Raphael Stevens

McDonald’s shares fell in extended trading after the CDC said an E. coli outbreak was linked to the chain’s Quarter Pounder burgers.
The outbreak has led to 10 hospitalizations and one death, the CDC said.
The restaurant chain said initial findings from the investigation show some of the illnesses may be linked to onions that are used in the Quarter Pounder.

A McDonald’s located on Route 66 in Azusa, California, on April 1, 2024.
Robert Gauthier | Los Angeles Times | Getty Images

McDonald’s shares dropped in extended trading Tuesday after the Centers for Disease Control and Prevention said an E. coli outbreak linked to McDonald’s Quarter Pounder burgers has led to 10 hospitalizations and one death.
The agency said 49 cases have been reported in 10 states between Sept. 27 and Oct. 11, with most of the illnesses in Colorado and Nebraska. “Most” sick people reported eating a McDonald’s Quarter Pounder, the CDC added.

One of the patients developed hemolytic uremic syndrome, which is a serious condition that can cause kidney failure. An older adult in Colorado died. 
McDonald’s shares dropped about 7% in after-hours trading Tuesday.
In a statement Tuesday, McDonald’s said it is taking “swift and decisive action” following the E. Coli outbreak in certain states.
The company said initial findings from the ongoing investigation show that some of the illnesses may be linked to slivered onions — or fresh onions sliced into thin shapes — that are used in the Quarter Pounder and sourced by a single supplier that serves three distribution centers. McDonald’s has instructed all local restaurants to remove slivered onions from their supply and has paused the distribution of that ingredient in the affected area.

Arrows pointing outwards

This map shows where the 49 people in this E. coli outbreak live.
Source: CDC

Quarter Pounder hamburgers will be temporarily unavailable in several Western states, including Colorado, Kansas, Utah and Wyoming, and portions of other states, McDonald’s said. It added that it was working with suppliers to replenish ingredients.

The majority of states and menu items are not affected by the outbreak, McDonald’s USA President Joe Erlinger said in a video. The company’s other beef products, including the cheeseburger, hamburger, Big Mac, McDouble and the double cheeseburger, are not affected, he added. Those sandwiches use a different type of onion product.
“We are working quickly to return our full menu in these states as soon as possible,” Erlinger said. “I hope these steps demonstrate McDonald’s commitment to food safety.”
Quarter Pounder hamburgers are a core menu item for McDonald’s, raking in billions of dollars each year. In 2018, McDonald’s launched fresh beef for its Quarter Pounders across most of its U.S. stores.
The CDC said the number of people affected by the outbreak is “likely much higher” than what has been reported so far. The agency said that is because many people recover from an E. coli infection without testing for it or receiving medical care. It also typically takes three to four weeks to determine if a sick patient is part of an outbreak, the CDC added. 
E. coli refers to a group of bacteria found in the gut of nearly all people and animals. But some strains of the bacteria can cause mild to severe illness if a person eats contaminated food or drinks polluted water.
Symptoms, including stomach cramps, diarrhea and vomiting, usually start three to four days after swallowing the bacteria, according to the CDC. Most people recover without treatment after five to seven days.
There have been several past reported cases of E. coli at McDonald’s restaurants.
In 2022, at least six children developed symptoms consistent with E. coli poisoning after eating McDonald’s’ Chicken McNuggets Happy Meals in Ashland, Alabama. Four of the six children were admitted to a hospital after experiencing severe adverse effects.

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Starbucks released preliminary results for its fiscal fourth quarter and suspended its outlook for fiscal 2025.
The company’s same-store sales slid for the third consecutive quarter, fueled by a 10% tumble in traffic to its North American stores.
Starbucks also raised its quarterly dividend to “provide some certainty” to investors as it tries to turn around the business.

Starbucks cups are pictured on a counter in Manhattan, New York, on Feb. 16, 2022.
Carlo Allegri | Reuters

Starbucks on Tuesday posted preliminary quarterly results that showed its sales fell again as the coffee chain tries to execute a turnaround.
“Our fourth quarter performance makes it clear that we need to fundamentally change our strategy so we can get back to growth and that’s exactly what we are doing with our ‘Back to Starbucks’ plan,” CEO Brian Niccol said in a statement.

Niccol said he plans to share more details on the steps Starbucks is taking to turn around the business on the company’s earnings call, scheduled for Oct. 30. The coffee chain’s new CEO aims to reverse slowing demand for Starbucks’ drinks, starting with its largest market: the U.S.
Already, the CEO said the company is “fundamentally changing” its marketing by refocusing on all of its customers, not just members of its loyalty program. He added that Starbucks plans to simplify its “overly complex menu,” fix its pricing and make sure all of its drinks are handed directly to customers. All three of those goals have been top complaints from customers and baristas in recent years.
“We believe that our problems are very fixable and that we have significant strengths to build on,” Niccol said in prepared remarks released on the company’s website on Tuesday.
The company’s preliminary net sales fell 3% to $9.1 billion. It reported preliminary adjusted earnings per share of 80 cents.
Analysts surveyed by LSEG were expecting the company to report fiscal fourth-quarter earnings per share of $1.03 and revenue of $9.38 billion.

Shares of the company fell more than 3% in extended trading on the announcement.

Slumping sales

For the third consecutive quarter, Starbucks’ same-store sales fell. This quarter’s 7% decline in same-store sales was the company’s steepest drop since the Covid-19 pandemic.
The company blamed its soft sales on weaker demand in North America. In its home market, its same-store sales decreased 6%. Traffic tumbled 10%, despite increased investments in the business, such as more frequent promotions in its mobile app and an expanded range of product offerings.
In China, its second-largest market, same-store sales plummeted 14%. The company attributed the decline to competition in the country, which it said is altering consumer behavior and changing the company’s strategy for the market.
The company also suspended its fiscal 2025 outlook, citing the recent CEO transition and the “current state of the business.”
Despite the dismal quarter, the company increased its dividend from 57 cents to 61 cents per share.
“We want to amplify our confidence in the business, and provide some certainty as we drive our turnaround,” Chief Financial Officer Rachel Ruggeri said in a statement.
Ruggeri added that the company is developing a plan to turn around the business, but creating a strategy will take time.

A challenge for Niccol

The surprise announcement of the company’s preliminary results comes nearly two months ago after Niccol took the helm of the coffee giant. The CEO transition followed two quarters of falling sales for Starbucks and several activist investors building stakes in the company.
In the U.S., the chain has been losing its occasional customers, who have opted to save money instead of spending on its macchiatos and Refreshers. Starbucks’ business in China has also been struggling to recover since the pandemic, and the rise of cheaper local rivals such as Luckin Coffee and a more cautious consumer have dented sales in recent months.
Niccol joined Starbucks after six years as CEO of Chipotle. During his tenure at the fast-casual chain, he led the company through a turnaround after its foodborne illness crises, invested in its digital business and turned it into a top industry performer, even during the pandemic.
To curb Starbucks’ sales slump, Niccol plans to turn first to the company’s struggling U.S. business. In an open letter released during his first week on the job, he said he plans to focus on four areas of improvement: the barista experience, morning service, its cafes and the company’s branding.
Niccol has also been reshuffling the company’s executive ranks. On Friday, the company announced a former Chipotle executive, Tressie Lieberman, will be joining Starbucks as its global chief brand officer, a newly created position. Last month, Starbucks said its North American CEO Michael Conway would retire after just five months in the role. Niccol’s predecessor Laxman Narasimhan had appointed Conway before his ouster in August.
Shares of Starbucks are up 1% this year, as of Tuesday’s close. The company has a market cap of more than $109 billion.

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Peloton is partnering with Costco to sell its Bike+ in stores and online between Nov. 1 and Feb. 15.
Costco will offer Peloton’s Bike+ in 300 of its U.S. stores for $1,999, and on Costco.com for $2,199, compared to the typical price of $2,495.
The partnership comes as Peloton looks for fresh and profitable ways to reach new customers.

Peloton and Costco.
Shannon Stapleton | Reuters Justin Sullivan | Getty Images

Peloton’s stationary bikes will soon sell at Costco’s stores and on its website as the beleaguered fitness company looks for new ways to reach younger and affluent customers, Peloton is set to announce Tuesday.
Under the terms of the deal, Costco will offer Peloton’s Bike+ in 300 of its U.S. stores for $1,999, and on Costco.com for $2,199 between Nov. 1 and Feb. 15. It is a steep discount from the typical price of the Bike+, which is selling on Peloton’s website for $2,495. It is unclear how the price will compare to any holiday promotions Peloton plans to offer. 

The new partnership comes during a state of transition for Peloton, which is being led by two board members after its former CEO Barry McCarthy stepped down earlier this year.
Long focused on growth at all costs, Peloton has turned its sights to profitability and has had to become more creative as it tries to reach new users.
As sales fall and losses mount, Peloton is looking for cheaper ways to attract new customers. Costco is one way to get there, Dion Camp Sanders, Peloton’s chief emerging business officer, told CNBC in an interview. 
“We’ve been able to architect a deal with Costco that meets our needs with regard to profitable, sustainable unit economics, while at the same time delivering robust and clear value to Costco members,” said Camp Sanders. “We’ve structured this deal with Costco to both meet our needs for profitable, sustainable growth and getting us access to Costco’s very large net incremental audience.” 
Camp Sanders said Peloton’s partnership with Costco is only for a limited time because fitness is a seasonal category for the company, but Peloton hopes to keep building on the relationship and perhaps expand it to future locations both in the U.S. and abroad.

The deal with Costco gets Peloton onto the shelves of a retailer with a strong fan following and wealthier customers. The membership-based club has gained popularity as shoppers across all incomes prioritize value and try to get more for their money with bulk packs and private-label items.
As of Sept. 1, store traffic at Costco had increased 31% compared with the same period in pre-pandemic 2019, according to Placer.ai, an analytics company that estimates visits to locations based on smartphone data. 
Costco’s members are also getting younger. Those consumers prioritize health and wellness — and are willing to invest in it — in ways that older generations do not. 
About half of Costco’s new membership sign-ups last fiscal year came from people who were under 40 years old, and the average age of its 76 million members has fallen since the Covid-19 pandemic, Chief Financial Officer Gary Millerchip said on an earnings call in late September. 
According to Numerator, 36% of Costco’s customers have a household income of more than $125,000. Numerator has a panel of 150,000 U.S. consumers that is balanced to be representative of the country’s population.
Camp Sanders said Costco’s members “have the disposable income to be able to afford our premium products,” and their lifestyles align with what Peloton offers. 
“Many of Peloton’s members are affluent, they often have larger homes in the suburbs and they also have life situations where Peloton fits a clear need,” said Camp Sanders. “Many Costco members are juggling families, they maybe have a busy career … and they’ve got the space in their home” to build their own gyms, he continued. 
Costco’s Executive Vice President of Merchandising Claudine Adamo declined to comment to CNBC.
Peloton already sells its workout equipment through Amazon and Dick’s Sporting Goods, but has also been working to develop relationships with other companies that cater to similar customer bases. 
For example, hundreds of Hyatt Hotel properties have Peloton equipment on site. As of this month, hotel members can earn points for completing workouts on the Peloton Bike and Row during their stay. 
It also announced a deal with Truemed — the PayPal of the health savings account and flexible spending account world — that allows Peloton members to use pretax earnings to buy certain hardware products, including the Bike, Bike+ and Tread.

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GM easily outperformed Wall Street’s third-quarter earnings expectations, leading the Detroit automaker in raising key guidance targets for 2024.
GM now expects full-year adjusted EBIT of between $14 billion and $15 billion, or $10 and $10.50 a share, up from between $13 billion and $15 billion, or $9.50 and $10.50.
GM executives will host an earnings conference call at 8:30 a.m. ET.

DETROIT — General Motors easily outperformed Wall Street’s third-quarter earnings expectations, leading the Detroit automaker in raising key guidance targets for 2024.
Here’s how the company performed in the third quarter, compared with average estimates compiled by LSEG:

Earnings per share: $2.96 adjusted vs. $2.43 expected
Revenue: $48.76 billion vs. $44.59 billion expected

This marks the third time this year that GM has updated its guidance after beating Wall Street’s top- and bottom-line expectations, led by the automaker’s North American operations.
GM is now forecasting full-year adjusted earnings before interest and taxes of between $14 billion and $15 billion, or $10 and $10.50 a share, up from between $13 billion and $15 billion, or $9.50 and $10.50. It also raised its adjusted automotive free cash flow forecast to between $12.5 billion and $13.5 billion, up from $9.5 billion and $11.5 billion.
The automaker tightened its net income attributable to common stockholders, which excludes some dividend payouts, to between $10.4 billion and $11.1 billion, or $9.14 and $9.63 per share. That compared to its previous guidance of $10 billion to $11.4 billion, or $8.93 and $9.93.
GM CFO Paul Jacobson warned earnings will be lower during the fourth quarter, citing timing of truck production, seasonality, lower wholesale volumes and vehicle mix, including selling more electric vehicles.
Shares of GM were up roughly 2% during premarket trading Tuesday.

The automaker has topped Wall Street’s EPS estimates for nine consecutive quarters and revenue for eight straight quarters.
GM’s third-quarter results were assisted by continued strong pricing, offsetting losses in China and year-over-year cost increases of $200 million in labor and $700 million in warranty costs.
Jacobson said the company’s average transaction price per vehicle, which Wall Street has been monitoring for signs of weakening,  remained over $49,000 from July through September.
“The consumer has held up remarkably well for us,” he said during a media briefing. “Nothing we see has changed from where we’ve been for the last several quarters.”

Stock chart icon

GM, Ford and Stellantis stocks in 2024.

GM said revenue during the third quarter was up 10.5% from roughly $44 billion a year earlier. Its net income during the quarter rose slightly to $3 billion.
Jacobson noted some of the company’s third-quarter outperformance was assisted by the automaker pulling ahead some truck production from the fourth quarter, which represented a $400 million boost in adjusted earnings.
The company’s North American operations represented a disproportional amount of its earnings. They included adjusted earnings before interest and taxes of nearly $4 billion, up 12.9% from a year earlier. The results represented a 9.7% adjusted profit margin.
The North American results compared to a $137 million loss in China, where GM is attempting to restructure operations, and an 88.2% drop in adjusted earnings in its other international markets compared to a year earlier to $42 million.
GM’s financing arm reported a 7.3% decline in adjusted earnings to $687 million during the third quarter. The automaker’s embattled Cruise autonomous vehicle unit has lost roughly $1.3 billion through September, including a loss of $383 million during the third quarter.
The quarterly report comes just two weeks after a GM investor day in which the company indicated its earnings strength is expected to continue into next year. GM expects to share its full 2025 guidance in January.
Topics of interest for investors that were not addressed earlier this month include GM’s funding plans for its embattled Cruise autonomous vehicle unit, details on its China restructuring and any updates regarding its near-term electric vehicle sales and plans.
“We think we can turn it around,” Jacobson told CNBC’s Phil LeBeau on Tuesday regarding China. He said the automaker has several meetings scheduled with its Chinese partners regarding the restructuring, including cost cuts.
Shares of GM are up about 36% this year as of Monday’s close of $48.93. The stock has been boosted by billions of dollars in buybacks by GM, which have led to a 19% year-over-year reduction in outstanding shares.
This is developing news. Please check back for additional updates.

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Major League Soccer said it set a fresh regular season record with nearly 11.5 million fans attending games.
The growth comes a year after the league implemented a new club performance unit, led by Chris McGowan, which advises clubs on business strategies.
The league, which saw its regular season end this past weekend, also experienced more fan engagement on social media and notches record sponsorship revenue.

Lionel Messi of Inter Miami competes during a friendly match between Inter Miami and Newell’s Old Boys at DRV PNK Stadium in Fort Lauderdale, Florida on February 15, 2024. 
Arturo Jimenez | Anadolu | Getty Images

Major League Soccer scored several regular season records, including for attendance and sponsorship, thanks in part to international super star Lionel Messi — and corporate strategy.
MLS has been nabbing well-known athletes like Messi and Luis Suárez, and leaning on the growing popularity of the sport within the U.S. in a bid to solidify its fanbase after nearly three decades of league play. It’s even created a corporate team to help clubs implement new business strategies.

It appears to be paying off. Nearly 11.5 million people attended MLS matches during the regular season — which ended this past weekend — the most in its history, according to data from the league. That’s up 5% from last year, and 14% from 2022. Each match during the 2024 season averaged 23,234 attendees, the highest ever for the regular season.
While those stats pale in comparison to other U.S. professional sports leagues — the National Basketball Association had more than 22.5 million attendees during the 2023-2024 regular season, for example — MLS seems to be building momentum.
Last year, MLS’ Inter Miami signed Messi, which caused a surge in attendance, jersey and other product sales, and overall fanbase engagement. The halo effect from the Messi, often referred to as the greatest of all time, seems to have held even with Messi playing fewer games this season due to an injury.
This past weekend Inter Miami ended the season with 74 points, breaking the MLS record for most scored in a season, and Messi notched a hat trick for the first time with the U.S. league. The MLS postseason begins this week.

Fans with signs supporting Lionel Messi before the start a MLS League game between Inter Miami CF (1) and D.C.United (0) at the Chase Stadium on May 18th, 2024 in Fort Lauderdale, Florida, USA.
Simon M Bruty | Getty Images Sport | Getty Images

But it wasn’t just on-the-field talent that made the difference.

This was the first full season that Chris McGowan served as executive vice president and chief club performance officer at the league since joining in June 2023. McGowan was hired to lead the new unit, which serves to advise and develop strategies to help clubs perform better, particularly on the business side.
While most of this season was focused on building out McGowan’s team, he said they also developed a strategic plan when it comes to identifying focus areas and creating relationships with clubs. McGowan’s role is akin to a consultant, making suggestions that the teams can choose to implement or not.
For example, McGowan and his unit helped the New York Red Bulls this season “with some decisions on premium seating that they’re going to launch in their stadium.”
“We foster continued growth by being a great resource for clubs in areas like quickly and efficiently sharing best practices,” said McGowan. “Being able to quickly get information for clubs to make business decisions … these are things that maybe weren’t happening as systematically and as efficiently as they are now.”

Kicking off new records

Fans of Nashville SC cheer for their team prior to the match at GEODIS Park on February 25, 2024 in Nashville, Tennessee. 
Johnnie Izquierdo | Getty Images Sport | Getty Images

The bigger audience is drawing bigger sponsorship dollars.
The league signed 18 new sponsorship partners this season between MLS and Soccer United Marketing, or SUM, the commercial arm of MLS. Sponsorship revenue for the league and SUM was up 13% year to date, and sponsorship revenue at the club level was also up 13% for the same period.
League- and club-level sponsorship revenue both reached records.
Messi’s Inter Miami jersey continued to be a fan favorite, ranking as the highest-selling jersey in the league. It was also No. 1 globally for Adidas in jersey sales of individual players, according to MLS.
Meanwhile, its social media following grew faster than any other major men’s North American sports league on TikTok, Instagram and YouTube, according to the league. On TikTok, followers were up 26% since the beginning of the year. On YouTube, followers were up 21%, and on Instagram, they were up 10%.
Inter Miami led the league as the most followed North American sports team on TikTok with 9.4 million followers, according to MLS. It was the third most followed North American sports team on Instagram with 17.2 million followers.
Like other sports leagues in the U.S., MLS has been focusing on growing its audience and presence internationally. Earlier this month it signed an agreement with German digital media platform OneFootball to provide highlights, stats and other content to a global audience.
When it comes to TV viewership — a marquee stat for most other professional sports leagues in the U.S. — MLS is in something of a league of its own. The league has an exclusive media rights deal with Apple, meaning most of its matches are only available through MLS Season Pass on Apple TV, a separate subscription alongside the Apple TV+ streaming service.
Viewership data isn’t available for MLS Season Pass, but Apple executives have said on public calls that the audience has risen since Messi joined the league.

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Walmart said Tuesday that it will start delivering prescriptions to customers’ doorsteps.
The discounter will start with six states, but plans to offer prescription delivery in 49 states by the end of January.
Walmart’s move comes as Walgreens and CVS shutter stores and try to turn around their struggling businesses.

Walmart will start to deliver prescriptions to customers’ doorsteps. Customers can also get additional items dropped off along with medications, such as groceries.
Courtesy of Walmart

As CVS and Walgreens shutter hundreds of stores nationwide to shore up profits and investor sentiment, Walmart said Tuesday that it is offering a new option for customers: Delivering prescriptions to their doorsteps.
The nation’s largest retailer said deliveries are now available in six states: Arkansas, Missouri, New York, Nevada, South Carolina and Wisconsin. The company said in a news release that it expects to deliver prescriptions in 49 states by the end of January. Prescription deliveries will not be available in North Dakota due to state laws, Walmart said.

The prescription delivery service is another example of how Walmart is trying to outmatch competitors on convenience along with low prices. With the new service, customers can get a mix of items dropped off during the same delivery, such as a box of tissues, blanket or chicken noodle soup.
Walmart’s new delivery offering could be another blow to drugstore chains, which are falling out of favor with consumers in a trend that has hit their profits and stock prices and forced them to reconsider their strategies. Still, it is unclear how much market share Walmart could win from CVS and Walgreens, both of which offer same-day, one-day and two-day prescription deliveries.
Tom Ward, chief e-commerce officer for Walmart U.S., said the company added pharmacy deliveries because of shopper demand.
“This is actually the number one service requested by our customers,” he said.
He said Walmart tested the deliveries in several states and saw that customers took advantage of getting a mix of items, including the prescription, in a single delivery.

Walmart’s delivery service will be available for new prescriptions and refills, the company said. It will cost $9.95 for a delivery, the standard price for Walmart doorstep deliveries, but will be free for members of Walmart+, the company’s membership program.
Health insurance plans will be applied to the transaction, like they would in the store, the company said.
The deliveries will come with a few more safety steps than Walmart’s other deliveries, the company said: Medications will be put into tamper-evident packaging. Customers can track orders in real time through Walmart’s app or website and get a photo in the app or by email when the prescription is delivered. And when a customer orders a new prescription and chooses delivery, they are prompted to do a consultation with the pharmacy by phone.
Most of Walmart’s annual revenue in the U.S. – nearly 60% – comes from groceries, but health and wellness is a growing category for the company, according to the retailer’s most recent annual filing for the fiscal year that ended Jan. 31. Health and wellness accounts for about 12% of its annual revenue in the U.S. It includes pharmacy, over-the-counter drugs and other medical products, optical services and other clinical services.

A new challenge for drugstores

As of Monday’s close, shares of Walmart were up around 54% for the year. Meanwhile, shares of CVS were down roughly 26% so far this year, while shares of Walgreens were down nearly 60%.
CVS is the top U.S. pharmacy in terms of prescription drug revenue, holding more than 25% of the market share in 2023, according to Statista data released in March. Walgreens trailed behind with nearly 15% of that share last year, while Walmart held just 5% of that share.
CVS and Walgreens are grappling with falling reimbursement rates for prescription drugs. Inflation, softer consumer spending and competition from Amazon, big-box retailers and grocery stores are making it difficult for them to turn a profit at the front of the store, which carries cleaning supplies, beauty products and pantry staples, among other items.
CVS CEO Karen Lynch left the company and was replaced by David Joyner last week, as CVS faces pressure from Wall Street and, more recently, an activist investor to turn around its business. On top of the leadership shakeup, CVS plans to cut $2 billion in expenses over several years. That includes slashing less than 1% of its workforce, or roughly 2,900 jobs, on the corporate side of its business.
The company is also wrapping up a three-year plan to close 900 of its stores, with 851 locations closed as of August.
Walgreens is similarly cutting costs, announcing last week that it will close roughly 1,200 stores over the next three years, which includes 500 in fiscal 2025 alone. The chain has around 8,700 locations in the U.S., a quarter of which it says are unprofitable.
Walmart has faced its own financial challenges on the health-care side of the business. The discounter planned to bring its low-price spin to health care by opening clinics that offered doctor, dentist and therapy appointments for less.
Yet in the spring, Walmart shuttered all of the clinics, saying in a news release at the time that it couldn’t operate a profitable business because of “the challenging reimbursement environment and escalating operating costs.” More