Raphael Stevens

In this articleCMGChipotle restaurant workers fill orders for customers.Getty ImagesChipotle Mexican Grill’s margins could take a hit from the predicted decline in avocado shipments next quarter, according to Truist analyst Jake Bartlett.The Hass Avocado Board is forecasting a 5.8% decline in avocado shipments during the third quarter compared with last year. A smaller supply of avocados could cause prices to spike and make it more expensive for Chipotle to whip up its guacamole.Bartlett estimated in a Wednesday note to clients that avocados account for only 5% to 10% of Chipotle’s cost of goods sold, but they can still have a significant impact on its margins. He is forecasting that a 10% spike in the price of an avocado could drag down earnings by 10 to 12 cents per share in the third quarter.In a statement to CNBC, CFO Jack Hartung said that the company has diversified its avocado sourcing over the last two years, so it expects less of an impact than industry projections in the third quarter.By now, the burrito chain is very familiar with spiking avocado prices. Hartung told analysts on the company’s first-quarter earnings call that the company is seeing a seasonal shift every year now.The summer months typically usher in surging prices for avocados because Mexico, the top supplier of them to the U.S., usually ships fewer during those months. Peru, the second-highest supplier, usually sees its avocado shipments rise during the summer, thanks to reversed seasons in the Southern Hemisphere, but its production typically isn’t enough to satiate American consumers. California grows about 12% of the supply.So far, 2021 has been a rocky road for avocado prices. They fell 26% in the first quarter due to higher shipments from Mexico and rose 4% in the second quarter, according to Bartlett. As of Friday, U.S. retail prices for the Hass variety were up 6% to $1.19, based on USDA data.Chipotle has already raised prices this year. Earlier in June, executives said menu prices have risen about 4% to cover the cost of raising wages for its workers. Hartung said the company is monitoring rising food costs but no further increases are planned at that time.Shares of Chipotle were up modestly Wednesday afternoon. The stock is up 5% this year, giving the company a market value of $42 billion. More

White House chief medical advisor Dr. Anthony Fauci said Wednesday the delta variant now accounts for roughly 20% of newly diagnosed cases in the U.S. and will become the dominant Covid strain in the nation in a matter of weeks.”It just exploded in the U.K. It went from a minor variant to now more than 90% of the isolates in the U.K.,” Fauci said on NBC’s “TODAY” show. Fauci said the variant has a doubling time of about two weeks and currently accounts for 20% of the isolates in the U.S., which are newly diagnosed infections. “So you would expect, just the doubling time, you know, in several weeks to a month or so it’s going to be quite dominant, that’s the sobering news.”The variant, which first emerged in India, has quickly swept across the globe. World Health Organization officials said Monday that delta has been found in at least 92 countries. Dr. Mike Ryan, head of WHO’s emergencies programs, said the variant is the fastest and fittest coronavirus strain yet, and it will “pick off” the most vulnerable people, especially in places with low Covid-19 vaccination rates.At a White House Covid briefing Tuesday, Fauci called the variant the greatest threat to U.S. efforts to contain the pandemic. Fauci said the current vaccines in the U.S. are effective at protecting most people against the delta and other variants. CDC Director Dr. Rochelle Walensky said the delta variant is “hyper” transmissible, and she urged people to get vaccinated.Studies suggest it is around 60% more transmissible than the alpha variant that emerged in the U.K. last fall and was already more contagious than the original strain that emerged from Wuhan, China, in late 2019.Dr. Barbara Taylor, an associate professor of infectious diseases at the University of Texas Health Science Center at San Antonio, said she’s worried the U.S. will likely see a lot of the delta variant in the summer and fall.”We’re all pretty concerned about it,” she said. “It looks like it’s more transmissible, it looks like it can reinfect people who’ve already had Covid. It looks like it causes more severe disease and in some settings, it appears it has increased mortality.”She said it’s especially worrisome for people who haven’t been vaccinated yet and adds “a lot of urgency” to vaccination efforts both in the U.S. and globally.”When you think about Texas where we’ve had wide variations in vaccinations between urban and rural areas and have had issues with both vaccine access and uptake, it means a lot of our community is at risk to a variant that appears to be more transmissible and severe,” she said.President Joe Biden said last week the variant was especially dangerous for younger people who have the lowest vaccination rates. As of Friday, the variant accounted for 10% of all new cases in the U.S., up from 6% the week before.”It is a variant that is more easily transmissible, potentially deadlier and particularly dangerous for young people,” he said Friday.The U.S. has vaccinated 177.6 million people with at least one dose, roughly 53% of the population, according to data compiled by the Centers for Disease Control and Prevention. Just 13.6% of 18-to-24-year-olds have had at least one vaccine dose in the U.S., compared with 26% of people ages 50 to 64, the data shows. More

In this articleCMCSAVin Diesel stars as Dominic Toretto in Universal’s “F9.”UniversalAfter more than a year of delays, Universal’s “F9” is finally cruising into domestic theaters.The ninth installment of the Fast and Furious film franchise, “F9” debuted internationally last month, tallying more than $300 million in ticket sales, including more than $200 million in China.North American theater owners are hoping that success will be replicated stateside after the film debuts this weekend in more than 4,000 domestic theaters.While the previous film, “The Fate of the Furious,” garnered nearly $100 million during its opening weekend, Universal is more conservative with its estimates for the debut of “F9.” The studio anticipates around $60 million in ticket sales over the three-day spread, which would be the highest haul of any film released in the wake of the pandemic.This would be on pace with what “Hobbs and Shaw,” a Fast and Furious spinoff, generated during its domestic opening in 2019.”Any movie that opens with more than $40 million, that’s a good number,” said Paul Dergarabedian, senior media analyst at Comscore.So far, “A Quiet Place Part II” holds the record for highest pandemic opening with just under $50 million. “Godzilla vs. Kong” tallied $32.2 million during its opening weekend in April, and “Cruella” took in $37.4 million when it was released in May.”F9″ is currently outpacing “A Quiet Place Part II” presales during the same period, Fandango told CNBC.”We’ve had a solid flow of great product since May 28 and that momentum going into the release of F9 looks to provide it with a pandemic record opening,” said Jeff Kaufman, senior vice president of film at Malco Theatres. “The series is a great one and this particular film is excellent in both execution and entertainment value. It will excite everyone. Overseas crowds have already responded in a positive way and we look to see the same reaction here.””F9” arrives in theaters at a time when Covid-related restrictions are loosening and more theaters are opening to the public.As vaccination rates continue to rise and the number of coronavirus cases decline consumer confidence in returning to movie theaters has spiked. These audiences are also being exposed to fresh movie marketing on the big screen, which could entice them to return for future releases — particularly movies such as “F9,” which is only available in theaters and not being released on streaming until a later date.”Seating capacity limits and a general caution among some audiences remain important factors to weigh in all box office expectations right now,” said Shawn Robbins, chief analyst at Boxoffice.com. “I’m also keeping in mind that this particular sequel was expected to be hit by some franchise fatigue long before the pandemic caused its multiple delays.”Over the last decade, these franchise films have become increasingly popular with international audiences, pulling in the majority of their ticket sales outside the U.S. and Canada. In fact, 2017’s “Fate of the Furious” tallied only $226 million domestically but sold more than $1 billion in tickets internationally, according to data from Comscore.In recent years, international box-office grosses have become increasingly important for big-budget studio films, including films released by Disney’s Marvel Studios and Warner Bros.’ DC arm. Still, it’s been disproportionately important to the Fast and Furious franchise. Since 2013’s “Fast & Furious 6,” more than 70% of the franchise’s box-office receipts have come from international ticket sales.”Does the needle move back in the movie’s favor a bit due to pent-up demand for action on the big screen? It’s possible, but we’ll have to wait and see in these unusual times,” Robbins said.He said that international box-office results are in line with expectations, considering many markets have administered fewer vaccines compared with the U.S.”Overall, I’d cautiously expect ‘F9’ to set a new pandemic era benchmark for opening weekend here in the domestic market, but moviegoing’s recovery remains an ongoing process,” Robbins said.Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Fandango and is the distributor of “F9.” More

Ben Simmons #25 of the Philadelphia 76ers handles the ball against the Atlanta Hawks during Round 2, Game 7 of the Eastern Conference Playoffs on June 20, 2021 at Wells Fargo Center in Philadelphia, Pennsylvania.Jesse D. Garrabrant | National Basketball Association | Getty ImagesThe Philadelphia 76ers are “bullish” on All-Star point guard Ben Simmons after struggling in their recent National Basketball Association playoff series, which damaged his value around the league.Simmons, 24, is in the middle of a sports public relations nightmare following his performance against the Atlanta Hawks. The co-franchise star averaged 9.9 points, 6.3 rebounds, 8.6 assists and shot an abysmal 15-of-45 from the free-throw line. Simmons was passive on the offensive end. He appeared to want no part in shooting the ball from a distance, and at critical moments in Game 7, seemed to avoid the foul-line by passing the ball.Following the loss, Sixers head coach Doc Rivers was asked if Simmons could play his current position for a championship-caliber team in today’s National Basketball Association. Rivers had no answer.And a peek on social media, the team’s fanbase doesn’t seem to trust this part of the process.After Simmons’ struggles on national TV in the playoffs, where clutch performances are highly valued, what’s his NBA market value? And can Daryl Morey, the Sixers’ president of basketball operations, pull off the NBA trade heist –earning the advantage in a Simmons package?What’s wrong with Simmons?Morey spoke to the media Tuesday after the Sixers’ collapse against the Hawks Sunday. The team fell in a Game 7 at home and blew double-digit leads in two of the last four contests in the series.One former NBA coach pointed to Rivers’ failure to adjust and suggested Hawks coach Nate McMillan out-mastered him. And Rivers’ history of coaching teams that blew series leads didn’t favor him in that discussion. Still, Simmons felt the majority of the fanbase’s wrath, even among NBA greats like Shaquille O’Neal.The chatter in basketball circles suggests Simmons doesn’t work on his game enough. Scouts go back to his days at LSU and mention Simmons hasn’t improved since his NBA debut in 2017. They also point out his reluctance to shoot. Some believe Simmons’ shot mechanics are broken.A former player turned NBA broadcaster disagreed, though.Discussing the matter on the condition of remaining anonymous to speak freely, the ex-player pointed out that Simmons showcases his shooting on gamedays before the majority of fans arrive at arenas. In these moments, Simmons shoots with ease and makes his 3-point attempts. The broadcaster suggested it’s a mental block.But does Simmons have any incentive to improve?Philadelphia 76ers’ Ben Simmons (25) drives to the net as Guangzhou Loong-Lions’ Yongpeng Zhang defends and Philadelphia 76ers’ Tobias Harris, right, watches during the first half of an NBA exhibition basketball game Tuesday, Oct. 8, 2019, in Philadelphia.Matt Rourke | APSimmons is in the first of a five-year contract valued at $177 million that will pay him $33 million next season. Rival executives suggest the Sixers paid that price too early and before Simmons truly improved his game. One long-time team executive added Simmons’ character and attitude will be tested this summer.But in situations like this, and considering the sports market, Simmons’ return to Philadelphia could do more harm than good. Corporate partners may elect not to activate team sponsorships with Simmons’ image since Sixers consumers aren’t favoring him. And should Simmons return without notable improvements to his jumper – and confidence – the wrath could get worse.”He may not be the right image right now for you,” said sports marketing executive Tony Ponturo. He added if a team or player’s “performance is bad, you don’t want their bad performance rubbing off on your product’s perception of performance.” Ponturo also noted team partners may avoid products that feature Simmons, fearing he could be traded and they’d be stuck with “wasted material.”Morey didn’t commit and declined to address Simmons’ future when asked if Simmons will be on the roster for the start of the 2021-22 season. “We have a very strong group we believe in,” he said. “None of us can predict the future of what’s going to happen in any place.”Morey later added, “we’re going to do what’s best for the 76ers to give us the best chance to win the championship with every single player on the roster.”Sports agent Rich Paul looks on after the game between the Miami Heat and the Charlotte Hornets at American Airlines Arena on March 11, 2020 in Miami, Florida.Michael Reaves | Getty ImagesGetting on the same pageOn Monday, Rivers said the team is “bullish” on Simmons, who made the All-NBA Defensive Team for the 2020-21 season. The public message is that the Sixers appear willing to fix his shooting woes in hopes this piece can be rescued.Few in NBA circles are buying it, though.Rival executives also watched the series against the Hawks and will inquire about Simmons, likely through his agent, Rich Paul. But to facilitate any trade, Morey and Paul will need to get on the same page.Where can the two agree to ship Simmons? Will a package bring back value to help the Sixers avoid another collapse? And will Morey be challenging within the process? Despite his media charm, executives suggest he’s one of the more difficult team decision-makers.Most major NBA trades need to match salaries, which means the Sixers must identify a package equivalent to Simmons’ price range. Paul’s history suggests he’ll try to pair Simmons with his top two clients – LeBron James and Anthony Davis – in Los Angeles. There, perhaps James’ approach to the game and influence can help Simmons.Could a package centered around Kyle Kuzma and Kentavious Caldwell-Pope suffice? The Sixers get more 3-point shooting to surround franchise star Joel Embiid and gain roster balance. Paul gets to keep his clients together, and where he’s based.Other rumors suggest Portland’s CJ McCollum could be traded to the Sixers during the offseason to help alleviate the Trail Blazers’ problems. McCollum will make $30 million next season and played college hoops at nearby Lehigh University. So it’ll be a mini homecoming for the Ohio native.Behind the scenes, scouts say McCollum is a worker, pointing to his improved game since arriving in the NBA in 2013. He’s one of the better scorers in the league, not afraid to shoot 3-pointers (attempted a career-high 8.9 last season), and he’s a career 82% free throw shooter. Injuries are always a concern with McCollum, 29, but considering today’s NBA, where shooting is vital, the Blazers may seek more than just Simmons in any negotiations.Simmons will make roughly $145 million in the remaining years of his current deal, so financially, he’ll be fine. But despite career averages of 15.9 points, 8.1 rebounds, 7.7 assists, the triple-doubles, and being selected to three All-Star teams, his NBA market value has declined. So using ESPN’s trade machine to explore a Damian Lillard or even Bradley Beal-like deal is fun but probably futile.It’s early, but discussions about what Morey could get in return for Simmons will dominate NBA Twitter gossip. The rumors will suggest all kinds of proposals. Some will be interesting but most won’t happen. The only thing certain in Philly is that Morey is running the show.”I’m going to operate as the general manager of the 76ers,” he said on the Zoom call with media, prior to playful bickering with a local reporter.Perhaps the Sixers aren’t as bullish on current GM Elton Brand as they say they are on Simmons’ future. More

In this articleWMTMarc Lore, CEO, Walmart eCommerceScott Mlyn | CNBCWalmart’s former e-commerce chief Marc Lore sees a hot market for direct-to-consumer retailers such as Warby Parker and Allbirds, which offer something special that mass merchants such as Walmart are having a hard time replicating.”Their products resonate with customers — a certain demographic — that are difficult for big mass merchants to replicate,” Lore said in an interview with CNBC’s “Tech Check” on Wednesday.”Those companies will continue to grow and get bigger, and it’s difficult for mass retailers to replicate those types of brands inside,” he said. “If they were to do a private label, or something like that, it’d be really tough for those brands to have a real soul.”Lore’s comments came a day after eyeglass brand Warby Parker confidentially filed for its initial public offering. Sustainable shoemaker Allbirds is also reported to be in talks with banks ahead of a potential IPO.There’s been a flurry of IPO activity within this retail sector. Some of these companies had built momentum with consumers during the pandemic. The medical scrubs start-up Figs debuted last month, following the IPO of Honest Company, Jessica Alba’s baby and beauty products company.While he was at Walmart, Lore was tasked with helping the big-box retailer spot potential acquisition targets within the direct-to-consumer space. The strategy was viewed as a way for Walmart to try to reach younger consumers with hipper merchandise. Under Lore, Walmart bought digitally native clothing brands Bonobos, ModCloth and Eloquii. Walmart ended up selling Modcloth.Lore, who sold his online delivery start-up Jet.com to Walmart in 2016 for $3.3 billion, also helped to incubate a number of businesses internally at Walmart, including the mattress brand Allswell and the high-end concierge service Jetblack. The latter dissolved after it never took off with customers and was losing money.”It’s really difficult to create those brands inside of a mass merchant,” Lore said. “Something that really makes those brands special, like Warby Parker, is that connection to the customer. … Things that really resonate with millennial, Gen Z-type customers, you just can’t create that from scratch, from a mass merchant. It’s not authentic.”Lore and baseball star Alex Rodriguez are currently working together on a new venture capital firm. Called Vision Capital People, it will start with $50 million of Lore and Rodriguez’s own money. Lore had previously told CNBC that the duo would be looking to spot “mega trends in retail,” such as social commerce and conversational commerce, as they bet on companies.According to Ben Sun, co-founder and general partner at the VC firm Primary Venture Partners, future growth in the retail industry will be propelled by smaller retail brands that are finding success primarily on the internet. Sun’s previous investments include Jet.com, the dog food brand Ollie and the at-home fitness machine Mirror, which is now owned by Lululemon.”E-commerce is being heavily driven off of these smaller, independent, long-tail brands that are creating great products [and] that now have a chance to reach the consumer because they aren’t restricted to have to go offline, which is hard to really penetrate,” Sun said in a recent phone interview. More