Raphael Stevens

Chipotle Mexican Grill is looking to smaller towns to fuel North American unit growth.
On Tuesday, the restaurant chain told investors that it’s expanding the long-term goal for its North American footprint from 6,000 locations to 7,000 units.
The chain benefits from cheaper leases in small towns but without seeing a drop-off in customer demand.

Small towns like big burritos, and it’s fueling Chipotle Mexican Grill’s development strategy in North America.
On Tuesday, the restaurant chain told investors that it’s expanding the long-term goal for its North American footprint from 6,000 locations to 7,000, largely due to its success in smaller towns. For comparison, McDonald’s has 13,443 restaurants in the U.S. alone, although the overwhelming majority are operated by franchisees. At the end of 2021, Chipotle had 2,966 restaurants worldwide  — the bulk of which are company owned and in the U.S.

Shares of Chipotle were up nearly 9% in morning trading Wednesday after the company topped Wall Street’s earnings estimates and shared its new development targets.
“We expected accelerating unit growth in the coming years, but the magnitude is greater than we anticipated,” BMO Capital Markets analyst Andrew Strelzik wrote in a note to clients. “The higher return small market opportunity is interesting as we have seen similar dynamics work well for others in the space.”

A woman wearing a facemas exits a Chipotle Mexican Grill restaurant with her takeout order on January 14, 2021 in Monterey Park, California.
Frederic J. Brown | AFP | Getty Images

In 2022, the chain is planning on opening 235 to 250 new locations. Starting in 2023, it thinks it can accelerate its pace of new units to a range of 8% to 10% a year, citing improving returns on the money it’s investing. More than 80% of the new restaurants will include “Chipotlanes,” the drive-thru lanes dedicated to picking up only digital orders.
“What Chipotlane is also allowing us to do is go into these small towns, where we have another convenient access point,” CEO Brian Niccol said on a conference call with analysts. He defined “small towns” as areas with populations of 40,000 or more people.
Many up-and-coming restaurant chains, like Sweetgreen and Cava, have begun shifting their focus to suburban areas, but Chipotle is entering the next stage of growth for its footprint as it opens locations deeper in the suburban sprawl of the U.S. and Canada.

Chipotle Chief Restaurant Officer Scott Boatwright credits Chipotle’s popularity to the marketing strategy under Niccol, who became CEO four years ago after a successful stint leading Yum Brands’ Taco Bell. Fellow Taco Bell alumnus Chris Brandt took the reins as chief marketing officer of Chipotle and began spending on traditional advertising, like television commercials. The company even ran its first-ever Super Bowl ad last year.
“Now we have a national presence,” Boatwright said in an interview. “I think these smaller communities, they recognize the brand and see it on social [media], on television, and folks are really coming out in throngs in these smaller communities that we’ve struggled in historically.”
Boatwright said the chain benefits from cheaper leases in small towns. And despite serving smaller populations, restaurants in smaller towns are still seeing strong sales.
“It’s a really favorable position to be in,” he said.
Correction: Scott Boatwright is Chipotle’s chief restaurant officer. An earlier version misspelled his name.

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Elon Musk’s SpaceX expects to lose nearly a full launch’s worth of the company’s Starlink internet satellites after a geomagnetic storm last week sent about 40 spacecraft to an early demise.
And the sun is in a new solar cycle, with space weather experts expecting geomagnetic storms to worsen in the next few years, increasing the risk to valuable satellites.
“A lot of these commercial ventures … don’t understand how significantly space weather can affect satellites, especially these small satellites,” Aerospace Corp research scientist Tamitha Skov told CNBC.

Left: A Falcon 9 rocket carries 49 Starlink satellites toward orbit on Feb. 3, 2022. Right: An April 16, 2012 solar eruption is captured by NASA’s Solar Dynamics Observatory.
SpaceX / NASA

The sun has been hibernating – but it’s waking up, and the next few years may see more satellites damaged or destroyed by solar storms than ever before.
Elon Musk’s SpaceX is feeling the pinch of that solar threat this week: The company expects to lose nearly a full launch’s worth of Starlink internet satellites after a geomagnetic storm disrupted the Earth’s atmosphere and sent about 40 of the spacecraft to an early, fiery demise.

But these storms are not uncommon, space weather experts explained to CNBC, and are only expected to worsen over the next few years. The sun started a new 11-year solar cycle in December 2019 and is now ramping to a “solar maximum” that is expected to hit in 2025.

“The reason why [solar storms have] not been a big deal is because, for the past three to four years, we’ve been at what we call ‘solar minimum,'” Aerospace Corp research scientist Tamitha Skov told CNBC.
Notably, the recent solar minimum coincides with a massive spike in the number of satellites in low Earth orbit. About 4,000 small satellites have been launched in the past four years, according to analysis by Bryce Tech – with the vast majority of those operating in low orbits.
“A lot of these commercial ventures … don’t understand how significantly space weather can affect satellites, especially these small satellites,” Skov said.

The solar cycle vs. satellites

The Aurora Borealis (Northern Lights) is seen over the sky in Fairbanks, Alaska, U.S., April 7, 2021, in this picture obtained from social media.
Luke Culver via Reuters

A geomagnetic storm comes from solar wind generated by the sun’s activity. The Earth’s magnetic shield dumps the solar storm’s energy into our planet’s upper atmosphere and heats it up.

“Most people really enjoy it, and they don’t even realize it – because what they’re enjoying is an aurora,” Skov said.
The National Oceanic and Atmospheric Administration measures geomagnetic storms on an increasing severity scale of G1 to G5. The storm which destroyed the Starlink satellites last week was expected to be a G1, which Erika Palmerio – a research scientist at Predictive Science – explained is both minor and “quite common,” happening as much as 1,700 times in the 11-year solar cycle.
“The G5 is the extreme storm and those ones are way, way more rare. We find about four of them per cycle,” Palmerio said.
Palmerio emphasized that a G5 storm is a threat to things such as electrical grids or spacecraft operations, but not people.
“There are no risks for humans on ground with these storms,” Palmerio said.
The side effect of the jump in atmospheric density is an increased drag on satellites in low Earth orbit, which can reduce a spacecraft’s orbit – or, in the case of the Starlink satellites, cause them to reenter and burn up.
Increased radiation of geomagnetic storms can also damage spacecraft, Palmerio said, burning instruments or detectors onboard.

Skov emphasized that Starlink satellites are “very small” but have large solar panels for power, essentially giving each spacecraft “massive” parachutes.
“It was kind of this recipe for disaster when it came to drag,” Skov said. “Some of us in the space weather community have been talking about Starlink satellites falling out of the sky for years – because we knew it was just a matter of time as soon as our sun started getting active again.”
Additionally, the Earth’s “spongy” atmosphere means there isn’t a specific minimum altitude in orbit that is safe, according to Skov. The Starlink satellites recently destroyed were at an altitude of 210 kilometers having just launched. That’s well below the 550 kilometer altitude where the rest of the network’s satellites are raised to, but Skov said “the potential for drag” still exists at the Starlink operational orbit.

History’s warning

A batch of Starlink satellites deploy in orbit after a launch on Nov. 13, 2021.

Skov and Palmerio emphasized that destruction due to geomagnetic storms happens more often than commonly thought, giving examples from historical solar events.
“In 1967, NORAD [the North American Aerospace Defense Command] lost connection to half its catalog of satellites because of a solar storm,” Skov said – an event that nearly led to a nuclear war.
Storms in 1989 took down the electrical grid in Quebec, Canada, halted trading on the Toronto Stock Exchange, caused a sensor on the Space Shuttle Discovery to malfunction inflight, and is credited as the cause of the Solar Maximum Mission satellite falling out of orbit.
“I’m only scratching the surface,” Skov said, adding that it also affects GPS systems and satellites phones “all the time.”
The so-called “Halloween Storms of 2003” caused some of the most powerful geomagnetic storms recorded to date, with Palmerio saying the increased radiation caused the destruction of scientific instruments in space ranging from Earth’s orbit to the surface of Mars.
The major difference in the current solar cycle, compared to the previous one that peaked in April 2014, is the thousands more satellites in low Earth orbit.
“This is the wild, wild west,” Skov said.

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The CDC plans to roll out 10 million doses in three phases as soon as the Food and Drug Administration authorizes the Pfizer and BioNTech shot for children 6 months to 4 years old.
State and local health officials started preordering the first doses this week and will begin receiving vaccine shipments on Feb. 21, which is Presidents Day.

A healthcare worker prepares to administer Pfizer-BioNTech COVID-19 vaccines at an elementary school vaccination site for children ages 5 to 11-year-old in Miami, Florida, U.S., on Monday, Nov. 22, 2021.
Eva Marie Uzcategui | Bloomberg | Getty Images

The Centers for Disease Control and Prevention hasn’t yet approved Covid-19 vaccines for kids under 5, but it’s laying the groundwork to distribute the shots, telling state and local health officials they could receive their first shipments by Feb. 21.
The CDC plans to roll out 10 million doses in three phases as soon as the Food and Drug Administration authorizes the lower-dose, 3-microgram Pfizer and BioNTech shot for children 6 months to 4 years old, according to a new planning document quietly issued Sunday. State and local health officials could start preordering the first doses Monday and will start receiving vaccine shipments on Presidents Day, according to the CDC.

Local officials need to identify where and how the vaccine will be distributed. However, administration of the shots cannot begin until the CDC has given its stamp of approval for the vaccine, which will likely come quickly after the Food and Drug Administration authorizes it later this month.

The FDA’s panel of outside vaccine experts is scheduled to meet on the shots Tuesday.
Jeff Zients, the White House Covid response coordinator, said Wednesday that the federal government can start packing and shipping the shots as soon as the FDA authorization comes through. The U.S. has procured enough doses to vaccinate all 18 million children who are 6 months through 4 years old, Zients said. The syringes and other materials needed to administer the shots are specially formulated for the youngest children, he said.
“We’re working closely with pediatricians and family doctors and children’s hospitals and pharmacies to make sure the vaccine is available at thousands of locations across the country locations that parents know and trust,” Zients told the public during a White House Covid update.

CNBC Health & Science

The FDA has moved to rapidly get the shots authorized on an emergency basis amid mounting pressure from parents and doctors as the omicron variant has led to an increase in children hospitalized with Covid.

At the agency’s request, Pfizer and BioNTech submitted their application to authorize the first two doses of what will ultimately be a three-dose vaccine for children under 5.
Pfizer amended its clinical trial in December to evaluate a third dose after two shots did not induce an adequate immune response in children 2- to 4-years-old. Pfizer and BioNTech said they will submit data on the third dose to the FDA in the coming months.
By expediting authorization of the first two doses, parents will be able get the first two shots for their kids in preparation for the final third dose at a later date. Pfizer said in December that no safety concerns were identified in the 3-microgram dose, which is much smaller than the 30 microgram shot approved for adults.
Pfizer CEO Albert Bourla said Tuesday on CNBC’s “The Exchange” that the data is good and he believes chances are high that the FDA will approve the first two doses. Data on the vaccine is expected Friday when briefing documents for the FDA’s vaccine advisory committee are published. The committee has a meeting scheduled Feb. 15 to discuss the shots for toddlers to 4 year olds.

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Peloton held a virtual all-hands meeting Wednesday that was meant to introduce its new CEO, Barry McCarthy.
Instead, a conversation between McCarthy and former CEO John Foley was abruptly cut short, according to three people familiar with the details of the meeting.
Current and former employees started firing off angry comments in the chat function about this week’s announced job cuts and accusations of mismanagement.

In this photo illustration the Peloton Interactive logo seen displayed on a smartphone screen.
Rafael Henrique | LightRocket | Getty Images

Peloton held a virtual all-hands meeting Wednesday that was meant to introduce its new CEO, Barry McCarthy.
Instead, a conversation between McCarthy and former CEO John Foley was abruptly cut short, according to three people familiar with the details of the meeting.

Current and former employees started firing off angry comments about this week’s announced job cuts and accusations of mismanagement in the chat function, messages obtained by CNBC show.
“I’m selling all my Peloton apparel to pay my bills!!!,” wrote one person.
“This is awfully tone deaf,” said another.
“The company messed up by allowing people who were fired into this chat,” another user wrote. “Too late to mod [moderate] this.”
Toward the end of the conversation, McCarthy was asked if employees who had been laid off had somehow gained access to the chat, to which he replied: “No comment.”

The call ended earlier than planned.
A Peloton spokesperson didn’t immediately respond to CNBC’s request for comment.
The situation suggests McCarthy will face numerous challenges ahead. The former tech executive is tasked with getting the company back to profitability, but he will need to boost employee morale.
The connected fitness equipment maker is slashing costs across its business, and part of that will come from the elimination of about 20% of its corporate workforce, or 2,800 jobs. Peloton’s fitness instructors will not be affected.

McCarthy told Peloton employees in an email on Tuesday that he plans to work very closely with Foley through the changes. He called the restructuring a “bitter pill.” But, McCarthy said, “either revenue had to grow faster or spending had to shrink.”
Meantime, workers who learned this week that they lost their jobs at Peloton have started collectively helping each other look for new positions, across social media platform LinkedIn.
By Wednesday afternoon, a publicly accessible spreadsheet that was created by former Peloton workers had collected more than 250 names and email addresses of people seeking employment.
Peloton has offered affected workers cash severance, career services and a monthly Peloton membership for 12 months.

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Transportation Secretary Pete Buttigieg on Wednesday recognized Tesla as a pioneer of electric vehicle manufacturing in the U.S.
“We admire the range of American companies that have innovated, including Tesla, which did so much to make EVs possible in America,” Buttigieg said on CNBC’s “Squawk Box.” 
When asked about any union-related grievances President Joe Biden might hold against Tesla, Buttigieg responded, “We believe in good paying jobs, and we believe that unions built the middle class.”

Transportation Secretary Pete Buttigieg on Wednesday recognized Tesla as a pioneer of electric vehicle manufacturing in the U.S.
“We admire the range of American companies that have innovated, including Tesla, which did so much to make EVs possible in America,” Buttigieg said in an interview on CNBC’s “Squawk Box.” 

“Now it’s mainstream. Earlier on, at a time when U.S. policy with tax credits was supporting companies like Tesla, that wasn’t viewed as such a sure bet,” he added.
Buttigieg’s acknowledgment of that role in U.S. innovation comes a day after President Joe Biden publicly spoke about Tesla for the first time in his presidency, calling the California-based company “our nation’s largest electric vehicle manufacturer.”
Biden had reportedly previously been reluctant to note Tesla’s market-leading position due to the anti-union stance of its chief executive, Elon Musk. Tesla’s factory workforce is not unionized, and Musk has pushed back on organizing efforts within the company.
The U.S. House of Representatives in November passed the Build Back Better Act, which includes tax incentives up to $12,500 for buyers of American, union-made EVs, although the bill has not passed the Senate. Musk has previously accused the president of being “controlled by unions.”
The Biden administration drew ire from Musk fans last August when it invited General Motors, Ford Motor and Stellantis, formerly Fiat Chrysler — the largest employers of United Auto Workers’ members — to the White House last year for a discussion on electric vehicles and snubbed Tesla. Those automakers have recently announced a litany of major investments in EVs, as they seek to wrestle market share away from Musk’s company.

Tesla is the dominant player in the U.S. electric vehicle market and the most valuable automaker in the world, with its market capitalization surpassing $1 trillion late last year; it has since retreated and stood around $933.5 billion as of Wednesday. Tesla delivered nearly a million vehicles globally in 2021, an 87% increase from the previous year.
When asked about any union-related grievances the president might hold against Tesla, Buttigieg responded, “We believe in good paying jobs, and we believe that unions built the middle class.”
In general, the U.S. has an essential role to play in the transition to electric vehicles, Buttigieg added.
“Again, there’s no question whether autos are headed electric. The question is, ‘Will we get there in time? Will it be made in America?'” he said.

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Advice and the Advisor

Many people are experiencing financial anxiety amid today’s uncertainties.
A survey finds that financial planners could be underestimating the level of worry their clients experience.
Even people who are financially secure could be concerned that financial disaster is around the corner. Here’s how financial planners can help.

The Covid-19 pandemic has made it difficult for people to answer big questions about their futures, and many financial planners are underestimating the financial anxiety that is causing, according to a survey.
A majority of financial planning clients — 71% — report experiencing financial anxiety at least half of the time, according to researchers at the MQ Research Consortium and Kansas State University Personal Financial Planning Program, who conducted the survey with support from the Financial Planning Association and Allianz Life Insurance Company of North America.

Yet on average, only about 49% of financial planners thought financial anxiety was affecting their clients, the survey found.

More from Advice and the Advisor:

The disconnect highlights the fact that while money is a daily topic of conversation for financial planners, for clients it’s often still taboo, said Megan McCoy, professor of practice at Kansas State University Personal Financial Planning Program.
Moreover, there is a difference between financial stress and financial anxiety. People experience financial stress when they do not have enough money.
Financial anxiety happens when you have money, a job and all the hallmarks of financial security, but still worry that something bad is going to happen.
For many people, the constant weight of that anxiety could be worse than a negative event actually happening.

Remaining curious and getting to understand where your clients are in comfort level around money is essential.

Megan McCoy
professor of practice at Kansas State University Personal Financial Planning Program

“The anticipatory anxiety is much more draining on us than actual bad stuff,” McCoy said.
Financial planners can work to better identify clients’ financial anxieties by including a questionnaire on the topic in their client intake process and by seeking training to help them better identify and manage these situations as they come up, the research found.
“Remaining curious and getting to understand where your clients are around money is essential,” McCoy said.
The survey, which was conducted between May and June, updates research done in 2006.
The higher levels of anxiety found today may be an indication that clients are getting more savvy as robo-advisors and other products increasingly let them do their own financial planning.

Consequently, they may be better able to articulate their feelings and needs around money, McCoy said.
Today’s high financial anxiety levels are also happening in the context of the Covid-19 pandemic, where answers to bigger questions are more ambiguous. That includes everything from questions around when the pandemic is going to end to what is happening with housing and inflation.
“That ambiguity is just weighing on everybody,” McCoy said.
However, Covid-19 has improved financial planner and client relationships in one key way — the prevalence of virtual meetings — which may last once the pandemic is over.
Both clients and planners showed a preference for virtual meetings. About 57% of clients indicated they would prefer them even after pandemic restrictions end. Meanwhile, eight in 10 planners said they plan to use virtual engagements at least some of the time going forward.

The survey also identified other areas where financial planners may improve, particularly with regard to communication and diversity, equity and inclusion.
The results from last year’s survey found that financial planners consistently rated themselves higher than their clients did with regard to communication, a reversal from the 2006 study results.
More work is needed to determine whether that is due to planners’ overconfidence or an increased willingness to criticize on the part of clients, according to the research.
Moreover, while the financial planners surveyed were more diverse than they were in 2006, more work is needed to expand the profession’s demographics, the research concluded. For example, 38% of the participants in the new survey were women, up from 27% in 2006. More