Fed official and former head of investing giant TIAA Roger Ferguson

Roger Ferguson
Michael Nagle | Bloomberg | Getty Images

Anyone who read a Fed chair coining the term “soft-ish” for an economic landing, as Jerome Powell did on Wednesday, as a bullish signal, has a transitory understanding of how much significance to give to any single day’s trading action. Stocks tanked on Thursday after the relief rally, giving up all of the post-FOMC meeting gains, and more, on pace for the worst day of 2022 for stocks.
Now back to the rougher economic reality, on Main Street, small business owners likely weren’t fooled by the market head fake at all. They have a sobering view of the rest of 2022. More than 80% of small business owners tell CNBC that a recession will hit the U.S. economy this year. The primary business issue they are facing is inflation, which is driving up prices they pay for raw goods and other inputs, while they are growing increasingly fearful about passing along more price increases to the consumer.

The Fed’s battle with inflation is not one that Main Street has much confidence in right now. Just 27% of small business owners are confident in the Federal Reserve’s ability to control inflation, according to the just-released CNBC|SurveyMonkey Small Business Survey for Q2 2022, while 70% say the current Fed rate hike plans will have a negative impact on their business over the next six months.
For Roger Ferguson, a former Fed vice chair and former head of investing giant TIAA, the Fed is doing what it can, but it can only do so much, and the downturn in market and economic sentiment won’t reverse quickly. He recently told CNBC the risk of recession is very high.

The reasons for inflation, including the supply chain disruptions, geopolitical shocks from the Russian war in Ukraine, and the strong demand from consumers in the U.S. fueled by pandemic fiscal and monetary policy, can be mitigated by a Fed that is raising rates, but not entirely controlled.
Even the Fed’s forecast suggests inflation above 2% for at least a couple of more years, Ferguson, who is now vice chair at The Business Council and a distinguished fellow for International Economics at the Council on Foreign Relations, told the CNBC Small Business Playbook virtual event on Thursday. “So there should be the expectation inflation will be bit of a challenge,” he said.
He cited some financial markets indicators which expect inflation to remain “stubbornly high” for several years to come, and while he isn’t in that camp, he added, “it would be nice to say inflation will be behind us relatively quickly, but it will be an issue, though of lessening importance, for more than a year, perhaps two years.”

He sees signs that inflation might be peaking, but has no expectation it becomes dramatically lower.
“We need to get used to inflation at some elevated levels, not getting worse but not getting better,” Ferguson said.
For small businesses, this means there will continue to be specific materials and commodities where supply remains limited, and inflation high, and while it will look like inflation may be getting marginally better, that will be incremental in the macro sense, and not the case with every single input cost. Labor costs will remain high though wage inflation should begin to slow too.
“Powell, in his post-meeting conference, observed that the Fed has tools, as he described, ‘notoriously blunt’ tools,” Ferguson said.
And while Powell was clear that some factors might be outside their control (such as the supply chain functioning, Covid and war), “he was clear that he sees a credible path toward bringing inflation back down to the target of around 2%, and doing so in a way that is soft or a ‘softish’ landing,” Ferguson said.
Inflation will not be back at 2% soon, and the Fed has no illusions about that either, but it will slow and become less of a factor in business decisions, just not across the board, or soon.
For small businesses, those who want to start a business today or are already running one, Ferguson said they should be expecting “a pretty volatile time.”
Small businesses are a huge driver of the economy and job growth, he added, and from the supply issues to labor, the long-term outlook is positive if the Fed is successful in combatting inflation. But before we know the answer to that, the next 12 to 18 to 24 months, will “perhaps be a little rocky,” he said. More

Elon Musk’s SpaceX rolled out a $25 monthly fee this week for customers who seek to relocate their Starlink internet service satellite dishes.
Users who activate the feature will see the base price for Starlink service increase to $135 a month, from $110 a month.
Portability does not mean mobility, however, as SpaceX does not authorize customers to use the service on a moving vehicle.

Elon Musk’s SpaceX rolled out a $25 monthly fee this week for customers who seek to relocate their Starlink internet service satellite dishes.
“Portability enables customers to temporarily move their Starlink to new locations and receive high-speed internet anywhere Starlink provides active coverage within the same continent,” SpaceX wrote in an email to customers on Wednesday, copies of which were seen by CNBC.

Users who activate the feature will see the base price for Starlink service increase to $135 a month, from $110 a month.
Notably, many users in the past year self-reported on social media that they were able to move Starlink dishes outside of the address that they had registered for service, without seeing significant disruptions to service. Starlink has been increasingly embraced by the nomadic, “vanlife” community due to its relativity high speeds – but SpaceX is now charging a price for that flexibility.
Starlink dishes weigh about 10 to 15 pounds, and the kit included with the antenna includes a WiFi router and a base to stand it upright.
The Starlink network of about 2,000 satellites in low Earth orbit is designed to deliver high-speed internet anywhere. SpaceX said in March that there are about 250,000 total Starlink subscribers, which includes both consumers and enterprise customers.

SpaceX’s new portability option comes with several notable caveats to users, according to the Starlink support website. Users who activate the feature will get service “on a best effort basis,” with the company’s advertised speeds of 100 Mbps to 200 Mbps “not guaranteed.”

“Starlink prioritizes network resources for users at their registered service address. When you bring your Starlink to a new location, this prioritization may result in degraded service, particularly at times of peak usage or network congestion,” SpaceX says.
For users with multiple Starlink antennas, portability “must be selected and purchased for each location” – meaning it’s a $25 fee per dish. While the service can be activated instantaneously, SpaceX will invoice customers on a full-month basis.
“For example, if you enable Portability on March 12th and your next billing date is on April 1st, you will be charged $25 on April 1st for the full previous month,” the company said.

A map of Starlink satellite internet coverage, as of May 5, 2022.

International travelers are also restricted to using Starlink dishes “within the same continent as the registered service address.”
“If you use Starlink in a foreign country for more than two months, you will be required to move your registered service address to your new location or purchase an additional Starlink to maintain service,” SpaceX said.
SpaceX’s descriptions of portability also don’t specify whether the feature is only activated by the users, or if the company can start charging the fee if it detects a customer has moved their dish beyond their registered address.
Additionally, portability does not mean mobility.
While SpaceX emphasizes that its Starlink “teams are actively working to make it possible to use Starlink on moving vehicles” such as automobiles, boats and recreational vehicles, customers need to be in a fixed location to use the service.
“Using the Starlink Kit in motion will void the limited warranty of your Kit,” SpaceX says.
A driver in California last year was fined by law enforcement for bolting a Starlink antenna to the hood of their vehicle, which was in place while they were driving.

California Highway Patrol Officer T. Caton

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