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    U.S. consumers are starting to crack as tariffs add to inflation, recession concerns

    Executives from across the retail and travel industries are bracing for a slowdown in demand amid President Donald Trump’s trade war.
    CEOs of strong companies like Delta, Walmart and Dick’s Sporting Goods have struck cautious tones in recent weeks, leading them to cut their guidance or give weaker-than-expected outlooks.
    Compounding the issue is a slowing job market, persistent inflation and sliding consumer confidence.

    Shoppers cast shadows as they carry their bags along the waterfront in Portland, Maine, U.S, December 26, 2024. 
    Kevin Lamarque | Reuters

    It’s not just Walmart.
    The leaders of companies that serve everyone from penny-pinching grocery shoppers to first-class travelers are seeing cracks in demand, a shift after resilient consumers propped up the U.S. economy for years despite prolonged inflation. On top of high interest rates and persistent inflation, CEOs are now grappling with how to handle new hurdles like on-again, off-again tariffs, mass government layoffs and worsening consumer sentiment.

    Across earnings calls and investor presentations in recent weeks, retailers and other consumer-facing businesses warned that first-quarter sales were coming in softer than expected and the rest of the year might be tougher than Wall Street thought. Many of the executives blamed unseasonably cool weather and a “dynamic” macroeconomic environment, but the early days of President Donald Trump’s second term have brought new challenges — perhaps none greater than trying to plan a global business at a time when his administration shifts its trade policies by the hour.
    Economists largely expect Trump’s new tariffs on goods from China, Canada and Mexico will raise prices for consumers and dampen spending at a time when inflation remains higher than the Federal Reserve’s target. In February, consumer confidence — which can help to signal how much shoppers are willing to shell out — saw the biggest drop since 2021. A separate consumer sentiment measure for March also came in worse than expected.

    Stock chart icon

    NYSE Arca Airline Index versus the S&P 500.

    Another sign of weakness has been in air travel. The sector, especially large international airlines, had been a bright spot following the pandemic, with consumers proving again and again that they wouldn’t give up trips even in the face of the biggest jump inflation in more than four decades. This week, however, the CEOs of the four largest U.S. airlines — United, American, Delta and Southwest — said they are seeing a slowdown in demand this quarter. American, Delta and Southwest cut their first-quarter forecasts.

    Plus, the strong U.S. job market of recent years is showing early signs of stress as job growth slows and unemployment ticks up.
    These trends have thrown cold water on what was a red-hot stock market and sparked new fears about a potential recession, sending the S&P 500 tumbling 10% from its record highs in February, though it had recovered significant ground by Friday afternoon.

    Now, as investors and executives grow more worried about the impact tariffs will have on consumer spending and fret about an administration they had high hopes for just a few months ago, even the strongest companies are striking cautious tones as the weaker ones get even louder. 
    Take Walmart, the retail industry’s de facto leader, which has spent the last year turning an uncertain economy into fuel for growth as it courted higher-income consumers. When Walmart announced fiscal fourth-quarter earnings last month, its stock fell after it warned that profit growth would be slower than expected in the year ahead. It was a rare warning sign from a company that tends to thrive in a weaker economy, and an indication that it’s expecting consumers to pull back from higher-margin discretionary goods in favor of essentials like milk and paper towels in the year ahead. 
    “We don’t want to get out over our skis here. There’s a lot of the year to play out,” Walmart’s finance chief, John David Rainey, told analysts when discussing the company’s outlook. “It’s prudent to have an outlook that is somewhat measured.”

    Charly Triballeau | Afp | Getty Images

    Ed Bastian, chief executive of Delta Air Lines – the most profitable U.S. carrier that has reaped the rewards of big spenders in recent years – struck a similar tone after it slashed its earnings and revenue forecast for the first quarter. In an interview Monday on CNBC’s “Closing Bell,” Bastian said that consumer confidence has weakened and that both leisure and business customers have pulled back on bookings, which led it to cut its guidance.
    “Consumers in a discretionary business do not like uncertainty,” said Bastian. “And while we do believe this will be a period of time that we pass through, it is also something that we need to understand and get to calmer waters.”
    To be sure, it wasn’t just fewer people booking trips that led the airline to cut its first-quarter forecast. Questions about air safety compounded the problem after two major airline accidents, including Delta’s own crash landing in Toronto, in which no one died.
    Beyond Delta, rival United said it will retire 21 aircraft early, a move that aims to cut costs.
    “We have also seen weakness in the demand market,” United CEO Scott Kirby said at Tuesday’s JPMorgan airline industry conference. “It started with government. Government is 2% of our business. Government adjacent, all the other consultants and contracts that go along with that are probably another 2% to 3%. That’s running down about 50% right now. So a pretty material impact in the short term.”
    The airline has seen some of that dynamic “bleed over” into the domestic leisure market, as well, Kirby added. He said the company is already looking at where it will cut flights, eyeing a big drop in traffic from Canada into the U.S. and in markets that were popular with government workers.
    American Airlines cut its first-quarter earnings forecast and said in addition to demand pressures, bookings were hurt after a deadly midair collision of an Army helicopter with one of its regional jets in Washington, D.C., in January.
    The company also felt the pullback in government travel and associated trips like those for contractors.
    “We know that there’s some follow-on effect in terms of leisure travel associated with that as well,” said CEO Robert Isom.
    Airline executives were upbeat about longer-term demand in 2025, however.
    Other strong companies, such as Dick’s Sporting Goods, E.l.f. Beauty and Abercrombie & Fitch, also issued weak forecasts in recent weeks, though they indicated they were feeling positive about the second half of the year. 
    “I do think it’s just a bit of an uncertain world out there right now,” Ed Stack, chairman of Dick’s Sporting Goods, told CNBC when asked about the company’s guidance. “What’s going to happen from a tariff standpoint? You know, if tariffs are put in place and prices rise the way that they might, what’s going to happen with the consumer?”
    Over the last year, companies like United, Walmart and Abercrombie have managed to outperform the S&P 500, even as shoppers reduced discretionary spending, so this change in commentary marks a major shift. It’s a warning sign that shoppers could be starting to crack, and that even excellent execution is no match for tariff-induced price increases after four years of historic inflation. 
    Meanwhile, the companies that have already spent the last year calling out uncertain consumer dynamics are sounding even more worried.
    “Our customers continue to report that their financial situation has worsened over the last year, as they have been negatively impacted by ongoing inflation. Many of our customers report they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities,” the CEO of Dollar General, Todd Vasos, said on the company’s fourth-quarter earnings call Thursday, adding customers are expecting value and convenience “more than ever.” The worsening consumer outlook has compounded the company’s own internal challenges.
    “As we enter 2025,” Vasos continued. “We are not anticipating improvement in the macro environment, particularly for our core customer.”
    Elsewhere in the retail industry, American Eagle on Tuesday warned that cold weather led to a slower-than-expected start to the first quarter, but said it wasn’t just temperatures. The apparel retailer specifically called out “less robust demand” and said it’s taking steps to reduce expenses and manage inventory as it braces for what’s still to come. 
    “[Consumers] have the fear of the unknown. Not just tariffs, not just inflation, we see the government cutting people off. They don’t know how that’s going to affect them. They see programs being cut, they don’t know how that’s going to affect them,” said CEO Jay Schottenstein. “And when people don’t know what they don’t know – they get very conservative … it makes everyone a little nervous.”

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    ‘Please unleash us,’ Europe’s telcos urge regulators as industry bangs drum for more mega-deals

    Last week at Mobile World Congress (MWC) in Barcelona, CEOs of European telecoms firms called on regulators to make it easier for them to combine their operations with other businesses.
    Currently, there are numerous telco players operating in different European countries.
    However, telco bosses say they’d be able to compete more effectively with only three main players per market — a model that’s become the standard in places like the U.S, China and India.

    The Deutsche Telekom pavilion at Mobile World Congress in Barcelona, Spain.
    Angel Garcia | Bloomberg | Getty Images

    BARCELONA — Europe’s telecommunication firms are ramping up calls for more industry consolidation to help the region compete more effectively with superpowers like the U.S. and China on key technologies like 5G and artificial intelligence.
    Last week at the Mobile World Congress (MWC) trade show in Barcelona, CEOs of several telecoms firms called on regulators to make it easier for them to combine their operations with other businesses and reduce the overall number of carriers operating across the continent.

    Currently, there are numerous telco players operating in multiple EU countries and non-EU members such as the U.K. However, telco chiefs told CNBC this situation is untenable, as they’re unable to compete effectively when it comes to price and network quality.
    “If we’re going to invest in technology, in deep know-how, and bring drastic change, positive drastic change in Europe — like other large technological companies have done in the U.S. or we’re seeing today in China — we need scale,” Marc Murtra, CEO of Spanish telecoms giant Telefonica, told CNBC’s Karen Tso in an interview.
    “To be able to get scale, we need to consolidate a fragmented market like the telecoms market in Europe,” Murtra added. “And for that, we need a regulation that allows us to consolidate. So what we do ask is: please unleash us. Let us gain scale. Let us invest in technology and bring upon productive change.”

    Christel Heydemann, CEO of French carrier Orange, said that while some mega-deal activity is starting to gather pace in Europe, more needs to be done to guarantee the continent’s competitiveness on the world stage.
    Last year, Orange closed a deal to merge its Spanish operations with local mobile network provider Masmovil. Meanwhile, more recently, the U.K.’s Competition and Markets Authority approved a £15 billion ($19 billion) merger between telecoms firms Vodafone and Three in the U.K., subject to certain conditions.

    “We’ve been actively driving consolidation in Europe,” Orange’s Heydemann told CNBC. “We see things changing now. There’s still a lot of hope.”
    However, she added: “I think there’s a lot of pressure in Europe from the business environment on our political leaders to get things to change. But really, things have not yet changed.”
    During a fiery keynote address on Monday, the CEO of German telco Deutsche Telekom, Tim Höttges, said that other telco markets such as the U.S. and India have condensed in size to only a handful of players.
    The American telco industry is dominated by its three largest mobile network operators, Verizon, AT&T and T-Mobile. T-Mobile is majority-owned by Deutsche Telekom.

    Stock chart icon

    A chart comparing the share price performance of T-Mobile, America’s largest telco by market cap, with that of Germany’s Deutsche Telekom and France’s Orange.

    “We need a reform of the of the competition policy,” Höttges said onstage at MWC. “We have to be allowed to consolidate our activities.”
    “There is no reason that every market has to operate with three or four operators,” he added. “We should build a European single market … because, if we cannot increase our consumer prices, if we cannot charge the over-the-top players, we have to get efficiencies out of the scale which we created.”
    “Over-the-top” refers to media platforms such as Netflix that deliver content over the internet, bypassing traditional cable networks.

    Europe’s competitiveness in focus

    From AI to advances to next-generation 5G networks, Europe’s telecoms firms have been investing heavily into new technologies in a bid to move beyond the legacy model of laying down cables that enable internet connectivity — a business model that’s earned them the pejorative term “dumb pipes.”
    However, this costly endeavor of modernization has happened in tandem with sluggish revenue growth and an inability for the sector to effectively monetize its networks to the same degree that technology giants have done with the emergence of mobile applications and, more recently, generative AI tools.
    At MWC, many mobile network operators talked up their usage of AI to improve network quality, better serve their customers and gain market share from competitors.
    Still, Europe’s telco bosses say they could be accelerating their digital transformation journeys if they were allowed to combine with other large multinational players.
    “There’s this real focus now around European competitiveness,” Luke Kehoe, industry analyst for Europe at network intelligence firm Ookla, told CNBC on the sidelines of MWC last week. “There’s a goal to mobilize policy to improve telecoms networks.”

    In January, the European Commission, the executive body of the European Union, issued its so-called “Competitiveness Compass” to EU lawmakers.
    The document calls for, among other things, “revised guidelines for assessing mergers so that innovation, resilience and the investment intensity of competition in certain strategic sectors are given adequate weight in light of the European economy’s acute needs.”
    Meanwhile, last year former European Central Bank President Mario Draghi released a long-awaited report that urged radical reforms to the EU through a new industrial strategy to ensure its competitiveness.
    It also calls for a new Digital Networks Act that would look to improve incentives for telcos to build next-generation mobile networks, reduce compliance costs, improve connectivity for end-users, and harmonize EU policy across the network spectrum, or the range of radio frequencies used for wireless communication.
    “The common theme and the mood music is certainly reducing ex-ante regulation and to foster what they would call a more competitive environment which is an environment more conducive of consolidation,” Ookla’s Kehoe told CNBC. “Moving forward, I think that there will be more consolidation.”
    However, the telco industry has some way to go toward seeing transformational cross-border mergers and acquisitions, Kehoe added.

    For many telco industry analysts, the demands for increased consolidation is nothing new.
    “European telco CEOs have never been shy about calling for consolidation and growth-friendly regulation,” Nik Willetts, CEO of the telco industry association TM Forum, told CNBC. “But regulation is only one piece of the puzzle.”
    “In the last 12 months we’ve seen a new energy from our members in Europe to get on with the huge task to transform themselves: simplifying, modernizing and automating their operations and legacy tech.”
    “This will make it possible to rapidly adapt to new customer needs and market realities, whether building new partnerships, undergoing M&A or delayering integrated businesses – all trends we expect to reach new heights over the next 24 months,” he added. More

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    China’s ‘Netflix’ iQiyi is set to open a theme park with virtual reality based on its own shows

    Chinese videostreaming platform iQiyi said Thursday it plans to open its first theme park this year, based on characters from its own shows.
    The forthcoming “iQiyi Land” is set to open in the city of Yangzhou in Jiangsu province, just over two hours from Shanghai by high-speed train.
    Legoland is opening its first China resort in Shanghai this summer, while Warner Bros. Discovery last month announced it is developing a “Harry Potter Studio Tour” in Shanghai with a projected opening of 2027.

    Chinese videostreaming company iQiyi announced March 13, 2025, it will open a theme park later in the year in Yangzhou, Jiangsu province.

    BEIJING — Chinese videostreaming platform iQiyi announced Thursday it plans later this year to open its first full-fledged theme park in China based on characters from its own shows.
    The forthcoming “iQiyi Land” is set to open in the city of Yangzhou in Jiangsu province, just over two hours from Shanghai by high-speed train. The company said the theme park will include seven types of attractions — including immersive theater, interactive film sets and experiences that use virtual reality — largely based on characters from iQiyi’s films and television dramas.

    It’s the latest company to bet that local consumers will spend more on experiences, despite tepid retail sales.
    Legoland is opening its first China resort in Shanghai this summer, while Warner Bros. Discovery last month announced it is opening a “Harry Potter Studio Tour” in 2027 in the same city. Chinese toy company Pop Mart opened a themed “Pop Land” in Beijing in late 2023, which has become the most popular attraction in the city’s business district, according to rankings from Dianping.

    IQiyi’s planned theme park builds on the company’s recent success with VR-specific attractions.
    The company has developed technology that combines VR headsets with moving platforms — giving visitors the impression that they are walking, riding on boats or sitting in a flying carriage. That means a theme park-like experience can be compressed into a space as small as a square just 57 feet long.
    Since iQiyi’s first dedicated VR experience opened in Shanghai two years ago, the company has worked with business partners to open more than 40 locations in at least 20 Chinese cities. One VR experience based on iQiyi’s “Strange Tales of the Tang Dynasty: To the West” gained more than 100,000 visitors in its first year of opening, according to the company.

    VR, gaming and artificial intelligence have enabled the emergence of “distributed” theme parks that are more compact, interactive and able to iterate content more quickly, Hang Zhang, senior vice president at iQiyi, said in a Chinese statement translated by CNBC.
    He said some of the VR-based experiences will first be released in iQiyi Land before they’re launched in other venues.
    IQiyi shares closed nearly 3% higher in U.S. trading Thursday and are up 14% for the year so far.

    Post-Covid growth

    Mainland China’s theme park revenue is forecast to exceed 480 billion yuan ($67 billion) this year, with more than 500 million visitors, according to data shared by the International Association of Amusement Parks and Attractions. That would be up exponentially from 30.39 billion yuan recorded across 86 major theme parks in mainland China in 2023, just after Covid-19 pandemic controls ended, the data showed.
    Parks are increasingly using a mix of virtual reality to engage guests, while using AI tools to manage crowds, the association said. It added that parks are also combining global intellectual property franchises with domestic narratives in China.
    The association announced Wednesday that the head of Disney Parks International would speak at its Asia expo this summer in Shanghai.
    Disney, whose Disneyland in Shanghai opened in 2016, reported a 28% year-on-year increase in international parks and experiences operating income in the quarter ended Dec. 28, in contrast with a 5% decline in the U.S.
    Comcast, whose Universal Studios Beijing opened in 2021, said higher revenue at its international theme parks offset lower guest attendance at its U.S. parks in the fourth quarter.

    A tough environment

    Tourism has been a rare bright spot in China’s otherwise lackluster consumer market. The consumer price index, an indicator of domestic demand, rose by just 0.2% last year while the tourism component increased by 3.5%.
    China’s plan to boost consumption this year called specifically for developing the experience economy. IQiyi has previously worked with a local tourism board to produce a television drama set in a remote part of China, drawing visitors.
    However, competition in content remains fierce. IQiyi reported an 8% drop in 2024 revenue to 29.23 billion yuan, reversing a 10% increase the prior year.
    Theme park projects can also face delays.
    A Legoland in western China’s Sichuan province was originally scheduled to open by 2023. When CNBC contacted operator Merlin Entertainments about the project, the company only emphasized the summer opening of Legoland in Shanghai this summer.
    Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC.
    Clarification: This story was updated to reflect the correct title of the iQiyi drama, “Strange Tales of the Tang Dynasty: To the West.” A previous version was based on a provided translation, which was inaccurate. More

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    Ulta issues weak guidance, citing consumer uncertainty, rising competition and company missteps

    Ulta beat Wall Street’s quarterly expectations on the top and bottom lines, but issued weak guidance for the year ahead.
    The beauty company is the latest retailer to issue lackluster guidance as consumer confidence slides and tariff fears weigh on spending.

    An exterior view of an Ulta Beauty store at the Monroe Marketplace Shopping Center. 
    Paul Weaver | SOPA Images | Lightrocket | Getty Images

    Ulta Beauty on Thursday issued weak guidance for the year ahead as it navigates a series of internal missteps, rising competition and what it called “consumer uncertainty.”
    The retailer, which appointed Kecia Steelman as its new CEO in January, said it’s expecting comparable sales to be flat or grow 1% in 2025, while analysts had anticipated they would rise by 1.2%, according to StreetAccount. 

    It’s expecting full-year earnings to be between $22.50 and $22.90, lower than expectations of $23.47, according to LSEG. 
    Ulta is the latest company to forecast a rocky year ahead. While it factored uncertain consumer spending into its guidance, the retailer is also navigating a series of company-specific challenges and views 2025 as a transition year. Fixing those issues will cost money, which is part of the reason why it’s expecting profits to be lower than Wall Street anticipated in the year ahead.
    “I’ve shared our plan to make important guest-facing investments, which are necessary to improve our competitiveness and re-accelerate long term share growth,” said Steelman on a call with analysts. “These investments will pressure profitability in 2025 but we believe they are critical to driving long-term sustainable growth in a competitive, innovative category.”
    Shares rose 6% in extended trading.
    Here’s how the beauty retailer did in its fiscal fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

    Earnings per share: $8.46 vs. $7.12 expected
    Revenue: $3.49 billion vs. $3.46 billion expected

    The company’s reported net income for the three-month period that ended Feb. 1 was $393 million, or $8.46 per share, compared with $394 million, or $8.08 per share, a year earlier.
    Sales dropped to $3.49 billion, down about 2% from $3.55 billion a year earlier. Like other retailers, Ulta benefited from an extra selling week in the year-ago period, which has negatively skewed results. 
    Beauty has been one of retail’s brightest spots over the last couple of years, but Ulta has fallen behind due to a series of self-inflicted challenges. The company’s business has become more complex as it has grown, and Ulta has stumbled when launching new fulfillment choices, such as buy online, pickup in store, same-day delivery and ship from store.
    “As a result, our in-store presentation and guest experience today are not as strong as we would like,” said Steelman. “These are opportunities well within our control.”
    In January, Ulta announced that its longtime CEO Dave Kimbell would be replaced by its then-Chief Operating Officer Steelman, who has been with the retailer for more than a decade. Her experience as an operations guru makes her well suited to tackle some of the execution issues that have plagued Ulta.
    During her first earnings call as CEO, Steelman was candid about what Ulta is doing right and what it’s doing wrong. She said the company will spend the next year resetting its business and working to take back the market share that it has lost.
    “The competitive environment in beauty has never been more intense,” said Steelman. “For the first time, we lost market share in the beauty category in 2024.”
    During Ulta’s holiday quarter, comparable sales climbed 1.5%, beating expectations of 0.8% growth, according to StreetAccount. Customers spent more during the quarter, resulting in a 3% rise in average ticket, but fewer shoppers came to Ulta’s stores to buy beauty products. Transactions during the quarter decreased by 1.4%. 
    Part of that is likely because so many more companies are expanding into beauty. Not only does it compete with rival Sephora, but also mass retailers like Macy’s, Walmart and Amazon have made beauty a cornerstone of their strategies and have all expanded their selections of makeup and skincare products.
    Last year, Ulta warned of a cooling beauty market, but companies like E.l.f. Beauty and Oddity didn’t see similar dynamics, and beauty sales remained strong at retailers like Macy’s and Target. 
    In the meantime, Ulta has focused on boosting profitability. It managed to grow earnings during the quarter, even with one less selling week. More

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    DC housing market shows signs of cracks amid mass federal layoffs

    Inventory gains in the region, which includes the District as well as Maryland and Virginia suburbs, accelerated in January and February.
    Last week, active listings were up 56% compared with the same week one year ago.
    New listings in the D.C. area were 24% higher year-over-year last week.

    The supply of homes for sale across the nation always rises ahead of the busy spring market, but the Washington, D.C., metropolitan area is seeing an outsized increase, according to Realtor.com.
    Inventory gains in the region, which includes the District as well as Maryland and Virginia suburbs, began to accelerate in January and February, up 35.9% and 41% year over year, respectively. Inventory in the area from June to December had already been 20% to 30% higher than the previous year, but the increases accelerated even further in recent months.

    As of last week, active listings were up 56% compared with the same week one year ago.
    “The adjustment period following federal layoffs and funding cuts has likely put some Washington D.C. home searches on hold, both for those whose jobs have been directly impacted and those who may be concerned about what’s ahead, and the data hints at these challenges,” wrote Danielle Hale, chief economist for Realtor.com, in a release.
    For comparison, active listings nationally were up 28% last week compared with the same week in 2024, according to Realtor.com, coinciding with a decline in mortgage rates. The average rate on the popular 30-year fixed loan was around 7.25% in mid-January but fell steadily to 6.82% now, according to Mortgage News Daily.

    This photo taken on Feb. 14, 2023, shows a house for sale in Washington, D.C.
    Aaron Schwartz | Xinhua News Agency | Getty Images

    The inventory gains in the D.C. area are not all due to people putting their homes on the market. New listings rose, but by much less than overall inventory, so the increase in overall supply is a combination of new listings and slowing buyer activity.
    New listings were 24% higher year over year last week, contributing to the increase in for-sale inventory and dropping median days on market, Realtor.com found. New listings year to date are 11.9% above the year-ago level, but still 12.8% below where they were in 2022, according to Hale.

    There also may be an outsized bump in inventory due to newly built condominiums and townhomes coming on the market now. Construction in the D.C. area has been very active over the past few years. The share of new construction listings is tilted much more toward condos than it was five years ago.
    As for prices, the median list price in the D.C. metro area was down 1.6% year over year last week. For context, in the fourth quarter of last year, that median list price was down 1.5% annually.
    The median list price nationally, as of last week, was down 0.2%, though it is heavily skewed by the type of home for sale. Controlling for the size of home, the median list price per square foot increased 1.2% annually, which means there are more smaller or lower-end homes on the market compared to last year. 
    “While D.C. has the largest share of federal workers in the country, other highly federally employed markets could see similar shifts in the coming weeks or months,” said Hale. “While I expect many households will choose to stay in the area and pivot to find new job opportunities, some will likely choose to leave and retire or find a job elsewhere.”

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    Dollar General CEO warns consumers are cash-strapped, and says 2025 won’t be better

    Dollar General’s CEO said customers’ financial situations have worsened over the past year due to inflation.
    CEO Todd Vasos said the company doesn’t expect the macro environment to improve in 2025.
    Tariffs and potential changes to government entitlement programs present potential further headwinds for core customers, according to Vasos.

    The exterior of a Dollar General convenience store on August 30, 2024 in Austin, Texas.
    Brandon Bell | Getty Images

    Dollar General CEO Todd Vasos said on Thursday that inflation continues to hurt the discounter’s customers and that the macroeconomic environment won’t improve this year.
    On the company’s fourth-quarter earnings call, Vasos said customers are expecting value and convenience “more than ever” from the dollar-store chain.

    “Our customers continue to report that their financial situation has worsened over the last year, as they have been negatively impacted by ongoing inflation. Many of our customers report they only have enough money for basic essentials, with some noting that they have had to sacrifice even on the necessities,” Vasos said. “As we enter 2025, we are not anticipating improvement in the macro environment, particularly for our core customer.”
    Dollar General’s core consumer is “always strained” due to their economic status, but also resourceful, Vasos said.
    “We’ve started to see where [our customer is] getting her sea legs, if you will, on the additional inflation that’s been very sticky out there, and she’s starting to understand her budgets even more,” Vasos said.
    Part of the uncertainty, Vasos said, stems from the potential impact of President Donald Trump’s tariffs on the consumer.
    When Trump imposed tariffs during his first term in office in 2018 and 2019, Dollar General had to raise some prices in line with others in the industry, Vasos said. But the general store was able to mitigate the impact back then and is “well positioned” to do so again this year, he said.

    “Given the already stressed financial condition of our core customer, we are closely monitoring these and any other potential economic headwinds, including any changes to government entitlement programs,” Vasos said.
    CFO Kelly Dilts said the company’s 2025 guidance factors in continued economic pressure on the consumer, but does not account for further changes to tariff policy or government initiatives like the Supplemental Nutrition Assistance Program, which subsidizes food for low-income Americans.
    For the fourth-quarter, Dollar General said same-store sales growth of 1.2% was driven entirely by 2.3% growth in average transaction. Customer traffic fell 1.1% during the period, “impacted by ongoing financial pressures of our core consumer,” Vasos said.
    Alongside its fourth-quarter earnings, Dollar General said Thursday it would close 96 Dollar General stores and 45 Popshelf stores and will convert six other Popshelf stores into flagship banner locations this year. Popshelf primarily serves higher-income shoppers with lower-priced products.
    Shares of Dollar General closed up nearly 7% on Thursday. More

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    Spirit Airlines, fresh from bankruptcy, is ready to take on the new Southwest, CEO says

    Spirit Airlines just exited bankruptcy, meeting its target of emerging in the first quarter.
    The low-cost airline competes in some of Southwest’s markets.
    Executives at Delta and United also see a chance to grab some Southwest customers after the carrier announced it would start charging for checked bags.

    A Spirit Airlines Airbus A320 taxis at Los Angeles International Airport after arriving from Boston on September 1, 2024 in Los Angeles, California.
    Kevin Carter | Getty Images News | Getty Images

    Spirit Airlines is out of bankruptcy, hitting its target to emerge in the first quarter, after a crippling few years. CEO Ted Christie says the carrier is leaner and ready to take on competitors, including rival Southwest Airlines.
    Earlier this week, Southwest shocked customers by announcing it will start charging for checked bags for the first time in its half-century of flying, a huge strategy move for the largest domestic U.S. carrier. (There are some exceptions to Southwest’s new bag rules, which take effect in late May.)

    “I think it’s going to be painful for a little bit as they find their footing, and we’re going to take advantage of that,” Spirit’s Christie said in an interview Thursday.
    Southwest had been a standout in the U.S. by offering all customers two free checked bags, a perk that has endured recessions, spikes in fuel prices and other crises while most rivals introduced bag fees and raised them every few years.
    Spirit Airlines, on the other hand, made a la carte pricing common in the U.S., with fees for seat assignments, checked bags and other add-ons. It’s a strategy most large airlines, except for Southwest, have copied in one form or another.
    As Southwest starts charging for bags and introduces its first basic economy class, which doesn’t include a seat assignment or allow free changes, Spirit could possibly win over customers, Christie said.
    Southwest said it would get rid of its single-class open seating model last year.

    “There at least was an audience of people who were intentionally selecting and flying Southwest because they felt that it was easy. They knew they were going to get two bags,” Christie said. “Now that that’s no longer the case, it’s easy to say that they’re going to widen their aperture and they’re now going to look around.”
    Spirit is far smaller than Southwest and even smaller than it was last year, but it competes with the airline in cities like Kansas City, Missouri; Nashville, Tennessee; Columbus, Ohio; and Milwaukee. If customers look on travel sites like Expedia, where Southwest is a new entrant, Spirit’s tickets could be cheaper and appear higher in results, Christie said.
    Other airline executives have also said they expect to win over some Southwest customers.
    Delta Air Lines President Glen Hauenstein said at a JPMorgan industry conference Tuesday that there are consumers who choose Southwest based on its free bag perk “and now those customers are up for grabs.”
    Spirit, for its part, has recently been offering more ticket bundles that include things like seat assignments and luggage.
    The carrier is now focused on returning to profitability. It posted a net loss of over $1.2 billion last year, more than double its loss in 2023 as it grappled with grounded jets because of a Pratt & Whitney engine recall, higher costs, more domestic competition and a failed acquisition by JetBlue Airways.
    Spirit has rejected multiple recent merger attempts by fellow budget carrier Frontier Airlines. Christie said Thursday that nothing is “off the table” and that a fifth-largest airline in the U.S. as a low-cost carrier makes sense, but that the airline is focused on stabilizing itself after bankruptcy.
    Through its restructuring process, which started in November, Spirit said it reduced its debt by about $795 million. The transaction converted debt into equity for major creditors. The carrier also received a $350 million equity infusion.
    Spirit plans to relist its shares on a stock exchange but hasn’t set a date yet.

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    Comcast expands partnership with Olympics, extends media rights through 2036

    Comcast and the International Olympic Committee announced a $3 billion deal to continue their broadcasting arrangement.
    The partnership grants Comcast the media rights for the Olympics through 2036.
    The moves comes as the company looks to expand its live sports coverage on streaming service Peacock.

    Snoop Dogg attends the Artistic Gymnastics Women’s Qualification on day two of the 2024 Paris Olympic Games at Bercy Arena in Paris on July 28, 2024.
    Arturo Holmes | Getty Images Sport | Getty Images

    Comcast and the International Olympic Committee have agreed on a new deal that expands the company’s broadcast reach and extends its media rights for the Olympic Games through 2036.
    In a Thursday news release, the committee said the roughly $3 billion agreement elevates Comcast from a media rights holder to a “strategic partner.” Comcast and the organization will collaborate on broadcast infrastructure, in-venue distribution and U.S. digital advertising, among other items, the IOC said.

    “This agreement with Comcast is groundbreaking because it goes far beyond the traditional media rights agreement which we have had for many years with our valued partner,” IOC President Thomas Bach said in the announcement. “The media landscape is evolving rapidly and, by partnering with one of the world’s leading media and technology companies, we will ensure that fans in the United States are able to experience the Olympic Games like never before.”
    Comcast’s previous agreement with the Olympic committee would have terminated after the 2032 Olympics in Brisbane, Australia. The new deal grants Comcast the rights to broadcast the 2034 Winter Olympics in Salt Lake City as well as the 2036 Summer Olympics in a not-yet-determined city.
    “We live in a time when technology is driving faster and more fundamental transformation than we’ve seen in decades. This groundbreaking, new, long-term partnership between Comcast NBCUniversal and the International Olympic Committee not only recognises this dynamic but anticipates that it will accelerate,” Comcast Chairman and CEO Brian Roberts said.
    The deal comes as Comcast and its NBCUniversal unit aim to use live sports to drive subscriptions to the streaming service Peacock. NBC will spend about $2.5 billion per year to carry a package of NBA games starting next season.
    During last year’s Summer Olympics in Paris, the push toward Olympics coverage on Peacock appeared to pay off for the company. Over 30 million people watched the Olympics on NBC’s television and streaming platforms, and advertising revenue came in at a record $1.2 billion.
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC. More