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    Nordstrom shares fall 10% as retailer warns of potential sales declines in 2024

    Nordstrom beat sales expectations for the holiday quarter.
    Yet, the department store said its revenue may decline in the coming year, which has one less week of sales.
    The Seattle-based company said it plans to open new Nordstrom Rack stores and drive higher online and in-store sales in the coming year.

    Shoppers exit the Nordstrom at the Westfield Topanga mall in Los Angeles on Aug. 14, 2023.
    Christina House | Los Angeles Times | Getty Images

    Nordstrom’s holiday-quarter sales topped Wall Street’s expectations on Tuesday, but the retailer gave a muted outlook for the year ahead, and shares fell about 10% in extended trading.
    The Seattle-based company said it plans to open new Nordstrom Rack stores and drive higher online and in-store sales in the coming year. Yet, it said full-year revenue, including retail sales and credit cards, will range from a 2% decline to a 1% gain compared with the previous year. That forecast includes a more than 1% hit from having one less week in the fiscal year.

    Nordstrom said it expects earnings per share between $1.65 and $2.05 for the full year. That would be higher than its most recent fiscal year, which saw earnings per share of $1.51, the retailer said Tuesday.
    Here’s what the department store operator reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

    Earnings per share: 96 cents adjusted vs. 88 cents expected
    Revenue: $4.42 billion vs. $4.39 billion expected

    Similar to other retailers, Nordstrom has felt the squeeze from consumers becoming choosier and more price-conscious while dealing with inflation and higher interest rates. It has also struggled with company-specific problems, such as lagging sales at its off-price retailer, Nordstrom Rack, and too much of the wrong inventory, which led to higher levels of markdowns.
    In the fiscal quarter that ended Feb. 3, Nordstrom’s quarterly revenue rose about 2% from $4.32 billion in the year-ago period. It attributed approximately $190 million of those sales to having an extra week in the fiscal year.
    Nordstrom’s net income rose to $134 million, or 82 cents per share, from $119 million, or 74 cents per share, a year earlier. Excluding a charge associated with relocating the company’s fulfillment center, as well as other adjustments, earnings per share were 96 cents.

    Net sales for the company’s namesake banner declined 3% in the fourth quarter compared with the year-ago period. That includes a 4.1% lift from the extra week of the fiscal year.
    The company’s wind down of its Canadian business took a bite out of sales, causing net sales to drop more than 3%. The company announced a year ago that it would shut down its stores and online operations in Canada.

    Rack results

    Nordstrom Rack, the company’s off-price brand, was the strongest performer in the holiday quarter. Its net sales rose 14.6%, including a 5.8% boost from the extra week in the year. 
    In the fourth quarter, more shoppers visited Nordstrom Rack’s website and made purchases when they did, CEO Erik Nordstrom said on the company’s earnings call.
    The off-price chain grew, even when taking out the boost from opening new stores, with the banner’s comparable sales up high single digits, he said.
    Nordstrom opened 19 new Nordstrom Rack stores during the fiscal year, for a total of 258 stores. Including its 93 flagship Nordstrom locations, the company ended the year with 359 total stores, just one more than it had at the end of the year-ago period.
    The retailer plans to open 22 new Nordstrom Rack stores in 2024.
    On the earnings call, Erik Nordstrom said the chain is “a growth engine for our company” and Nordstrom’s “largest source of new customer acquisition.”
    He said roughly a quarter of retained Rack customers migrate to the Nordstrom banner within four years.
    The company did not announce plans to open new stores under its flagship banner, but Erik Nordstrom said those stores are a major part of the company’s business.
    “Some of our fastest-growing stores this past year were our big urban flagship stores,” he said. “In particular, New York has shown real strong growth.”

    Shopping trends

    Women’s apparel, beauty and the active category had the strongest growth year over year in the fourth quarter. Some popular purchases included athletic shoes from On Running and Hoka, and apparel from Vuori, Erik Nordstrom said. Shoppers also bought fragrances and apparel from fashion-forward brands such as Vince and Cinq a Sept during the holiday quarter, he said.
    Online sales dropped 1.7% in the fourth quarter compared with the year-ago period. E-commerce represented 38% of total sales during the quarter, down from 40% in the same period a year earlier, and 36% for the fiscal year, down from 38% in fiscal 2022. 
    Store traffic “continues to be on the soft side,” though traffic at Nordstrom stores improved sequentially throughout the year, Erik Nordstrom said on the earnings call. He said website traffic remains soft, too. Yet, he said average order value is going up both online and in stores.
    Inventory at the end of the quarter was down 2.7% compared with the year-ago period. The company entered the holiday quarter with less inventory, too, which led to fewer markdowns and fresher merchandise, Erik Nordstrom said.
    In the coming year, he said the retailer will focus on driving sales growth at its namesake banner, operating more efficiently and building on momentum at Nordstrom Rack.
    In April, it will launch an online marketplace on Nordstrom’s website to expand its merchandise assortment with inventory that’s owned and sold by third-party vendors. Marketplaces tend to be more profitable for retailers, since the company does not take on the risk of buying inventory that customers may not like and get stuck with marking it down.
    Nordstrom will also personalize the online experience for shoppers to direct them to items that they may like, he said. Online and in stores, beauty will play a prominent role in driving sales growth, he said.
    As of Tuesday’s close, Nordstrom shares are up about 6% over the past year. That has underperformed the approximately 25% gains of the S&P 500. Nordstrom’s stock closed Tuesday at $20.90, bringing the company’s market value to about $3.4 billion.Don’t miss these stories from CNBC PRO: More

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    Fed Chair Powell testifying to House on Wednesday. What investors are expecting

    Fed Chair Jerome Powell heads to Capitol Hill on Wednesday with markets intent on getting more clarity about how the central bank plans on proceeding with monetary policy this year.
    Central to the question of how the Fed acts from here on out is its view on inflation and how Powell expresses that.
    Powell’s testimony before Congress comes at a ticklish time for markets: After breaching historic highs, major stock averages have sold off this week.

    Jerome Powell, chair of the Federal Reserve, during a House Financial Services Committee hearing in Washington, D.C., on June 21, 2023.
    Nathan Howard | Bloomberg | Getty Images

    Federal Reserve Chairman Jerome Powell heads to Capitol Hill on Wednesday with markets intent on getting more clarity about how the central bank plans on proceeding with monetary policy this year.
    The past several months have seen a changing dynamic between financial markets and the Fed over the pace and timing of expected interest rate cuts this year. Markets have had to adjust their collective view from a highly accommodative central bank to one that’s more cautious and deliberate.

    With his congressionally mandated testimony coming before the House on Wednesday and the Senate on Thursday, Powell will be tasked with providing a sharper view — and not rocking the boat for a nervous Wall Street.
    “The question now for the market is to glean any information on when the Fed will begin employing rate cuts and how many,” said Quincy Krosby, chief global strategist at LPL Financial. “He’s not going to answer that necessarily. But if there is any change, any nuance, that is what the market wants to see.”
    Central to the question of how the Fed acts from here on out is its view on inflation and how Powell expresses that. In recent weeks, he and others have expressed satisfaction with the trend in prices along with apprehension that risks still lurk, saying it’s too early to ease up on monetary policy.
    Markets currently anticipate the Fed will begin cutting in June and enact the equivalent of four quarter-percentage-point cuts in total this year, according to futures market pricing gauged by the CME Group. Policymakers in December indicated three cuts and mostly have avoided providing a timetable.

    Mixed signals complicate the message

    On the inflation issue, the data had been cooperating for the most part.

    Inflation readings in the latter part of 2023 showed a clear trend toward the Fed’s 2% target. However, January brought a jolt, showing that consumer prices, particularly in shelter costs, remained stubbornly higher and posed a threat to the trend.
    Powell will have to synthesize the recent trends carefully as he speaks first to the House Financial Services Committee on Wednesday, then the Senate Banking Committee the day after.
    “The message very much is not going to be ‘mission accomplished,’ but ‘we’ve made a lot of progress, we anticipate rate cuts are coming,'” said Joseph LaVorgna, chief economist at SMBC Nikko Securities. “That to me is what I think will be the central message.”
    Powell’s testimony before Congress comes at a ticklish time for markets: After breaching historic highs, major stock averages have sold off this week amid ongoing concern about where rates are headed and a suddenly uncertain outlook for a few of the Big Tech names that have been driving prices higher.
    Both conditions are concerning for policymakers. Big jumps in risk asset prices could reflect loose financial conditions that might cause the Fed to hold tight on policy, while a less certain environment could raise fears about staying too high for too long on rates.
    Powell “cannot deviate at all from the ‘data-dependent, but we really want to cut rates’ approach the Committee has committed to,” wrote Steven Ricchiuto, U.S. chief economist at Mizuho Securities. “Sharp swings in financial conditions can easily work at cross-purposes to the Committee’s objective: maintaining tight labor market conditions while also keeping inflation expectations and long-term rates well anchored,” he said, referring to the policy-setting Federal Open Market Committee.

    Political concerns

    There are also other dynamics facing Powell. Several economists, including LaVorgna, see labor conditions weakening despite the apparent strength of a 3.7% unemployment rate. Also, a stunning runup in cryptocurrency prices recently suggests untethered risk-taking that could indicate too much liquidity washing around the system.
    Indeed, Atlanta Fed President Raphael Bostic on Monday released an essay in which he expressed concern about potential “pent-up exuberance” that could be unleashed after rate cuts start.
    “We don’t think monetary policy itself is loose, but the Fed and Powell have to wonder about this nonetheless, in view of these extant ‘remnants’ of speculation,” strategists at Macquarie said in a client note Tuesday. “The point is that small speculative frenzies that come out of nowhere should make it even more difficult for the Fed to sound dovish at this juncture.”
    Finally, there are political considerations.
    Along with the usual pressure that comes during presidential election years, there have been calls on the Hill for Powell and his cohorts to start cutting rates. Sen. Elizabeth Warren, D-Mass., no fan of Powell to start with, called in January for the Fed to start cutting as higher rates are especially painful for lower-income households.
    They’ll get a chance to hash out the issue Thursday as Warren is a member of the Senate banking panel.
    Powell needs to make “a case for why the Fed needs to address rates in anticipation of where inflation is likely to be not where it is at the moment,” LaVorgna said. “You’re going to be damned if you do, damned if you don’t. So, I think you need a very solid framework.”Don’t miss these stories from CNBC PRO: More

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    Target launches paid membership program as it chases new revenue streams

    Target is launching a paid membership program, Target Circle 360.
    The retailer is following the playbook of competitors Amazon and Walmart, which have already turned subscription services into money makers and sales drivers.

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

    Target on Tuesday said it will launch a paid membership program next month, riffing off the playbook of its rivals Amazon and Walmart.
    The subscription-based program, Target Circle 360, will launch in early April and cost $99 per year. Target will offer a discounted rate of $49 per year as part of a promotion from its launch through May 18, then continue to offer the lower price to its credit card holders after that. The program will include unlimited free same-day delivery for orders over $35 in as little as one hour with no delivery fees and two free-day shipping, along with other perks.

    Target is turning to the new revenue stream as it tries to boost weaker sales. Its fiscal fourth-quarter earnings and revenue reported Tuesday beat Wall Street’s expectations, but its comparable sales have declined three quarters in a row. Target shares jumped 12% on Tuesday as the retailer showed progress in improving profits and unveiled the subscription.
    With the move, the company is also following in the footsteps of retailers that have turned membership fees into a moneymaker and a sales driver. It is unclear how many people could sign up for the paid tier. The free Target Circle has more than 100 million members, according to the company.
    In an interview with CNBC, CEO Brian Cornell said the paid membership program will encourage customers to place more online orders with Target. He said the company’s market research has shown that customers value delivery to their homes, even as they use curbside pickup more frequently.
    “There’s a guest who’s looking for the ease and convenience of having something brought right to their home — in some cases, within an hour —and we just want to elevate the awareness that we can do that,” he said.
    Home deliveries will be powered by Shipt, a membership-based company that Target acquired in 2017 for $550 million. Similar to other gig-economy companies like DoorDash, the business relies on independent contractors who retrieve purchases and get them to customers’ doors.

    By taking away delivery fees, Target could use the membership program to rev up its e-commerce business. Digital sales have declined every quarter for the past year, and dropped 0.7% year over year in the fiscal fourth quarter.
    Along with launching the paid membership program, Target is taking other steps to keep shoppers coming back. It is relaunching its free Target Circle loyalty program and credit card, Sylvester said. Target Circle, which debuted in 2019, will become easier to use and more personalized. For example, members who belong to the free program will have discounts automatically applied rather than having to scan through deals on the app, she said.
    Target’s Circle card takes an extra 5% off customers’ purchases, includes free two-day shipping and allows extra time to make returns. The card was previously known as Target RedCard.
    Sylvester said the company is looking at a wide range of potential benefits to sweeten the membership offer and increase subscriber numbers.
    Target is turning to its competitors’ playbook for a reason: Memberships have boosted business for retailers like Amazon.
    Amazon launched its Prime program in 2005, with perks like free two-day delivery and streaming of popular movies and original TV shows. It costs $139 per year or $14.99 per month, with the video membership-only option of $8.99 per month.
    Amazon does not frequently share Prime membership totals. The company had more than 200 million members of Prime across the globe in early 2021, according to a final letter to shareholders written by former CEO Jeff Bezos.
    Walmart launched its program, called Walmart+, in 2020. It costs $98 per year or $12.95 per month, with perks like free shipping, free grocery deliveries for orders of at least $35 and gas discounts.
    Walmart has not said how many people subscribe to Walmart+, but its CFO, John David Rainey, said on the company’s earnings call in February that its membership continues to grow by double-digit percentages.
    Walmart CEO Doug McMillon told investors on the company’s earnings call in February that Walmart+ members spend nearly twice as much as nonmembers and buy more over the course of a year.
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    Can Israel afford to wage war?

    In the next few weeks, Binyamin Netanyahu, Israel’s prime minister, hopes to gain final parliamentary approval for an emergency war budget. It includes more cash for settlers in the West Bank, as well as for religious schools, where teenagers study the Torah rather than science—part of an attempt to unite his fissiparous political coalition. But it also contains a startling break with the past. Everyday welfare spending (long generous in Israel, owing to its socialist foundations) will be slashed to fund the country’s armed forces. The military budget will almost double from 2023 to 2024. Israel’s unwritten social contract, which has for 70-odd years promised both a generous welfare state and a fearsome military, is under threat.Despite continuing discussions about a ceasefire, Mr Netanyahu has been clear that any pause will be temporary. And even if a ceasefire ends up being extended or he leaves office, there is broad political support for a mightier military. At the same time, the war is proving more expensive than expected. Between October and December Israel’s economy shrank by a fifth at an annualised rate, compared with the previous three months—more than twice the contraction predicted by the Bank of Israel. In the same period, over 750,000 people, or a sixth of the labour force, were away from work, many of them evacuees or reservists. Last month Moody’s, a rating agency, downgraded the country’s credit rating for the first time ever. All this raises a question. Can Israel afford to wage war?The core problem is fiscal. On the eve of Hamas’s attack on October 7th, Israel’s debt-to-GDP ratio was 60%, well below the average in the OECD group of mostly rich countries. From October to December, the armed forces burned through 30bn shekels ($8bn) on top of their usual spending, an amount equivalent to 2% of gdp. And it is not just a bigger budget for the armed forces; the government is also splashing out on accommodation for evacuees, several furlough schemes and support for reservists. Israeli policymakers think that a debt ratio of 66% would be manageable. Mr Netanyahu’s budget would target an annual fiscal deficit of 6.6% of GDP—enough to produce a debt ratio of around 75%.For America or Japan such borrowing would be a breeze. In Israel, however, there is always a chance that more conflict is around the corner. Should the country’s tech industry be wounded, perhaps in a war involving other regional powers, up to a quarter of the country’s income-tax take would be at risk. The last time that Israel went into battle on the present scale, during the Yom Kippur war in 1973, its debt ratio passed 100%, which sparked a financial crisis. As the central bank printed cash, inflation rocketed to 450% by 1985 and the banking sector toppled. To keep bondholders happy, therefore, the government needs room for manoeuvre.Many now worry that Mr Netanyahu’s budget is too lavish. Although, in times of crisis, governments may borrow to keep things ticking over, they are wise to do so modestly. Given Israel’s desire to lift military spending, outgoings will not fall back to pre-war levels anytime soon. As a result, the government needs a plan to stabilise debt while spending remains high.Israel’s tax take in 2022 was worth 33% of GDP, just below the OECD average of 34%. Yet Mr Netanyahu’s budget includes only modest increases. Value-added tax will rise by one percentage point to 18%; a health tax on incomes will go up by 0.15 percentage points. Policymakers worry that raising corporate taxes would cause the tech sector, which is highly mobile and already struggling to find workers, to flee the country. Harsher taxes on households would risk depressing consumption and make life harder still for those who are already struggling because of the war.A tale of one cityIn the suburbs of Jerusalem, secular professional families, which have had members called up and seen income from businesses plummet, are suffering. Many in Arab neighbourhoods—those worst-affected by Mr Netanyahu’s budget—report no longer being welcome at work. A few miles away, though, ultra-Orthodox households, which are exempt from military service and rely on hand-outs that Mr Netanyahu wants to make more generous, have barely had to tighten their belts.The impact on industries is similarly uneven. The tech sector is bearing up reasonably well. Some firms even think they can spin a profit, benefiting from a new round of military contracts. Many have moved operations abroad, which lessens the impact of losing employees to the fight. “Our productivity actually improved,” says Chen Bitan at Cyberark, one of the country’s biggest cyber-security companies. “We told our employees the war would be won by the economy,” he explains. Although local tech investment has fallen, it has done so by about the same amount as in Europe—suggesting the war is not to blame.But the rest of the economy is in trouble. Construction is at a standstill. Farms have lost more than half their workforce. And companies involved in tourism are suffering. In January 77% fewer tourists visited Jerusalem than a year ago.The recovery could be glacial, not least because war has exacerbated longstanding problems. One is the economy’s reliance on low-paid Palestinian workers. The West Bank may import as many goods from Israel as before the war, but its 210,000 day labourers—equivalent to 5% of Israel’s workforce—cannot get out. Their permits were cancelled after October 7th, and Israel’s government is refusing to let them back in. Farms, factories and building sites lack workers. Yet many industrialists are in two minds. “We need the Palestinians, but we cannot be dependent on them,” says one.Israel’s labour market is already uber-tight. Bringing in foreign workers is slow and expensive, and the country’s workforce is less than half the size of its total population. Half of the men in Israel’s Orthodox population, which is the country’s fastest-growing group, refuse to work on religious grounds. Those who do are often woefully undereducated, having attended religious schools. Much the same is true of Arab Israelis, the community with the second-highest fertility rate. And in January new rules extended military service from 32 to 36 months for men, further depleting the labour force.Should debt continue to spiral, as the economy struggles, things will get difficult. But a repeat of what happened after the Yom Kippur war is unlikely. Israel’s ministries are stuffed with technocrats. The public is aware their security depends on a stable economy, and are liable to depose irresponsible politicians. Markets think that a default is improbable. Although borrowing is now more expensive for the government, it is far short of the eye-watering prices paid by irresponsible leaders elsewhere. Credit-default-swap rates, an indicator of markets’ trust in a government, rose from 0.5% to 1.4% after October 7th, before stabilising.Markets appear to have almost as much faith that Israel will not unleash inflation in order to reduce debt payments. The country’s annual inflation, at 3%, is lower than in America, and investors expect it to have fallen to 0.4% by the end of the year. Since the Yom Kippur war, Israel has acquired an inflation-targeting central bank, which is of a hawkish bent. After October 7th it spent $30bn in foreign reserves propping up the shekel (and has another $170bn if the currency needs more cushioning). The shekel has barely moved since.Yet even if a financial crisis is unlikely, that does not mean pain will be avoided. It will just come in a different form: through further spending cuts that are required to guarantee stability. The money that holds Mr Netanyahu’s coalition together will be protected for as long as he remains prime minister. Instead, as indicated by the war budget, Israel’s welfare state will take the hit. Despite having one of the lowest rates of unemployment in the OECD, the country is the fifth-biggest spender on unemployment benefits. Only the governments of Norway and Iceland spend more of their GDP on education. This makes a tempting target for a prime minister who needs to find savings, and has allies to protect.The welfare ministry, which is also responsible for caring for evacuees and returned hostages, will have to take an 8% cut under Mr Netanyahu’s budget—far above that faced by most other civilian ministries. The ministry has already come under fire for its lacklustre support of 135,000 Israelis evacuated from the country’s north and south. It has done little other than pay their hotel bills; now officials are reportedly pressing families to return. If Israel remains under Mr Netanhayu’s mismanagement, other ministries will experience similar treatment. Even if he steps down, however, Israel will have to make hard choices between the two pillars of its social contract: its armed forces and its welfare state. ■ More

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    Novo Nordisk’s diabetes drug Ozempic slashed the risk of kidney disease progression in trial

    Novo Nordisk’s blockbuster drug Ozempic cut the risk of kidney disease progression and related health complications in diabetic patients, according to initial late-stage trial results.
    Ozempic specifically lowered the risk of kidney disease progression, major cardiac events and death by 24% in diabetic patients with chronic kidney disease compared to a placebo. 
    The results add to the growing evidence that the highly popular injection has broader health benefits for patients beyond treating Type 2 diabetes.

    This picture taken on October 23, 2023, shows Ozempic medication boxes, an injectable antidiabetic drug, in a pharmacy in Riedisheim in eastern France.
    Sebastien Bozon | Afp | Getty Images

    Novo Nordisk’s blockbuster drug Ozempic cut the risk of kidney disease progression and related health complications in diabetic patients, according to initial late-stage trial results released Tuesday. 
    Ozempic specifically lowered the risk of kidney disease progression and death from kidney or cardiovascular complications by 24% in diabetic patients with chronic kidney disease compared to a placebo. 

    The results add to the growing evidence that the highly popular injection and similar drugs for weight loss have broader health benefits for patients beyond treating Type 2 diabetes and helping them shed pounds. Those treatments skyrocketed in popularity over the past year despite their mixed insurance coverage and hefty price tags.
    Novo Nordisk said it will present full data from the study later this year. The company also noted that it would file for an expanded approval of Ozempic based on the data in both the U.S. and Europe.
    Chronic kidney disease would be a big additional treatment opportunity for Ozempic. Roughly 40% of people with diabetes also have the condition. The disease involves a gradual loss of kidney function.
    Notably, the Danish company ended the trial in October, a year earlier than expected, in response to positive results.
    The trial, called FLOW, first started in 2019 and followed roughly 3,500 patients with diabetes and moderate to severe chronic kidney disease.

    The data comes as Novo Nordisk faces increased competition from Eli Lilly and tries to win expanded insurance coverage for its separate weight loss injection Wegovy.
    Last year, a late-stage trial on Wegovy showed that it cut the risk of heart attacks and strokes by 20%. 
    Clarification: This story was updated to reflect trial information Novo Nordisk clarified from an earlier press release.Don’t miss these stories from CNBC PRO: More

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    Delta is the latest airline to raise its checked bag fee

    Delta said the airline will raise its checked bag fee by $5 beginning Tuesday.
    It’s the latest airline to join the higher baggage fees trend, with American Airlines and United Airlines also announcing price increases in the past two weeks.
    Delta said the move will help the company stay on pace with rising industry costs.

    A Boeing 767 passenger aircraft of Delta Air Lines arrives from Dublin at JFK International Airport in New York as the Manhattan skyline looms in the background on Feb. 7, 2024.
    Charly Triballeau | Afp | Getty Images

    Delta Airlines just became the latest airline to raise its checked bag fee — this time by $5 beginning Tuesday, according to the company.
    In a statement, the airline said the fee for both the first and second checked bag is increasing by $5 for most domestic and short-haul international routes. Travelers with Delta perks, such as Delta SkyMiles Medallion members and customers in first class, will continue to receive their allotment of complimentary bags, the airline added.

    It will now cost travelers $35 for the first checked bag and $45 for the second checked bag. It’s the first Delta baggage price increase since 2018, which the company said will help it stay on pace with rising industry costs.
    The move comes two weeks after American Airlines announced a price increase for its checked baggage. Shortly after that announcement, United Airlines said its checked baggage will cost more. JetBlue and Alaska Airlines have also raised prices this year.
    Delta said the increased fee does not apply to tickets purchased before Tuesday.Don’t miss these stories from CNBC PRO: More

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    Dodge Charger will live on as a new EV and a gas-powered muscle car

    Dodge on Tuesday revealed the new Charger as an all-electric vehicle as well as a next-generation gas-powered muscle car.
    Offering EV and gas-powered versions of the vehicle will allow Dodge to be more flexible when it comes to production, as sales of all-electric vehicles have been growing more slowly than expected.
    The 2024 Charger EV, known as the Daytona, is expected to go on sale this summer and will be the first all-electric car from Dodge. The gas-powered models will follow in 2025.

    2024 Dodge Charger Daytona Scat Pack EV

    DETROIT — Dodge won’t abandon its traditional, gearhead, high-octane Charger and Challenger owners with its next-generation muscle car.
    The automaker on Tuesday revealed the new Dodge Charger as an all-electric vehicle as well as a next-generation gas-powered muscle car. It will be the first all-electric car from Dodge.

    The traditional car has been in question since late 2022, when Dodge said production of the longstanding Charger and Challenger would be discontinued at the end of last year. At that time, the company said an EV would replace them, declining to discuss the potential for future gas models.
    Offering EV and gas-powered versions of the vehicle will allow Dodge to be more flexible when it comes to production, as sales of all-electric vehicles have been growing more slowly than expected. More gas- and electric-powered Chargers, including a “Banshee” EV, will follow the initial vehicles.

    2024 Dodge Charger Daytona Scat Pack EV

    Dodge CEO Tim Kuniskis called the EV a “game changer in the industry.” The new gas-powered models, meanwhile, will outperform their V-6 engine predecessors, as well as some of the V-8 variants.
    “We’re taking the performance of the ‘golden age’ that you know today that you judge everything by and we’re taking the technology of the future to make sure [the Dodge brothers’] legacy doesn’t die,” Kuniskis said during a media briefing. “The Banshee is going to be our ultimate performer.”

    Two- and four-door models

    The 2024 Charger EV, known as the Daytona, is expected to go on sale this summer with up to 670 horsepower, 627 foot-pounds of peak torque and a 0-60 mph time of 3.3 seconds.

    The two-door EV versions will be first, followed by four-door models during the first quarter of next year. The gas-powered Chargers with a new inline-six engine are expected to go on sale in 2025.

    All models of the next-generation Charger will eventually come in two- and four-door variants to replace the four-door Dodge Charger and two-door Challenger.

    Pricing for the EV and gas-powered models will be announced closer to their production, Kuniskis said. Current starting prices for the Charger and Challenger gas models range between roughly $33,000 and $96,000.
    Both the EV and gas models will eventually come in two- and four-door variants to replace the four-door Dodge Charger and two-door Challenger. That change is expected to reduce parts and costs — following a mandate from Carlos Tavares, CEO of Stellantis, which owns Dodge, to his brand executives.
    Dodge said all EV and gas models will share interior and exterior designs, which also should help with production complexity and lower costs.
    When asked whether the EV will be profitable, Kuniskis reiterated comments made by Tavares that the company won’t sell electrified vehicles at a loss in order to boost sales or meet federal fuel economy standards.

    2024 Dodge Charger Daytona Scat Pack EV

    As many brands in recent years switched to smaller and more fuel-efficient engines, Dodge rolled out Hellcat models and other high-performance vehicles. Such models helped generate attention for the brand but didn’t help the automaker’s carbon footprint, forcing it to buy carbon credits from automakers such as Tesla.
    Stellantis’ “Dare Forward 2030” strategic plan includes moving toward electrified and more efficient propulsion systems, cutting its global carbon footprint by 50% by 2030 and leading the transportation industry by achieving net carbon zero by 2038.
    Kuniskis said there are no plans for V-8 or plug-in hybrid electric models for the new Charger, which will be produced at a Stellantis assembly plant in Windsor, Ontario, in Canada.

    Dodge Charger Daytona

    The Charger Daytona EV will initially be offered in “R/T” and “Scat Pack” models with 496 horsepower and 670 horsepower, respectively. The ranges on a full charge are expected to be 317 miles for the R/T and 260 miles for the Scat Pack, Dodge said.
    A feature called “PowerShot” will be standard on Charger Daytona models, delivering an additional 40 horsepower for 15 seconds when activated.

    Dodge CEO Tim Kuniskis unveils the Charger Daytona SRT electric muscle car concept on Aug. 17, 2022 in Pontiac, Mich.  
    Michael Wayland / CNBC

    “We are going to displace superchargers and replace them with kilowatts and PowerShots,” Kuniskis said.
    The design of the new Charger is heavily based on a concept car Dodge revealed in August 2022. It is a modern, yet retro, version of the current Dodge Challenger with a more aerodynamic design that’s still muscular. Most notably, the front end features a large opening for air to pass through, which the company is calling an “R-Wing.”
    Kuniskis said the concept car was the “production car hiding in plain sight” in an attempt to get customers used to the new design.
    Dodge is still working on how the EV will sound, Kuniskis said. The goal is to attempt to retain the roaring sound and driving characteristics of Dodge’s current gas-powered Charger and Challenger.

    The “Fratzog” logo on the “R-Wing” of the 2024 Dodge Charger Daytona Scat Pack EV.

    While EVs can be fast, with a “linear acceleration” that produces astonishing 0-60 mph times, they often lack the driving dynamics that many performance car owners enjoy. It’s a problem auto executives have privately been attempting to solve as the industry transitions to EVs.
    The gas-powered Charger will be powered by a 3.0-liter twin turbo “Hurricane” inline six-cylinder engine that powers other Stellantis vehicles such as the Jeep Wagoneer and Ram 1500.
    The only difference in the EVs and gas vehicles could be the use of a “Fratzog” split deltoid logo for EVs rather than Dodge’s current dual racing stripes. Kuniskis said the company is still determining whether to use the Fratzog — a made-up word initially used by Dodge from 1962 through 1976 — for the gas models. More

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    British neobank Monzo raises $430 million in Alphabet-led round to relaunch in the U.S.

    Monzo has raised $430 million in a new funding round led by CapitalG, the independent venture arm of Google parent company Alphabet.
    Monzo said the fresh cash would be used to accelerate its expansion plans, including a renewed attempt at expanding its service to the U.S.
    It comes after Monzo reported bumper growth in 2023 and entered the black for the first time in the first two months of 2023.

    Monzo CEO TS Anil.

    British digital bank Monzo on Tuesday raised $430 million in fresh capital from investors to help it relaunch its services in the U.S.
    Monzo raised the money in a new funding round led by CapitalG, the independent venture arm of Google parent company Alphabet.

    HongShan, the Chinese venture capital firm that split from Sequoia Capital last year, also backed the round, alongside existing backers Tencent and Passion Capital.
    Monzo, which is one of the U.K.’s most popular app-only banks, said the fresh cash would be used to accelerate its expansion plans. The bank’s CEO, TS Anil, told the Financial Times the capital would allow Monzo to crack the U.S. market after its previous foray was curtailed by U.S. regulators.
    “With backing from global investors, we have the rocket fuel to go after our ambitions harder and faster, building Monzo into the one app that sits at the centre of our customers’ financial lives,” Monzo CEO TS Anil said in a statement.
    “Each milestone we’ve reached to this point has given us more strength and speed to make strides towards our mission — now we’ll scale to even greater heights and seize the huge opportunity ahead.”

    The fresh cash comes off the back of bumper growth for Monzo in 2023.

    The U.K. neobank entered the black for the first time in the first two months of 2023. That came as Monzo reported 88% growth in revenues to £214.5 million ($272 million), up from £114 million in 2022.

    Relaunching in the U.S.

    A fair portion of the cash will be allocated toward helping Monzo relaunch its services in the U.S.
    Monzo previously tried launching in the U.S. in 2019, with a beta product available for American consumers. The company was live in the U.S. via a partnership with the community bank Sutton Bank.
    It wanted to acquire a full U.S. bank license, but it was forced to abandon this plan in 2021 after a fruitless two-year discourse with regulatory authorities.
    Monzo has since opted to focus on re-entering the U.S. with a partnership that would allow it to bypass the requirement of getting a full bank license to serve U.S. customers.
    The firm began a search for a U.S. CEO in 2023 to spearhead a renewed attempt at cracking the American market. It hired Conor Walsh, a former executive at fintech firm Block’s Cash App division, as its new U.S. CEO in October 2023.
    Monzo’s new round also comes after a focus on new products for the bank. Monzo made its first foray into investment products in 2023, launching investment pots that allow customers to park their cash at a range of funds managed by BlackRock with different levels of risk.
    Monzo said it now has more than 9 million retail customers in the U.K., and that it added 2 million of those clients in 2023 alone. The company also has 400,000 business banking customers. More