Raphael Stevens

Lululemon’s holiday earnings topped expectations, but its growth in North America is stagnating as it laps tougher comparisons and grapples with a slowdown in demand.
Sales in North America rose 9% compared a 29% increase in the year-ago period.
The athletic apparel retailer, known for its yoga pants and belt bags, issued weak guidance that came in below estimates.

Canadian sportswear clothing band, Lululemon store in Hong Kong.
Budrul Chukrut | Lightrocket | Getty Images

Lululemon on Thursday reported holiday earnings that topped expectations, but the athletic apparel retailer’s guidance came in below estimates as its growth in North America stagnates.
Here’s how the company did in its fourth fiscal quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: $5.29 vs. $5.00 expected
Revenue: $3.21 billion vs. $3.19 billion expected

The company’s reported net income for the three-month period that ended Jan. 28 was $669.5 million, or $5.29 per share, compared with $119.8 million, or 94 cents per share, a year earlier. 
Sales rose to $3.21 billion, up about 16% from $2.77 billion a year earlier.
Shares fell about 10% in extended trading Thursday.
Like its peers, Lululemon has been grappling with uncertain demand and a slowdown in discretionary spending that’s hit the apparel space particularly hard. Investors have watched how Lululemon performs in North America, its largest region by sales, as it laps tougher prior year comparisons and contends with consumers who are choosing experiences over goods like clothes and shoes. 
During the quarter, sales rose 9% in the Americas, compared to 29% growth in the year-ago period. While Lululemon is still growing in the region, the rate has slowed down significantly as Lululemon focuses on expanding internationally.

Meanwhile, international sales grew 54% on a reported basis, with sales in China growing 78% and 36% in the rest of Lululemon’s markets.
Comparable sales rose 12% during the quarter, just shy of the 12.3% uptick analysts had expected, according to StreetAccount.
For the current quarter, Lululemon expects net revenue to be between $2.18 billion and $2.20 billion, representing growth of 9% to 10%. Analysts were expecting a forecast of $2.25 billion, or growth of 12.5%, according to LSEG.
It expects diluted earnings per share to be between $2.35 and $2.40, below the $2.55 analysts had expected, according to LSEG.
For the full year, it expects sales to be between $10.7 billion and $10.8 billion, compared with estimates of $10.9 billion, according to LSEG.
It anticipates diluted earnings per share will be between $14 and $14.20 for the year, compared to estimates of $14.13, according to LSEG.
“As you’ve heard from others in our industry, there has been a shift in the U.S. consumer behavior of late and we’re navigating what has been a slower start to the year in this market,” CEO Calvin McDonald said on a call with analysts Thursday. “We view this as an opportunity to keep playing offense as we lean into investments that will continue our growth trajectory. Outside the U.S., our business remains strong, and all our international markets in Canada.”
McDonald added that both traffic and conversions are down in the U.S. He attributed that to a lack of products in sizes zero to four, key sizes for the U.S. customer base, and not enough colorful items.
Lululemon has long been one of the market leaders for women’s athletic apparel, but the Vancouver-based company is facing more competition than ever. Newer entrants like Alo Yoga and Vuori have been nipping at Lululemon’s market share, and it’s had to work harder to set itself apart in the more crowded category. 
The retailer has been working to build out its footwear offering and grow its men’s business. During the quarter, it opened its first men’s store in Beijing — a key growth market for the company. In February, it debuted its first men’s sneaker, CityVerse, and plans to launch new running styles for both men and women as performance sneakers continue to be a bright spot in an otherwise stagnant shoewear market. 
Headed into the holidays, McDonald said Black Friday was the “single biggest day” in the company’s history and he was “encouraged” by the trends he was seeing at the start of the season. But the retailer’s holiday-quarter outlook came in a bit short of analysts’ expectations. 
In January, it raised that guidance after it saw sales “balanced across channels, categories, and geographies,” finance chief Meghan Frank said in a news release. 
Read the full earnings release here.  More

United is allowing up to five MileagePlus members to pool loyalty points that can be redeemed for flights and other products.
JetBlue and Frontier already allow customers to pool frequent flyer miles.

Passengers check in for United Airlines flights at O’Hare International Airport in Chicago, Illinois, Dec. 13, 2022.
Scott Olson | Getty Images

Here’s a friendship test: Would you share your frequent flyer miles with your pals? United Airlines is betting customers will be open to it.
The airline on Thursday started allowing members of its MileagePlus loyalty program to pool their frequent flyer miles and tap into that stash for trips on United.

A “pool leader” can pick up to four other family members or friends to participate in the joint account. The leader has to be at least 18 years old, but pool members can be any age, so families can use their children’s miles piles toward tickets.
Customers will still retain their own MileagePlus accounts and can decide how much they want to contribute to the pool. Those miles can be redeemed for flights and other products on United’s site or app.
Individuals can decide how much to contribute to the pool, and there’s a commitment: “Once those miles are in the pool …they stay in the the pool,” said Luc Bondar, chief operating officer of United’s MileagePlus loyalty program.
United isn’t the first airline to offer loyalty points pooling. JetBlue Airways lets up to seven customers pool frequent flyer miles, while Frontier Airlines allows up to eight people to pool miles. Airlines also generally allow customers to transfer miles to others, but that often comes with a fee.
“The strategy for mileage pooling is to appeal to less-frequent to moderately frequent travelers and get them and their family members engaged in the program,” said Henry Harteveldt, a travel analyst and founder of the consulting firm Atmosphere Research Group. “By allowing members of a family to pool their award points together, it increases brand preference across the family … just like with toothpaste.”

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Medicare can start covering certain weight loss drugs – as long as they are approved in the U.S. for an added health benefit. 
The Centers for Medicare and Medicaid Services said it has issued the new guidance allowing Medicare Part D plans to cover weight loss drugs which receive that approval.
The agency’s guidance will allow Medicare patients to get coverage for Novo Nordisk’s weight loss injection Wegovy as long as it is prescribed to reduce their risk of heart attacks and strokes.

Boxes of Wegovy made by Novo Nordisk are seen at a pharmacy in London, Britain March 8, 2024. 
Hollie Adams | Reuters

Medicare can start covering certain weight loss drugs for the first time — as long as they are approved for an added health benefit, the Centers for Medicare and Medicaid Services said Thursday.
That opens the door for broader coverage of some highly popular weight loss medications such as Novo Nordisk’s Wegovy, which is now approved in the U.S. for heart health. Those treatments have skyrocketed in demand over the past year despite their hefty price tags and spotty insurance coverage.

Under the new CMS guidance, Medicare Part D plans can cover obesity treatments that receive Food and Drug Administration approval for an additional health benefit. Medicare prescription drug plans administered by private insurers, known as Part D, currently cannot cover those drugs for weight loss alone.
The agency’s guidance means Medicare patients could soon get coverage for Wegovy, as long as they have obesity and a history of heart disease and are prescribed the treatment to reduce their risk of heart attacks and strokes. Earlier this month, the Food and Drug Administration approved Wegovy for that purpose.
The guidance also will open the door to future coverage of other weight loss medications, many of which are being tested for additional health conditions.
Drugmakers such as Novo Nordisk, which also makes the diabetes drug Ozempic, and Eli Lilly are studying their weight loss medicines as treatments for fatty liver disease, chronic kidney disease, sleep apnea and more. To be covered, those drugs would need to return late-stage trial results and then be submitted for FDA approval for those uses.
Wegovy is part of a class of drugs called GLP-1s which mimic a hormone produced in the gut to suppress a person’s appetite and help regulate blood sugar. Coverage for those treatments when used for weight loss is a mixed bag. 

Roughly 110 million American adults are living with obesity and approximately 50 million of them have insurance coverage for weight loss drugs, a spokesperson for Novo Nordisk said in a statement last week.
Some of the nation’s largest insurers, such as CVS Health’s Aetna, also cover the treatments.
But many employers don’t. An October survey of more than 200 companies by the International Foundation of Employee Benefit Plans, or IFEBP, found only 27% provided coverage for GLP-1s for weight loss, compared with the 76% that covered those drugs for diabetes. Notably, 13% of employers indicated they were considering coverage for weight loss.
A provision of a 2003 law established that Medicare Part D plans can’t cover drugs used for weight loss, but the program does cover obesity screening, behavioral counseling and bariatric surgery. A group of bipartisan lawmakers have introduced legislation that would eliminate the provision, but its fate in Congress is far from certain.
A CMS spokesperson told CNBC last week that Medicaid programs would be required to cover Wegovy specifically for its new cardiovascular use. By law, Medicaid must cover nearly all FDA-approved medications, but weight loss treatments are among a small group of drugs that can be excluded from coverage. Around 1 in 5 state Medicaid programs currently cover GLP-1 drugs for weight loss.

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New York remains the richest city in the U.S. and the world with nearly 350,000 millionaires and 60 billionaires.
Its millionaire population has grown 48% over the past decade.

A new report found that New York City is the No. 1 place for ultra-high-net-worth individuals to own a property.
Alexander Spatari | Moment | Getty Images

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.
New York still leads the U.S. and the world when it comes to wealthy cities.

With nearly 350,000 millionaires and 60 billionaires, the Big Apple is the richest city in America, according to the USA Wealth Report from Henley & Partners and New World Wealth. Despite all the headlines about the rich leaving the city, its millionaire population has grown 48% over the past decade.
The San Francisco Bay Area ranks as the second richest city in America, despite topping New York for billionaires, with more than 305,000 millionaires and 68 billionaires. The Bay Area’s growth rate over the past 10 years has been even more impressive, with its millionaire population soaring 82%. The surge in investment and growth in artificial intelligence is expected to add another boost to the area.
The fastest-growing U.S. city for the ultra wealthy among the top 10 is Austin, Texas, which has more than doubled its millionaire population over the past decade to nearly 33,000. Miami is up there too, with 87% growth in millionaires over the past decade — but with one-tenth the New York City total.
The numbers show that the twin wealth hubs in the U.S. endure, despite wealth migration to the Sun Belt — which is roughly defined as the southern third of the U.S. known for its sunny weather and lower tax states.
“Despite the recent rise of major wealth hubs in Texas and Florida, the Bay Area and New York City are expected to remain America’s wealthiest cities for many more decades to come,” said Andrew Amoils, head of research at New World Wealth.

Here are the top 10:

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Target is doubling its bonus payments to salaried employees as its profits recover.
The Minneapolis-based retailer has dealt with a rough stretch marked by weaker discretionary spending, inflated supply chain costs and higher levels of theft.

A Target store in New York, US, on Monday, March 4, 2024. 
Shelby Knowles | Bloomberg | Getty Images

Target will double its bonus payments to salaried employees this year, as the big-box retailer’s profits recover from a bumpy nearly two-year stretch.
Salaried employees at the Minneapolis-based retailer receive an annual bonus, based on Target’s performance and the eligible amount set as part of their compensation. The retailer will pay 100% of employees’ eligible annual bonus amounts for the most recent fiscal year, a company spokesperson said Thursday. That is an increase from 50% in the prior year.

In a statement, Target said the annual bonus payout is based on how the retailer performs against sales and profit goals set at the beginning of the fiscal year.
“Based on Target’s performance in 2023, including the $2 billion in additional profit growth our team delivered that exceeded the goals we set at the beginning of the year, we’re rewarding our team accordingly,” the company statement said.
Target will pay out the annual cash bonuses in late March. The amount paid out won’t be as high as it could be, however. It tops out at 175% of each employee’s eligible bonus amount.
The vast majority of Target’s approximately 415,000 employees, such as those at its stores and warehouses, are paid hourly and do not qualify for the bonuses. Yet it does offer bonuses to store and supply-chain leaders, along with many corporate employees. Top executives at Target have a different bonus structure. 
The increased bonus payout was first reported by Bloomberg.

Target has dealt with a challenging nearly two-year stretch marked by inventory troubles, weaker discretionary spending, inflated supply chain costs and higher levels of theft. In the holiday quarter, Target’s comparable sales declined for the third quarter in a row, and its e-commerce sales also dropped compared with the year-ago period.
The discounter said it expects the sales challenges will continue. For the full year 2024, Target said it anticipates comparable sales will be flat to up 2%.
But the company has improved profits and margins as Target has kept a sharper focus on inventory and as some of its costs, such as freight, have fallen. For the fiscal year, Target said, it expects adjusted earnings per share will range from $8.60 to $9.60. The higher end of that range would top the adjusted earnings per share of $8.94 that it reported for the previous fiscal year.

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Sales of existing homes surged 9.5% in February from January to 4.38 million units, on a seasonally adjusted annualized basis, according to the National Association of Realtors.
Inventory rose 5.9% year over year to 1.07 million homes for sale at the end of February.
Higher demand continued to push the median price higher, up 5.7% from the year before to $384,500.

Jeff Greenberg | Universal Images Group | Getty Images

Sales of existing homes surged 9.5% in February from January to 4.38 million units, on a seasonally adjusted annualized basis, according to the National Association of Realtors. Housing analysts had been expecting a slight drop.
Sales were down 3.3% year over year, but it was the largest monthly gain since February 2023. Sales surged the most in the West, up 19.4%, and the South, up 16.4%. Sales in the Northeast were unchanged.

“Additional housing supply is helping to satisfy market demand,” said Lawrence Yun, NAR’s chief economist. “Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices.”
Inventory rose 10.3% year over year to 1.07 million homes for sale at the end of February. That represents a still low 2.9-month supply at the current sales pace.
Higher demand continued to push the median price higher, up 5.7% from the year before to $384,500 — the eighth straight month of annual gains. Competition was stiff, with 20% of homes selling above list price.
The sales count is based on closings, so contracts likely signed in December and January, when the 30-year fixed mortgage rate dropped to the mid 6% range. It is now over 7%, according to Mortgage News Daily.
First-time buyers, however, did not surge with overall sales. They represented just 26% of buyers in February, down from 28% in January. Roughly 40% is the historical norm. All-cash sales were at 33%, up from 28% the year before.
“The stock market, maybe that is helping, or the record-high home prices. People from expensive states like California are going to more affordable markets like Florida or Georgia and paying all cash,” Yun said, adding that consumers may be accepting a “new normal” for mortgage rates.

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Proxy advisory firm Institutional Shareholder Services on Thursday recommended that Walt Disney shareholders elect activist investor Nelson Peltz to the board in his fight against CEO Bob Iger.
Peltz and his firm, Trian Fund Management, have asked investors to nominate him and former Disney Chief Financial Officer Jay Rasulo to the board at its annual general meeting on April 3.
ISS slammed Disney’s board for repeatedly failing to find a new CEO to take over for Bob Iger.

The Walt Disney company logo is displayed on the floor of the New York Stock Exchange during morning trading on Dec. 1, 2023.
Michael M. Santiago | Getty Images

Proxy advisory firm Institutional Shareholder Services on Thursday recommended that Walt Disney shareholders elect activist investor Nelson Peltz to the board in his bitter fight against CEO Bob Iger.
Peltz and his firm, Trian Fund Management, have asked investors to nominate him and former Disney Chief Financial Officer Jay Rasulo to the board at its annual general meeting on April 3. Among other things, Peltz wants to overhaul Disney’s traditional TV channels, which he claims have been a shrinking business and a drain on shareholder value.

“Dissident nominee Peltz, as a significant shareholder, could be additive to the succession process, providing assurance to other investors that the board is properly engaged this time around,” the ISS report said.
While siding with Peltz, ISS told shareholders not to back Rasulo in the fight, citing his previous positioning as a potential successor to Iger.
“Though we do not have any concerns about his ability to serve as an objective director, we recognize that Rasulo’s potential presence might create added friction on the board,” ISS said.
ISS slammed Disney’s board for repeatedly failing to find a new CEO to take over for Iger, who left his role as CEO in 2020 only to return to the position years later.
Trian heralded ISS’ backing as a significant victory, pointing to the advisors’ support for Peltz as an experienced director at other companies. The investment firm also highlighted that ISS recommended shareholders withhold their support for former JPMorgan Chase executive Maria Elena Lagomasino, a current Disney director whom Trian has targeted for replacement.

In response, Disney said that the recommendation from ISS “fails to acknowledge the diverse set of skills and experience on Disney’s Board,” and stressed that the proxy firm is endorsing 11 of its 12 nominees.
ISS also said shareholders should withhold their votes from a separate slate of nominees, from activist Blackwells.
The recommendation comes as Disney has lined up a number of high-profile endorsements, from the heirs of Walt and Roy Disney to JPMorgan Chase CEO Jamie Dimon and top Disney shareholder and filmmaker George Lucas.
Another proxy advisory firm, Glass Lewis, earlier this week endorsed Disney’s slate of board nominees. ISS was largely expected to follow suit.
Securing the support of ISS and Glass Lewis is crucial in activist fights. Large institutional shareholders will often — but not always — vote based on the recommendation of either of the two proxy advisory firms. Activists and management each make their case to the advisory firms, which in turn issue their opinions based on meetings with either side and their own analysis.
— CNBC’s Rohan Goswami contributed to this report.

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Intuitive Machines highlighted that its cash balance of nearly $55 million on March 1 was “the largest balance relative to any quarter-end since the Company’s IPO.”
“We come into 2024 from a position of financial strength,” Intuitive Machines interim Chief Financial Officer Steve Vontur said on Thursday.
Intuitive Machines completed a review of its first lunar cargo mission and is still planning to launch its second mission this year.

The IM-1 lander “Odysseus” in lunar orbit on Feb. 21, 2024.
Intuitive Machines

Intuitive Machines is building on the successes of its inaugural moon mission, reporting fourth-quarter results on Thursday and saying it now has “sufficient capital for the near term.”
The lunar company revealed that its cash balance at the end of the year was just $4.5 million – partly the result of paying down $12 million in debt off its balance sheet. Following its historic February moon landing, the company saw about $50 million in “warrant exercises from an institutional investor,” and raised $10 million through equity.

Intuitive Machines highlighted that its cash balance of nearly $55 million on March 1 was “the largest balance relative to any quarter-end since the Company’s IPO.”
“We come into 2024 from a position of financial strength. We’ve expanded our cash position with lower debt, we’ve grown backlog, our margins are improving, and our future opportunities are brighter than ever,” Intuitive Machines interim Chief Financial Officer Steve Vontur said on the company’s earnings call.
Intuitive Machines’ net income for the fourth quarter was $4.6 million, down 63% from $12.4 million in the same period a year prior. Revenue was also lower for the quarter, at $30.6 million, representing a 20% year over year drop from $38 million a year ago.
Shares of Intuitive Machines slipped 2% in trading Thursday from its previous close of $5.61.

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The company pointed to its recently improved backlog, as well as a number of upcoming potential NASA contracts, as further bolstering the momentum gained by the company’s inaugural moon mission.

Overall, Intuitive Machines had a nearly $270 million backlog at the end of the year.
“We expect sales to expand significantly this year based on the current backlog,” Vontur said.
Intuitive Machines began realizing revenue from a multiyear engineering services contract from NASA’s Goddard Space Flight Center in Maryland, with $12.5 million from work done in December – a monthly rate the company expects to continue in the year ahead.
Additionally, the Houston-based company highlighted three upcoming potential NASA contract awards, including to build an astronaut-capable moon rover, provide lunar data services, and additional moon mission contracts.
The first of those awards, NASA’s Lunar Terrain Vehicle program, is scheduled to be announced on April 3. The LTV effort is planned to be a 10-year, $4.5 billion program to build a car-like rover to transport astronauts around the surface of the moon. Intuitive Machines is leading a team that includes Boeing, Northrop Grumman, and Michelin and priced its bid for a preliminary design contract at about $30 million over the course of a year. The company expects NASA will award multiple design contracts.
“We’re very confident in our capability and our design, and we’re looking forward to hearing about that,” Intuitive Machines CEO Steve Altemus said.

Preparing for second mission

The landing strut of Intuitive Machines’ Odysseus lunar lander absorbs first contact with the lunar surface during its landing at the Malapert A site on the Moon, as the liquid methane and liquid oxygen engine continues to throttle, February 22, 2024.
Intuitive Machines | Via Reuters

Intuitive Machines flew its first cargo mission, called IM-1, to the moon last month. The lander touched down successfully before tipping over, but was still able to operate for about a week on the surface in a historic first for a private mission.
Intuitive Machines completed a review of its first lunar cargo mission, Altemus said, and has now “identified the areas that needed adjustment” for its second effort.
“We are still planning for a 2024 mission for IM-2,” Altemus said.
The company highlighted a number of milestones completed toward the launch of the IM-2 flight, including testing of different payloads Intuitive Machines’ lander will carry – including its “rocket-powered drone” Micro Nova and a NASA ice mining drill. More