Raphael Stevens

Oddity Tech, the parent company behind the Il Makiage and Spoiled Child brands, disagreed with recent comments from Ulta CEO Dave Kimbell that beauty demand was cooling.
“What we do see is an industry that’s transforming. So the consumer is moving online and the consumer is moving to high-efficacy products that really solve their problems,” Chief Financial Officer Lindsay Drucker Mann told CNBC.
The beauty and wellness company, which uses AI to develop new products, blew past Wall Street’s expectations and saw first-quarter sales grow 28% compared to the prior year.

Courtesy: Oddity

As Ulta Beauty says it expects a slowdown in retail’s most resilient category, an upstart says it is bucking the trend. 
Oddity Tech, the newly public Israeli cosmetics platform that uses artificial intelligence to develop products, posted first-quarter results that blew past expectations and raised its full-year guidance. 

Here is how the beauty retailer behind the Il Makiage and Spoiled Child brands performed compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 61 cents adjusted vs. 49 cents expected
Revenue: $211.63 million vs. $205 million expected

The company reported net income of $32.98 million, or 53 cents per share, for the three-month period that ended March 31, compared with $19.59 million, or 35 cents per share, a year earlier. Excluding one-time items, Oddity reported earnings of 61 cents per share. 
Sales rose to $212 million, up about 28% from $166 million a year earlier. 
The company is now expecting full-year revenue to be between $626 million and $635 million, compared to a prior outlook of $620 million to $630 million. Analysts had expected $627 million, according to LSEG. It expects adjusted earnings per share to be between $1.57 and $1.62, up from prior guidance of $1.49 to $1.54. Analysts had expected $1.51, according to LSEG. 
For the current quarter, Oddity is expecting sales to be between $185 million and $189 million, and adjusted earnings per share to be in the range of 61 cents to 64 cents. Analysts had expected revenue of $186.5 million and earnings per share of 56 cents, according to LSEG. 

Shares jumped nearly 10% in extended trading Tuesday.
Oddity, which started trading on the Nasdaq in July, aims to disrupt the legacy beauty and wellness industry by using AI to develop new products and tailor recommendations.
Oddity believes beauty and wellness products are best sold online, and that consumers will not need to visit beauty shops such as Ulta and Sephora if product selection can be improved. 
Last month, Ulta Beauty CEO Dave Kimbell warned that demand for beauty products was cooling, sending its stock down 15% that day and hitting shares of e.l.f. Beauty, Estée Lauder and Coty.
“We have seen a slowdown in the total category,” Kimbell said at an investor conference hosted by JPMorgan Chase. “We came into the year — and we talked about this on our [earnings] call a few weeks ago — expecting the category to moderate. It has [had], as I said, several years of strong growth. We did not anticipate it would continue at the rate that it’s been growing.”
He added that the slowdown has been “a bit earlier and bit bigger than we thought.” Kimbell said the downturn has cut across price points and beauty categories, but has been more significant in prestige makeup and hair care.
Lindsay Drucker Mann, Oddity’s chief financial officer, disagreed that the category is slowing down. 
“There’s no slowdown for us, not in our new users, and not in the way our existing users are behaving. If anything, the quarter shows there’s massive demand for online,” Drucker Mann told CNBC in an interview. 
“What we do see is an industry that’s transforming,” she said. “So the consumer is moving online and the consumer is moving to high-efficacy products that really solve their problems and these are two really unstoppable trends that we see driving the industry that we are leading.”
Read the full earnings release here.

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Novo Nordisk and Eli Lilly’s dominance over the budding weight loss drug market could eventually face threats from formidable rivals.
Amgen is among the leaders of a pack of drugmakers racing to join the market with their own weight loss treatments. 
But Viking Therapeutics, Altimmune, Structure Therapeutics, AstraZeneca and partners Boehringer Ingelheim and Zealand Pharma are progressing on their own experimental drugs.

The injectable weight-loss medication Wegovy is available at New City Halstead Pharmacy on April 24, 2024 in Chicago, Illinois.
Scott Olson | Getty Images

Novo Nordisk and Eli Lilly have long dominated the rapidly growing weight loss drug market, but their duopoly is closer than ever to facing a threat from a new rival. 
Amgen is among the leaders of a pack of drugmakers racing to join the market with their own weight loss treatments. As the company proceeds with the trials needed to bring its experimental obesity injection to the market in the coming years, it could see a few advantages.

Amgen’s drug, MariTide, is taken less frequently than Novo Nordisk’s Wegovy and Eli Lilly’s Zepbound, and may cause longer-lasting weight loss than the market leaders’ injections. Amgen, one of the nation’s biggest pharmaceutical companies, can also produce drugs at scale – a huge edge over smaller biotech companies that lack a large manufacturing footprint. 
“There are a number of others trying to break into [the market] both small and large, but when I step back, I do think that Amgen has a real shot at being disruptive and challenging Eli Lilly and Novo,” William Blair & Company analyst Matt Phipps told CNBC. 
Amgen has seen its shares pop 12% since CEO Bob Bradway on Thursday said he was “very encouraged” by an ongoing mid-stage study on MariTide. But it isn’t the only company with a chance to upend the market.
Other companies — like Viking Therapeutics, Altimmune, Structure Therapeutics, AstraZeneca and partners Boehringer Ingelheim and Zealand Pharma — are among those that are making progress on their own treatments. Novo Nordisk and Eli Lilly are also working on new weight loss drugs.
“I don’t know if I’m ready to pick another clear winner yet based on the data we have,” Phipps said.

The competition for a slice of the weight loss market has only grown more fierce in recent months. Still, despite intermittent supply shortages and limited insurance coverage, demand for Wegovy and Zepbound isn’t expected to slow down anytime soon. That leaves room for new entrants in a segment expected to grow to $100 billion by the end of the decade.
While Amgen is in a strong position, it will take years for MariTide to reach patients. The company has not provided an estimated launch date for its obesity injection. In a research note published Thursday, JPMorgan analyst Chris Schott estimated it will hit the market in 2028. 

Amgen appears to have a competitive edge

Amgen is testing out a once-a-month or even less frequent basis for its drug, which would be more convenient than the weekly medicines on the market. Several drugmakers are developing weekly injections or daily pills, but some haven’t ruled out testing less frequent dosing for their drugs. 
MariTide showed sustained weight loss after a single injection or multiple shots during a phase one trial, which allowed for less frequent doses of the drug, according to the study authors. They added that the company’s drug can also stick around in the body for much longer than current therapies.

The Amgen logo is displayed outside Amgen headquarters in Thousand Oaks, California, on May 17, 2023.
Mario Tama | Getty Images

Phipps said he’s confident that patients can take MariTide even less frequently, such as once a quarter, to maintain the weight loss they saw after starting the drug. That could make it easier for Amgen to manufacture enough supply – and avoid an issue that has been plaguing Novo Nordisk and Eli Lilly.
Amgen is already starting to expand manufacturing capacity for MariTide, executives said during an earnings call on May 2.
Less frequent doses of MariTide may also cause fewer side effects than other weight loss treatments, Phipps noted. Many patients stop taking existing drugs due to nausea and vomiting.
MariTide causes some of those same side effects, but Phipps said a monthly or quarterly injection of the drug would lead to fewer days of feeling sick compared with a weekly dose. He added that fewer doses could help patients stick to the treatment and maintain weight loss.
“Even if you do have some nausea for the day, just once a quarter versus once a week I think that’s huge for getting more patients to stay on,” said Phipps. 
Much like Wegovy and Zepbound, Amgen’s treatment activates a gut hormone receptor called GLP-1 to help regulate a person’s appetite. 
But while Zepbound activates a second appetite-suppressing hormone receptor called GIP, Amgen’s drug blocks it. Wegovy does not target GIP, which as a receptor may also improve how the body breaks down sugar and fat.
While Amgen’s progress has excited Wall Street and sent its stock climbing, other companies are also moving toward putting a product on the market. Here is where those other drugs stand.

Newer Novo Nordisk, Eli Lilly drugs on the way

Novo Nordisk and Eli Lilly are developing new drugs for weight loss and diabetes that could improve on their current treatments and enter the market earlier than MariTide and other experimental medicines.
They include a weekly injection from Novo Nordisk for diabetes and obesity called CagriSema. That drug combines semaglutide, the active ingredient in Wegovy, along with an experimental drug called cagrilintide. 
CagriSema helped diabetes patients who were overweight or obese lose 15.6% of their weight after 32 weeks in a mid-stage trial. Novo Nordisk is studying CagriSema in six late-stage clinical trials and could release data from a 68-week study in obese patients later this year.

An injection pen of Zepbound, Eli Lilly’s weight loss drug, is displayed in New York City, U.S., December 11, 2023. 
Brendan McDermid | Reuters

Meanwhile, Eli Lilly is studying an experimental drug called retatrutide in a late-stage trial. That treatment helped patients lose up to 24% of their weight after almost a year in a mid-stage trial, which set a new bar for weight loss.
Retatrutide mimics three different hunger-regulating hormones: GLP-1, GIP and glucagon. That combination appears to be even more effective at curbing a person’s appetite.
Eli Lilly is also developing an oral drug called orforglipron, which targets GLP-1. The company is slated to release late-stage trial data on the pill and retatrutide in 2025. 

Boehringer Ingelheim, Zealand Pharma injection

Among other potential entrants, Boehringer Ingelheim and Danish biotech firm Zealand Pharma are developing a weekly weight loss injection. The experimental drug targets GLP-1 to suppress appetite and glucagon to increase energy expenditure. 
Boehringer Ingelheim in August said it was moving the drug, called survodutide, into a late-stage study. A mid-stage trial found patients who are overweight or have obesity lost up to 19% of their weight after 46 weeks of treatment with the drug.
In February, the companies also posted positive mid-stage trial data on survodutide in patients with a severe form of liver disease.
Boehringer Ingelheim hopes survodutide will launch as a treatment for obesity or liver disease in 2027 or 2028, as long as trial data is favorable, according to a Reuters interview.

AstraZeneca and Pfizer pills

AstraZeneca is also developing a daily obesity pill, called ECC5004, under a partnership it inked with Chinese biotech company Eccogene in November. 
AstraZeneca executives have said the pill is rapidly absorbed and doesn’t stay in the stomach long, which could reduce side effects relative to existing treatments. Executives have also said that patients can take the pill alone or in combination with its other oral drugs, such as the diabetes drug Farxiga, to treat obesity and related health issues.
But the drug, which targets GLP-1, is years away from entering the market. The company has completed a phase one trial in patients with diabetes and plans to present the data at a medical conference later this year, executives said during an earnings call in April.
Also in an early-stage trial is AstraZeneca’s experimental obesity drug AZD6234, which targets another gut hormone called amylin. The company hopes it can combine AZD6234 with its oral GLP-1 to help patients achieve greater weight loss than with existing drugs, AstraZeneca CEO Pascal Soriot said in November.

Outside the Macclesfield factory of AstraZeneca.
Christopher Furlong | Getty Images News | Getty Images

Meanwhile, investors are eager to see new data on Pfizer’s once-daily obesity pill around the middle of the year, which will determine the company’s fate in the weight loss drug market. The company scrapped the twice-a-day version of that pill, danuglipron, in December after patients had a difficult time tolerating it in a trial. 
Pfizer could have another chance to enter the market if it acquires a smaller obesity drugmaker. But for now, a deal appears unlikely as the company works to rebound from the decline of its Covid business last year.
“As it relates to bolt-on acquisitions, in the near term you would not expect us to do much there,” Pfizer Chief Financial Officer David Denton said during an earnings call on May 1.

Smaller biotechs show promise 

Beyond those major pharmaceutical companies, Viking Therapeutics, Altimmune and Structure Therapeutics have drawn immense attention to their respective weight loss drug pipelines. The trio has far fewer resources and less manufacturing capacity than Amgen or Pfizer, but that could change if they get scooped up by a large drugmaker. 
Viking Therapeutics in March released initial data from a mid-stage trial on its experimental injection, which targets GLP-1 and GIP. Those who received weekly doses of the treatment lost up to 13.1% of their weight compared with patients who received a placebo after 13 weeks. 
Viking will likely conduct another phase two trial that could last between six and nine months, the company’s CEO Brian Lian said during an investor call in March. Viking’s treatment likely won’t reach the market until 2029 or later, Jefferies analyst Akash Tewari wrote in a note that same month.
Also in March, Viking said it plans to start a phase two trial on an oral version of its drug after it showed positive results in a small study.
Structure Therapeutics is also developing an oral GLP-1 for obesity and diabetes. But it missed Wall Street’s expectations for weight loss in a mid-stage trial in December.
The pill helped obese patients lose roughly 5% of their weight compared with those who received a placebo after eight weeks.
Structure said it expects full 12-week results on patients with obesity in the second quarter of this year. The company plans to start a larger mid-stage study in the second half of this year and a late-stage trial in 2026. 
Altimmune is developing a weekly obesity injection called pemvidutide, which targets GLP-1 and glucagon.
In November, Altimmune released mid-stage trial data showing that its drug caused 15.6% weight loss on average after 48 weeks. The company also announced additional data from that study in March showing that its injection minimized the loss of muscle mass, a negative side effect of existing weight loss injections. 
Altimmune will meet with the Food and Drug Administration in the second half of the year to chart a path forward for the injection.
Correction: This article has been updated to reflect the correct spelling of Bob Bradway’s name. More

New York is the richest city in the world, with 359,500 millionaires and 60 billionaires, according to a new study.
The Bay Area of California is close behind, with its millionaire population surging 82% over the past decade.
Over the past decade, the surge in tech wealth combined with the rise in the stock market and deal-making has created record amounts of wealth.

The New York City skyline.
Alexander Spatari | Moment | Getty Images

New York is the richest city in the world, with 359,500 millionaires and 60 billionaires, although the Bay Area of California is close behind, according to a new study.
New York’s millionaire population has surged 48% over the past decade, despite fears of wealth flight and the Covid-19 pandemic hollowing out the city’s affluent population, according to a report from Henley & Partners in collaboration with New World Wealth. New York’s millionaire population is now larger than the entire populations of Orlando or Pittsburgh. New York residents now have more than $3 trillion in wealth, greater than the GDPs of Brazil, Italy or Canada.

San Francisco and the Bay Area, however, is catching up fast. The Bay Area’s millionaire population has surged 82% over the past decade, to 305,700 people. The Bay Area leads in billionaire population, with 68 billionaires, according to the report, which compared global wealthy populations as of December.
The U.S. is increasing its lead as the largest creator of millionaires and billionaires in the world. The U.S. is home to 11 of the top 50 richest cities, according to the report.
Over the past decade, the surge in tech wealth combined with the rise in the stock market and deal-making has created record amounts of wealth. The pandemic fiscal stimulus effectively turbocharged wealth creation, especially at the top, with the wealth of America’s top 1% surging over 40%, according to the Federal Reserve.
“The U.S. continues to dominate the world’s wealthiest cities due to its dominance of the global financial, tech and entertainment sectors,” said Andrew Amoils, head of research at New World Wealth. “Notably, U.S. cities have significantly outperformed other western cities over the past decade when it comes to overall wealth and millionaire growth,” Amoils added.
Some cities around the world have seen a reversal of fortune. Tokyo, which was the wealthiest city in the world a decade ago, is now at third place, with its millionaire population declining 5% to 298,300 people.

London, the wealthiest city in the world for many years, tumbled to fifth place, as Brexit, Russian sanctions and other policies have slowed wealth migration. The city’s millionaire population has declined 10% over the past decade.
China cracked the top 10 for the first time, with Beijing seeing a 90% increase in millionaires over the past decade to 125,600 millionaires. Yet, its slowing economy and wealth flight are causing a reversal in wealth creation, with the millionaire population down 4% last year, Amoils said.
Singapore, benefiting from the flow of wealth out of China, climbed two spots to fourth place in the rankings, with a 64% growth in millionaires to 244,800 people. More than 3,400 millionaires moved to Singapore in 2023 alone, and Amoils said Singapore is set to take Tokyo’s place on the ranking “very soon.”
Los Angeles also rose on the list, moving up two places to sixth place with a 45% jump in the number of millionaires.
Juerg Steffen, CEO of Henley & Partners, said financial markets have been the main engine of wealth creation around the world over the past decade.
“The S&P 500’s 24% gain last year, along with the Nasdaq’s 43% surge and bitcoin’s staggering 155% rally, has buoyed the fortunes of wealthy investors,” he said. “Rapid advancements in artificial intelligence, robotics and blockchain technology have provided new opportunities for wealth creation and accumulation.”
Here is the full ranking of the world’s richest cities, according to Henley & Partners and New World Wealth:
1. New York City
2. Bay Area, California
3. Tokyo
4. Singapore
5. London
6. Los Angeles
7. Paris & Île-de-France
8. Sydney
9. Hong Kong
10. Beijing
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Disney topped earnings estimates while reporting revenue that was roughly in line with analyst expectations.
Disney+ and Hulu reported a combined profit in the quarter for the first time ever.
When combined with ESPN+, the streaming unit reported a loss of $18 million in the quarter.
Traditional TV revenue and box office sales slumped in the quarter.

The “Partners” statue of Walt Disney and Mickey Mouse, at Cinderella Castle at the Magic Kingdom, at Walt Disney World, in Lake Buena Vista, Florida, photographed Saturday, June 3, 2023.
Joe Burbank | Tribune News Service | Getty Images

Disney reported fiscal second-quarter earnings Tuesday that beat analyst estimates after narrowing streaming losses. Revenue was in line with expectations.
Disney’s total segment operating income jumped 17% as the company’s entertainment streaming applications — Disney+ and Hulu — turned a profit in the quarter for the first time. When combined with ESPN+, the streaming businesses lost $18 million in the quarter, much narrower than the $659 million loss the division reported a year earlier.

Entertainment streaming revenue (excluding ESPN+) rose 13% in the quarter to $5.64 billion, and operating income was $47 million after a loss of $587 million a year prior. Disney credited increased Disney+ subscribers and higher average revenue per user for the gains.
Disney+ Core subscribers increased by more than 6 million in the second quarter to 117.6 million global customers. Total Hulu subscribers grew 1% to 50.2 million. ESPN+ subscribers fell 2% to 24.8 million.
Here is what Disney reported compared with what Wall Street expected, according to LSEG:

Earnings per share: $1.21 adjusted vs. $1.10 cents expected
Revenue: $22.08 billion vs. $22.11 billion expected

“Our results were driven in large part by our Experiences segment as well as our streaming business,” Disney Chief Executive Officer Bob Iger said in a statement. “Importantly, entertainment streaming was profitable for the quarter, and we remain on track to achieve profitability in our combined streaming businesses in Q4.”
U.S. parks and experiences revenue rose 7% to $5.96 billion, and international sales soared 29% to $1.52 billion on increased attendance and higher prices at the Hong Kong Disneyland Resort.

Disney reported a loss attributable to the company of $20 million, or 1 cent per share, compared with a profit of $1.27 billion, or 69 cents per share in the year-earlier period. Adjusting for restructuring and impairment charges, among other things, Disney reported a profit of $1.21 per share. Revenue rose to $22.08 billion, up 1% from a year earlier.
Disney shares fell more than 8% in premarket trading Tuesday.

Traditional businesses struggle

Disney’s TV business continued to lag as millions of Americans drop cable TV each year. While ESPN’s revenue rose 3% to $4.21 billion, operating income dropped 9% to $799 million. A drop in cable subscribers and higher programming costs attributable to the College Football Playoff led to the decline. ESPN’s advertising revenue increased to offset the subscriber losses.
Linear network revenue across Disney’s portfolio, excluding ESPN, fell 8% to $2.77 billion. Operating incomed slumped 22% to $752 million. Disney cited fewer subscribers and a drop in international affiliate fees due to contract rate decreases for the declines. Advertising revenue decreases due to “lower average viewership” were also a factor, Disney said.
Content sales, licensing and other revenue, which includes box office, fell 40% in the quarter to $1.39 billion as Disney didn’t have any blockbuster movies in the quarter. Disney noted last year’s quarter also included the benefit of the ongoing performance of “Avatar: The Way of Water,” which was released in December 2022 and generated more than $2.3 billion in global box-office sales.
Disclosure: Comcast, which owns CNBC parent NBCUniversal, is a co-owner of Hulu.
This story is developing. Please check back for updates.

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Disney’s second-quarter results shows that the company’s future strategy is fully in effect.
Disney+ and Hulu made money in the quarter — $47 million. Last year in the second quarter, Disney+ and Hulu lost $587 million.
Excluding ESPN, linear TV operating income slumped 22% to $752 million.

The Walt Disney Company CEO Bob Iger attends the Nominees Luncheon for the 95th Oscars in Beverly Hills, California, U.S. February 13, 2023. 
Mario Anzuoni | Reuters

For Disney, the future is now.
It’s been five years in the making, but Disney nearly turned a profit in its streaming units for the first time in the second quarter, losing just $18 million between Disney+, Hulu and ESPN+. That’s improvement from a loss of $659 million a year ago.

Stripping out ESPN+, Disney+ and Hulu actually made money in the quarter — $47 million. Last year in the second quarter, Disney+ and Hulu lost $587 million.
The thesis among all major legacy media companies has been that streaming will eventually take over for cable TV as the primary money-making engine. That’s why Disney, Paramount Global, Warner Bros. Discovery and Comcast’s NBCUniversal all built their own subscription streaming services.
That hasn’t happened yet, but this quarter finally suggests that moment is upon us. It’s not just that Disney nearly made money in streaming — it’s that the company’s traditional linear TV results were awful.
For years, Disney held back on making ESPN available outside of the cable bundle because of how lucrative the sports network was inside the walled garden of traditional TV. Those days are also nearly over. Disney is launching a skinnier bundle of linear cable channels with Warner Bros. Discovery and Fox in the fall, making ESPN available outside of traditional cable for the first time. Next year, Disney will launch its flagship ESPN streaming service, which will allow consumers to subscribe to ESPN without cable at all.
Looking at Disney’s results in the second quarter, it’s clear why the company has finally pulled the ripcord on ESPN. While ESPN’s revenue rose 3% to $4.21 billion, operating income dropped 9% to $799 million. A drop in cable subscribers, and higher programming costs attributable to the College Football Playoff led to the decline, Disney said. ESPN advertising rose to offset the cable subscriber decline.

The decline in the company’s other linear networks, such as ABC, Disney Channel, FX, National Geographic, and Disney Junior, was even more alarming. Linear network revenue across Disney’s portfolio, excluding ESPN, fell 8% to $2.77 billion. Operating income slumped a whopping 22% to $752 million.
Disney shares fell 5% in premarket trading.

The new reality

Simply put, traditional TV is dying on the vine. It’s declining at the most rapid pace consumers have seen.
Disney has prepared for this moment for years. Streaming will become profitable in the fourth quarter, Disney reiterated, and will “be a meaningful future growth driver for the company, with further improvements in profitability in fiscal 2025,” the company said in its earnings release.
The big question for the company is if its investors will embrace this new reality. That will be up to Disney’s streaming execution in the years to come, and likely, Chief Executive Officer Bob Iger’s still to-be-named successor.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
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