Raphael Stevens

Lululemon missed Wall Street’s sales expectations for the first time in more than two years as it cut its full-year guidance.
The company, most known for its yoga pants and belt bags, has been struggling to stock the right assortment and recently pulled its new Breezethrough leggings from shelves.
The apparel retailer beat on earnings and made progress in growing its gross margin and operating income.

Signage at a Lululemon store in New York, US, on Thursday, Aug. 22, 2024. Lululemon Athletica Inc. is scheduled to release earnings figures on August 29. 
Yuki Iwamura | Bloomberg | Getty Images

Lululemon lowered its guidance and posted its first revenue miss in more than two years on Thursday after it botched a highly anticipated product launch and growth slowed in the Americas. 
The company now expects full-year net revenue to be between $10.38 and $10.48 billion, down from a previous range of between $10.7 billion and $10.8 billion. Lululemon anticipates earnings per share will be in a range of $13.95 to $14.15, down from previous guidance of $14.27 to $14.47.

Here’s how company did in its fiscal second quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: $3.15 vs. $2.93 expected
Revenue: $2.37 billion vs. $2.41 billion expected

Shares rose more than 2% in extended trading after initially falling.
The company’s reported net income for the three-month period that ended July 28 was $393 million, or $3.15 per share, compared with $342 million, or $2.68 per share, a year earlier. 
Sales rose to $2.37 billion, up about 7% from $2.21 billion a year earlier. Beyond total sales, Lululemon also missed expectations on comparable sales, which grew 2%, well behind estimates of 5.9%, according to StreetAccount. Comparable sales in the Americas fell 3%.
The trend doesn’t appear poised to improve in the current quarter. Lululemon said it expects sales to grow 6% to 7%, worse than the 9.2% growth that analysts had expected, according to LSEG.

However, Lululemon’s profit guidance is roughly in line with what Wall Street anticipated. The company said it expects third-quarter earnings per share to be between $2.68 and $2.73, compared to estimates of $2.70, according to LSEG.
During the quarter, Lululemon pulled its Breezethrough leggings, launched in early July, after it received a wave of complaints about the product’s unflattering fit.
On a call with analysts, CEO Calvin McDonald addressed the Breezethrough launch and said it was an opportunity for the company to “test and learn.” He added the company bought a small amount of product for the launch.
“While guests were excited by the fabric, the design didn’t meet their expectations. Listening to our guests is central to who we are and how we grow our brand, and we took the right step of pausing on sales and look forward to reintroducing the fabric in the future,” said McDonald. “This decision had a negligible impact on our performance in this quarter.”
The botched launch came after the company struggled with other self-inflicted issues with its assortment, including not having the colors and sizes that its core customers desired, which has had an impact on sales in the U.S. During the quarter, sales grew only 1% in the Americas, the company’s largest region.
On a call with analysts, McDonald acknowledged Lululemon’s women’s business has slowed down in the U.S. He said the company has determined the “most significant factor” affecting the segment is a lack of new styles, which has hurt sales of bottoms and the company’s online business.
“The newness that we had performed well. We simply did not have enough to inspire her to purchase,” he said.
McDonald insisted that the Lululemon brand “remains strong in the U.S. market” and said its men’s business continues to grow.
“Guests are looking for our product, coming into our stores and visiting our e-commerce sites,” said McDonald.
Lululemon’s product challenges follow the departure of its longtime Chief Product Officer Sun Choe, who resigned in May to pursue another opportunity. At the time, the decision weighed on Lululemon’s stock over concerns that Choe’s department would hurt the company’s ability to innovate and keep winning over customers with trendy new fits.
McDonald said the company had a succession plan in place at the time of Choe’s departure, and said the company’s global creative director, Jonathan Cheung, would report directly to McDonald and oversee product design and innovation.
The company also appointed Nikki Neuburger as its new chief brand and product activation officer, overseeing merchandising, footwear, and product operations. On Thursday, McDonald said he and Neuberger are “pleased” with the new structure, which puts design and merchandising on “equal footing” and “reestablishes the healthy balance that must exist within a product organization.”
“The teams are working well together and already in action,” said McDonald.
Like other retailers that are seeing demand slow, Lululemon appears focused on what’s within its control: operations and efficiency. While the sales picture during the quarter was rougher than expected, Lululemon’s profits came in higher than anticipated.
Gross profit grew 9% to $1.4 billion, while its gross margin increase 0.8 percentage points to 59.6% — better than the 57.7% that analysts had expected, according to StreetAccount. Its operating margin and operating income also increased.
Sales jumped 29% in Lululemon’s international markets as the company looks to China for growth. More

NBA superstar Stephen Curry has agreed to sign a one-year, $62.6 million extension with the Golden State Warriors, his agent confirmed to CNBC.
The extension keeps Curry in a Golden State uniform through the 2026-27 season.
Curry will be the first NBA player to make $60 million in a season, and was also the first to make $50 million and $40 million.

Steph Curry
Jonathan Bachman | Getty Images

NBA superstar Stephen Curry has agreed to sign a one-year, $62.6 million extension with the Golden State Warriors, his agent confirmed to CNBC.
The extension keeps Curry in a Warriors uniform through the 2026-2027 season, and will make him the first NBA player to make $60 million in a season, according to Spotrac. As of now, several NBA players who have signed long-term extensions are set to eclipse Curry’s $62.6 million salary the following year.

Curry is a four-time NBA champion and most recently won a gold medal with the Team USA basketball team at the 2024 Olympics. In the championship game against France, Curry led the team with 24 points, all of which were three-pointers.

Curry is no stranger to setting records. He was the first NBA player to hit both the $40 million and $50 million annual base salary marks and has been the highest paid player in the league since the 2017-2018 season, according to Spotrac.
Curry, among other stars, is one of the reasons why the NBA was able to negotiate an 11-year, $77 billion media rights contract in its most recent deal with Disney, NBCUniversal and Amazon, which takes effect after the upcoming season. The booming value of media rights is driving player salaries up with it.
Younger players like Boston Celtics forward Jayson Tatum have signed contracts worth more than $300 million over five years, as the league keeps growing more popular and sports continue to be one of the only types of television that people will tune in for live.
Curry, 36, has played his entire NBA career with the Warriors. He has won two league MVP awards and is the all-time leader in three-pointers made.

Programming note: Curry will appear on CNBC’s “Squawk on the Street” at 10:30 a.m. ET on Tuesday.
Disclosure: Comcast NBCUniversal is the parent company of CNBC. More

GM will fold its electric BrightDrop commercial vans into the Chevrolet brand in an attempt to increase sales, accessibility and recognition of the vehicles.
The move is expected to expand the selling and service points from a handful of dealers to Chevrolet’s large network of North American dealers.
It’s the latest change for BrightDrop, which GM launched in 2021 as a fully owned subsidiary before folding it into the company last year.

Brightdrop EV600 van
Source: Brightdrop

DETROIT – General Motors is folding its all-electric BrightDrop commercial vans into the Chevrolet brand in an attempt to increase sales, accessibility and recognition of the vehicles.
The change is expected to expand the selling and service points from a handful of dealers to Chevrolet’s large network of North American dealers, including more than 500 commercial-focused stores in the U.S., according to Sandor Piszar, vice president of the GM Envolve fleet business in North America.

“It’s got that strength of the Chevrolet brand behind it,” he told CNBC. “It’s absolutely going to drive volume. It helps our customers that choose to go into EVs to easily do so working with the Chevrolet dealer they know and trust now for their other fleet needs.”
The number of new dealers will be based on the amount that decide to opt in to selling and servicing the vans. To sell commercial EVs, dealers must have specific vehicle lifts, service bays and employee training, among other things.
GM declined to disclose the average cost for a dealer to become certified to sell the BrightDrop products, citing expenses will vary based on the store.

BrightDrop currently sells two all-electric commercial vans, called the Zevo 400 and Zevo 600, which are used for things such as package delivery. Starting later this year with the 2025 model year, those vans will be rebranded as Chevrolet BrightDrop 400 and 600 vans.
“Chevy’s our top-selling fleet brand for General Motors.” Piszar said. “This makes absolute perfect sense for GM Envolve and Chevrolet.”

The Thursday announcement is the latest change for BrightDrop, which GM launched in 2021 as a fully owned subsidiary before folding it into the company’s fleet business last year.

Read more CNBC auto news

GM had high expectations of making BrightDrop into a new, lucrative growth business for the automaker, but sales and revenue are not believed to have met the company’s initial expectations.
BrightDrop was expected to generate $1 billion in revenue in 2023. GM declined to disclose BrightDrop’s revenue, but it’s highly unlikely the target was achieved.
The automaker only sold about 500 BrightDrop vans in 2023. GM reports BrightDrop’s sales through the first six months of 2024 were 746 units.
The vans are produced at GM’s CAMI Assembly plant in Ingersoll, Ontario.

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American Eagle delivered mixed quarterly results that beat Wall Street’s profits expectations but fell short of its sales targets.
The longtime mall brand, which also runs the Aerie intimates line, saw profits grow by nearly 60% as costs begin to tick down for the company.
American Eagle also delivered a mixed outlook that implies an uncertain second half of the year.

A shopper walks past the American clothing and accessories retailer American Eagle store in Hong Kong.
Budrul Chukrut | Lightrocket | Getty Images

American Eagle missed Wall Street’s sales targets for a second quarter in a row on Thursday, but profit grew by nearly 60% thanks in part to lower product costs. 
The company’s shares fell more than 7% in premarket trading Thursday.

Here’s how the apparel company did in its fiscal second quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: 39 cents vs. 38 cents expected 
Revenue: $1.29 billion vs. $1.31 billion expected 

The company’s reported net income for the three-month period that ended Aug. 3 was $77.3 million, or 39 cents per share, compared with $48.6 million, or 25 cents per share, a year earlier. 
Sales rose to $1.29 billion, up about 8% from $1.2 billion a year earlier. That sales gain would have been slimmer had it not been for a calendar shift, which positively impacted second-quarter sales by $55 million.
During the quarter, American Eagle’s intimates line Aerie saw revenue grow 9% while its namesake brand grew by 8%. 
American Eagle’s gross margin came in at 38.6% — 0.9 percentage point higher than the prior year and in line with what analysts had expected. The gross margin expansion was led by “favorable product costs,” indicating American Eagle spent less to make its assortment during the quarter. It’s unclear if it lowered prices as a result.

The longtime mall brand issued a better-than-expected outlook for the current quarter but its forecast was lower than anticipated for the full year, indicating the company is still bracing for a turbulent second half. 
For the current quarter, American Eagle expects comparable sales to grow between 3% and 4%, which is better than the 2.8% growth that analysts had expected the company to forecast, according to StreetAccount. 
The retailer is expecting total revenue to be flat to up slightly for the third quarter — in line with expectations, according to LSEG.
For the year, the company expects comparable sales to increase approximately 4%, with total revenue up 2% to 3%, shy of what analysts had expected. Wall Street was expecting its full-year comparable sales forecast to be up 4.2% and overall sales to be up 3.5%, according to StreetAccount and LSEG.
In May, Finance Chief Mike Mathias told CNBC that American Eagle is maintaining a “cautious” view for the back half of the year as it awaits interest rate decisions from the Federal Reserve and prepares for “noise” around the upcoming presidential election. 
Like other retailers contending with slowing demand for discretionary items, American Eagle has looked to cut costs and boost efficiencies so it can protect profits, even if sales are sluggish. Earlier this year, it unveiled a new strategy to grow profits and is working to boost sales by 3% to 5% each year over the next three years and get its operating margin to about 10%.
During the quarter, American Eagle made some strides in achieving that goal. It posted an operating income of $101 million, an increase of 55%, while its operating margin grew 2.4 percentage points to 7.8%. Operating income would have been lower had it not been for the calendar shift, which positively impacted the metric by $20 million. 

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Best Buy raised its fiscal-year profit guidance Thursday after exceeding earnings and revenue expectations for the most recent quarter.
The retailer now expects to see full-year adjusted earnings per share in the range of $6.10 to $6.35, up from a prior range of $5.75 to $6.20.
Best Buy posted comparable sales growth of 6% in the domestic tablet and computing categories.

People walk into a Best Buy store in a Brooklyn mall on August 29, 2023 in New York City.
Spencer Platt | Getty Images

Best Buy raised its fiscal-year profit guidance Thursday after exceeding earnings and revenue expectations for the most recent quarter.
The retailer now expects to see full-year adjusted earnings per share in the range of $6.10 to $6.35, up from a prior range of $5.75 to $6.20. The company, however, lowered the top end of its guidance ranges for both full-year revenue and comparable sales.

“As we look to the back half of the year, we expect our industry to continue to show increasing stabilization,” Best Buy CFO Matt Bilunas said in the company’s press release.
Shares of Best Buy jumped more than 14% in premarket trading Thursday.
Here’s how the consumer electronics retailer did for the period ended August 3 compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

Earnings per share: $1.34 vs. $1.16 expected
Revenue: $9.29 billion vs. $9.24 billion expected

The company reported net income for the quarter of $291 million, or $1.34 per share, compared with $274 million, or $1.25 per share, a year earlier. 
Net sales in the quarter dropped to $9.29 billion from $9.58 billion during the same period a year earlier.

Comparable sales declined 2.3% during the quarter, compared with a 6.2% decline a year earlier.
Best Buy has been in the midst of an attempted turnaround in response to a two-year sales slump. Discretionary merchandise retailers across the board have struggled with softer consumer demand in the wake of unusually high sales throughout the Covid pandemic and as consumers pullback due to high inflation.
As the much-awaited replacement cycle of pandemic-era tech purchases starts trickling in, the retailer is hoping to cash in through marketing and operational initiatives. Best Buy said in July that it would add trained sales teams to three key parts of its stores — computing, appliance, and home theater — and kick off a marketing campaign that includes YouTube videos to draw consumer interest.
The company was also betting on a wave of new tech gadget debuts, such as a collection of new iPads launched by Apple in May and artificial intelligence-enabled laptops touted by Microsoft, to drive sales.
The company on Thursday posted comparable sales growth of 6% in the domestic tablet and computing categories. However, that was “more than offset” by declines in appliances, home theater and gaming, executives said.
“We capitalized on demand driven by our customers’ desire to replace or upgrade their products, combined with new innovation,” CEO Corie Barry said during the company’s earnings call. “We see a consumer who is seeking value in sales events and one who is also willing to spend on high-price-point products when they need to or when there is new, compelling technology.”
Barry said AI could continue to boost sales across categories over the next few years.
“We believe we are just at the beginning of the impact of AI on tech innovation and customer demand,” she said. More