Raphael Stevens

Representatives from more than 30 retailers joined a major industry lobbying group on Capitol Hill, as they ramped up pressure to pass a law that backers say will curb retail theft.
The National Retail Federation escalated its campaign to rally support for the bill, known as the Combating Organized Retail Crime Act, which would make it easier to prosecute theft as a federal felony and set up a system for governments to share resources on crime.

Representatives from more than 30 retailers joined a major industry lobbying group on Capitol Hill on Thursday, as they ramped up pressure to pass a law that backers say will curb retail theft.
The National Retail Federation escalated its campaign to rally support for the bill, known as the Combating Organized Retail Crime Act, which would make it easier to prosecute theft as a federal felony and set up a system for governments to share resources on crime. The retail lobby group dubbed its event “Fight Retail Crime Day.”

Before holding individual meetings with retail officials, the bill’s co-sponsors joined NRF CEO Matthew Shay in a press conference outside the Capitol — where they framed the legislation as critical to retailers’ bottom lines and their employees’ safety.
“You also have to recognize, this is not just the theft, but the danger to the employees, the cost to the consumers, and then the impact upon the individual retailer,” one of the bill’s co-sponsors Sen. Chuck Grassley, R-Iowa, said at a press conference. “[Organized retail crime] has to be dealt with in a comprehensive way. And that’s what our legislation is all about.”

Sen. Chuck Grassley, speaking at a press conference for the lobby group’s “Fight Retail Crime Day.”
Courtney Reagan | CNBC

Organized retail crime is different from shoplifting. The NRF defines it as “the large-scale theft of retail merchandise with the intent to resell the items for financial gain.” It usually involves multiple people who steal large amounts of goods from a range of stores, which a so-called fencing operation then sells, according to the group.The NRF and individual retailers have spoken more than ever in recent months about how retail crime affects their profits, their employees and their customers. Target even cited the trend as it announced it would close nine stores.
Despite those comments, a survey released by the NRF last month found retailers’ losses from theft are largely in line with historical trends, but most respondents reported violence associated with the acts is getting worse. Much of companies’ lost inventory can also come from internal theft or management issues, as William Blair analysts wrote in a research note Thursday.
Even so, the industry has pushed for federal and state laws that aim to crack down on crime. Retailers continued their campaign for policy changes in Washington on Thursday.

The Combating Organized Retail Crime Act was reintroduced earlier this year. It seeks to create a new multi-agency group under the Department of Homeland Security that would pool information and intelligence from many states and local law enforcement sources. Officials want to better detect, track and prosecute members of organized crime rings with new federal standards. 
American Eagle Outfitters chief global asset protection officer Scott McBride, who is meeting with lawmakers to rally support for the law, pointed to the collaboration as a major benefit of the proposal.
“That’s one of the main purposes that allows us to have a charter within a federal agency to actually help us create a clearinghouse to aggregate properly to investigate more efficiently and more in depth,” he said.
While retailers say organized retail crime could lead to higher prices for shoppers and store closures, many of the co-sponsors are focused on what retailers have said is escalating violence associated with the theft.
The NRF’s national retail security survey showed two-thirds of retail respondents reported seeing increased levels of violence and aggression from ORC offenders in 2022 compared with 2021. In the 2021 survey, 81% of respondents reported more violence than in the year prior.
McBride noted that some areas of the country have had a harder time hiring and retaining store employees because of the increase in violence. Most retail store employees are instructed not to intervene when theft is taking place because of the risk of violence.
Rep. Dina Titus, D-Nev., told about a recent incident she witnessed in a Walgreens.
“The person came up with a backpack and just started scraping eyelashes into the backpack and walked out,” she said at the press conference. “I said to the sales lady, ‘Did you see what that guy just did?’ She said, ‘Yeah, he comes in here two or three times a week and we can’t do anything about it because management is afraid somebody might get hurt.'” 
The industry has also focused on the amount of stolen goods needed to prosecute as a felony depending on the location. Trade groups have said many crime rings know the law, and steal just enough to stay below it in each incident.

National Retail Federation CEO Matthew Shay speaking at a press conference for the lobby group’s “Fight Retail Crime Day.”
Courtney Reagan | CNBC

The bill would establish a new federal felony threshold that is also aggregated over any 12-month period rather than a threshold per incident.
“What this legislation will do, is allow prosecutors in the states, if they choose to, to pursue a federal remedy, instead of, or in addition to, a state remedy, when certain thresholds get met,” Shay told CNBC. “So if the total dollar value of the stolen guards exceeds $5,000 in a single year, local prosecutors can pursue a federal charge.”
Some criminal justice experts have questioned whether lowering the threshold will reduce crime, and said enacting stiffer penalties could potentially hurt marginalized groups.
While the members of Congress at the press conference, along with retail representatives and the NRF, acknowledge there is wide support for the measure, time is ticking on the legislative year to move it forward to committee and beyond.
McBride acknowledges passage of the bill would not be a panacea, but “it just adds another layer … to help the retailer and disincentivize the bad guys from using [organized retail crime] as a means for financing their criminal activities.”
The Combating Organized Retail Crime Act would follow another law known as the INFORM Act that went into effect at the end of June, which requires online marketplaces to verify the identity of their sellers with the goal of deterring the sale of stolen or counterfeit goods. Retailers that don’t comply will face fines.
When asked Thursday, Shay said it’s still too early to tell what the effects of the new legislation will be. More

Ford Motor reported third-quarter earnings.
The company withdrew its guidance for the year due to the UAW strike.
Ford said the strike cost the automaker $1.3 billion.

 2024 Ford F-150 Raptor

DETROIT — Ford Motor on Thursday missed Wall Street’s third-quarter earnings expectations, as it restructures its operations and regroups following the end of a nearly six-week U.S. labor strike that in total has cost the company $1.3 billion.
Shares of the automatker fell about 4% in after-hours trading.

Due to the work stoppage by the United Auto Workers union, which ended Wednesday with a tentative deal, the company pulled its previously announced earnings guidance that included adjusted earnings between $11 billion and $12 billion and adjusted free cash flow of $6.5 billion to $7 billion.
Prior to the strikes, which began Sept. 15, the company was “poised” to hit its earnings guidance, Chief Financial Officer John Lawler said.
Here are Ford’s third-quarter results.

Adjusted earnings per share: 39 cents vs. 45 cents expected by LSEG, formerly known as Refinitiv.
Automotive revenue: $41.18 billion vs. $41.22 billion expected by LSEG.

Lawler blamed the misses on the UAW strike as well as cost and quality issues, which have plagued the automaker’s operations in recent years.
“It is the cost and quality that we need to continue working on to improve the business,” Lawler told reporters during a call. “There’s a lot of positives within the business, and, unfortunately, it’s really not all shining through because of our cost and quality.”

Lawler said the UAW strike has cost the company $1.3 billion in lost production to date, including roughly $100 million during the third quarter. He said the company lost production of about 80,000 vehicles so far due to the strike, and restarting production will be a “tremendous amount of work.”
For the third quarter, Ford swung to a net income of $1.2 billion, or 30 cents a share, from an $827 million loss, or 21 cents a share, a year earlier. Adjusting for certain items, per-share earnings were 39 cents.
Overall revenue during the period increased 11% to $43.8 billion, up from $39.39 billion a year earlier. Adjusted earnings before interest and taxes (EBIT) increased 22% to $2.2 billion from the year-earlier period.
Ford’s lackluster results come two days after crosstown rival General Motors beat Wall Street’s third-quarter expectations by reporting adjusted earnings per share of $2.28 and revenue of $44.13 billion.

What’s next for Ford’s EV business?

Ford’s traditional business operations, known as Ford Blue, earned $1.72 billion during the quarter, while its Ford Pro commercial business earned $1.65 billion. Its Model e electric vehicle unit posted a $1.33 billion loss in the July to September period.
Lawler said the company will be delaying about $12 billion in previously announced EV investments, including postponing construction of an electric vehicle battery plant in Kentucky. It’s still moving forward with a new EV plant and campus in west Tennessee called Blue Oval City.
Demand has been lower than expected for the vehicles amid increasing raw material and labor costs as well as pricing pressure caused by EV leader Tesla.
“The transition to EVs is well underway. Adoption is growing, even if pace is slower than what the industry, including us, expected,” Lawler said. “Along the way, we’re going to balance production of gas, hybrid and electric vehicles in ways that many companies can’t, based on what consumers want.”
Lawler said the UAW deal, if ratified by members, is going to add $850 to $900 per vehicle assembled. He said Ford will work to “find productivity and efficiencies and cost reductions throughout the company” to offset the additional costs and deliver on previously announced profitability targets.
“We’re going to have to find efficiencies and productivity throughout the company to help mitigate the impacts of the higher labor costs,” he said.

What impact will the UAW deal have?

Lawler declined to estimate how much the deal, which runs four and a half years, will cost the company. The overall increase is estimated to be $6.2 billion, according to Deutsche Bank.
The pact includes 25% pay increases over the terms of the agreement, including an initial increase of 11%. The raises and benefits cumulatively raise the top wage to more than $40 an hour, including an increase of 68% for starting wages to over $28 an hour.
It also includes reinstatement of cost-of-living adjustments, a three-year path to top wages and right to strike over plant closures, among other significantly enhanced benefits.
The Detroit automakers have been navigating ongoing strikes by members of the UAW after the union and the companies failed to reach tentative labor deals by a Sept. 14 deadline for contracts covering 146,000 workers.
The UAW said Wednesday night that Ford workers who were on strike will return to work during voting, putting pressure on General Motors and Stellantis to agree to the terms of the tentative agreement.
— CNBC’s Michael Bloom contributed to this article. More

Chipotle’s third-quarter earnings topped Wall Street’s estimates.
The company reported quarterly same-store sales growth of 5%.
The burrito chain recently raised prices for the first time in over a year, citing inflation.

Food is served at a Chipotle restaurant on in Chicago, Illinois.
Scott Olson | Getty Images

Chipotle Mexican Grill on Thursday reported quarterly earnings that beat expectations, helped by higher menu prices for its burritos and bowls.
Shares of the company rose more than 2% in extended trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: $11.36 adjusted vs. $10.55 expected
Revenue: $2.47 billion, in line with expectations

The burrito chain reported third-quarter net income of $313.2 million, or $11.32 per share, up from $257.1 million, or $9.20 per share, a year earlier. Excluding corporate-restructuring costs, Chipotle earned $11.36 per share.
Beef and queso costs rose this quarter, largely offsetting last year’s menu price hikes. Earlier this month, the restaurant chain raised menu prices for the first time in more than a year, citing inflation.
The company had paused its aggressive price hikes earlier this year as consumers pulled back their spending. Still, executives have maintained that Chipotle has pricing power and more room to run.
“I think the Chipotle value, when we haven’t raised prices in over a year until this latest action, is coming through, and people are choosing to dine at Chipotle because we are very affordable,” CFO Jack Hartung said on the company’s conference call.

Customers in California can also expect to pay even more for their burritos next year. Executives said the company will pass along the higher labor costs that will come from California raising wages for fast-food workers to $20 an hour in April. About 15% of Chipotle’s restaurants are in California.
“We are definitely going to pass this on, we just haven’t made a final decision on as to what level yet,” Hartung said.
Chipotle’s net sales climbed 11.3% to $2.47 billion. Same-store sales rose 5%, beating StreetAccount estimates of 4.6%. The company credited higher transactions and menu prices for the quarter’s same-store sales growth. Chipotle prices were up 2.8% compared with the year-ago period, due to last year’s price hikes.
CEO Brian Niccol said that traffic trends have remained strong in October, helped by the recent return of carne asada as a limited-time menu item.
Chipotle opened 62 new restaurants during the quarter. All but eight of those locations featured a “Chipotlane,” a drive-thru lane reserved for picking up digital orders.
Looking to 2024, the company expects that it will open 285 to 315 new restaurants.
Chipotle also reiterated its forecast for 2023 same-store sales growth in the mid-to-high single digit range. More

Ford said customers in North America are unwilling to pay a premium for an EV.
The company, in turn, is postponing about $12 billion in EV manufacturing investment.
Ford’s Model e EV unit lost about $3.1 billion through three quarters this year.

Ford workers produce the electric F-150 Lightning pickup on Dec. 13, 2022 at the automaker’s Ford Rouge Electric Vehicle Center (REVC).
Michael Wayland | CNBC

As a result, it’s postponing about $12 billion in planned spending on new EV manufacturing capacity.
Customers’ reluctance to pay extra for EVs has complicated Ford’s ambitious and expensive plans to sharply increase production of those vehicles. While Ford’s – and the industry’s – sales of EVs are growing, they aren’t growing at the pace Ford had expected.

Ford executives emphasized that the company isn’t cutting back its spending on future electric vehicle models. But it now plans to ramp up its EV manufacturing capacity, and its spending on that capacity, more gradually than previously planned.
“We’re not moving away from our second generation [EV] products,” CFO John Lawler said in a media briefing Thursday. “We are, though, looking at the pace of capacity that we’re putting in place. We are going to push out some of that investment.”  
Ford Motor said Thursday that many customers in North America are no longer willing to pay a premium for an electric vehicle over an internal-combustion or hybrid alternative.
Lawler said that Ford will postpone about $12 billion in planned spending on manufacturing capacity for EVs, including a planned second battery plant at a new campus in Kentucky. But, he noted, construction of Blue Oval City – Ford’s new EV manufacturing campus in Tennessee – will continue as originally planned.
“The customer is going to decide what the volumes are,” Lawler said. “Ford is able to balance production of gas, hybrid and electric vehicles to match the speed of EV adoption in a way that others can’t.”

As part of its third-quarter earnings report, Ford said on Thursday that its electric-vehicle business unit, called Ford Model e, lost $1.3 billion on an operating basis in the period. That’s roughly double its year-ago loss, despite a 26% increase in revenue.
Through the first three quarters of 2023, Model e posted an operating loss of about $3.1 billion, on track with Ford’s previous guidance calling for a full-year operating loss of $4.5 billion for the Model e business unit.
Ford withdrew all of its 2023 guidance Thursday in light of its tentative deal with the United Auto Workers labor union. More

Toymakers Hasbro and Mattel lowered their sales outlooks for the fourth quarter, amid a tough retail environment.
Hasbro’s stock closed down 12% on Thursday, while Mattel closed down 8%.

Game maker Hasbro
Justin Sullivan | Getty Images

Shares of Hasbro and Mattel sank on Thursday, as both toymakers suggested sales will slow in the fourth quarter.
Hasbro’s stock closed down 12% on Thursday, while Mattel closed down 8%.

The companies face challenges entering the critical fourth quarter, they said as they separately reported third-quarter earnings. Consumers are cutting back on spending while inflation pressures their budgets as the holiday season approaches. Toys and games, products both Hasbro and Mattel are known for, could be on the chopping block this season as consumers watch their spending.
Hasbro, which houses iconic brands like Play-Doh and Monopoly, cut its guidance for the full year. It projected a 13% to 15% revenue decline for a year, a worse decrease than its previous forecast of a 3% to 6% drop in revenue. A “softer toy outlook” drove the guidance, the company said in its earnings release Thursday.
“We have a cautious outlook on the holiday,” CEO Chris Cocks said during Hasbro’s earnings call Thursday. “We do not have a real solid view on where the market will go.”
Mattel’s implied fourth quarter guidance on toy sales offered Wednesday also spooked Wall Street, despite its strong third-quarter results.
The company’s third-quarter earnings beat “was largely offset by a weaker-than-expected implied guide” for the fourth quarter, which suggested lackluster performance for Mattel’s business outside of Barbie products, analysts at Citi Research said Thursday.

While Mattel beat Wall Street expectations on the top and bottom lines, Hasbro’s third-quarter report fell short of analyst estimates compiled by LSEG, formerly known as Refinitiv. The company’s adjusted earnings per share of $1.64 missed expectations of $1.70 a share, and revenue of $1.5 billion missed an estimate of $1.64 billion.
Hasbro’s revenue fell 10% for the quarter compared to the year-ago period, largely driven by decreases in its consumer and entertainment segments. Conversely, Mattel on Wednesday posted a revenue increase of 9%, largely driven by a boost in Barbie sales in conjunction with the blockbuster summer film.
Hasbro’s consumer segment sales, which includes popular toy brands like Nerf, My Little Pony and Transformers, fell 18%. The company said the decline was due to “exited licenses and softer category trends.”
Hasbro’s entertainment segment revenue also lagged. It fell a whopping 42% year over year, largely due to the writers’ and actors’ strikes, the company said. Hasbro said earlier this year that it will sell its film and TV business eOne, home of Peppa Pig, to Lionsgate for $500 million. More

UPS reported third quarter earnings.
The company cut its revenue forecast for the year.
UPS shares fell after the earnings report.

A UPS driver pulls a cart with packages while making deliveries on June 12, 2023 in San Francisco, California. 
Justin Sullivan | Getty Images

Shares of the United Parcel Service closed 6% lower Thursday after the company reported a bigger-than-expected revenue decline and cut its revenue guidance for the year.
The stock hit a new 52-week low.

Here’s how the company performed compared to Wall Street estimates:

Adjusted earnings: $1.57 vs. $1.52 per share expected, according to LSEG, formerly known as Refinitiv
Revenue: $21.06 billion vs. $21.46 billion expected

For the three-month period ended Sept. 30, UPS reported earnings of $1.13 billion, or $1.31 a share, compared with $2.58 billion, or $2.96 a share, a year earlier. Adjusted for one-time earnings, per share earnings were $1.57.
Revenue declined to $21.06 billion from $24.16 billion.
The company also lowered its revenue outlook for the full year. UPS now expects this year’s consolidated revenue to be between $91.3 billion and $92.3 billion, down from its previous projection of $93 billion.
The delivery giant cited global economic uncertainty as the main factor in lowering its outlook. It didn’t directly mention any financial impacts from negotiations with Teamsters in August in efforts to avoid a labor strike.
“While unfavorable macro-economic conditions negatively impacted global demand in the quarter, our U.S. labor contract was fully ratified in early September and volume that diverted during our labor negotiations is starting to return to our network,” CEO Carol Tomé said in a statement. “Looking ahead, we are well-prepared for the peak holiday season.” More

Altria Group reported third-quarter results Thursday that fell short of Wall Street’s expectations as demand for its core cigarette business cools and illicit e-vapor products flood the market.
The company narrowed its guidance for 2023 full-year adjusted EPS.
The Marlboro maker said its domestic cigarette shipment volume decreased 11.6%, primarily driven by wider declines across the industry and competition from illicit e-vapor products, among other factors.

Packs of Marlboro cigarettes are displayed at a smoke shop on April 28, 2023 in San Francisco, California. 
Justin Sullivan | Getty Images

Altria Group, the parent company of Philip Morris USA and the nation’s largest tobacco company, reported third-quarter results Thursday that fell short of Wall Street’s expectations as demand for its core cigarette business cools and illicit e-vapor products flood the market.
Here’s how the company did, compared to the consensus among analysts surveyed by LSEG, formerly known as Refinitiv:

Earnings per share: $1.28 adjusted vs. $1.29 expected
Revenue: $5.28 billion adjusted vs. $5.43 billion expected

Altria’s overall revenue fell in its third quarter, decreasing 4.1% year over year to $6.28 billion. Net of excise tax, the company recorded revenue of $5.28 billion, down 2.5%. The company said the drop was in part due to lower net revenues for its smokeable products.
Net earnings for the period were $2.17 billion, or $1.22 per share, compared with $224 million, or 12 cents per share, a year earlier. Adjusting for one-time items associated with the company’s investment in Anheuser-Busch InBev as well as litigation and acquisition costs, Altria earned $1.28 per share.
The company narrowed its guidance for 2023 full-year adjusted EPS to a range of $4.91 to $4.98, or a growth rate of 1.5% to 3% from adjusted EPS of $4.84 in the prior year.
The Marlboro maker said its domestic cigarette shipment volume decreased 11.6%, primarily driven by wider declines across the industry and competition from illicit e-vapor products, among other factors.
In a conference call with analysts, Altria CEO Billy Gifford said the lack of regulation of illicit e-vapor products has come at the expense of legal operators and approved. It said enforcement by the FDA has been “inadequate and ineffective.”

Although federal crackdowns have placed more restrictions on the flavors and marketing for tobacco products, illicit operators are skirting many tobacco-related laws and are flooding the market with disposable e-cigarettes that aren’t FDA-approved and are illegal to sell.
In June, Altria completed its acquisition of NJOY’s e-vapor product portfolio for approximately $2.75 billion. The deal included the product NJOY ACE, the only pod-based vape cleared for the U.S. market by the FDA.
The company said it expects ACE distribution to reach a total of 70,000 stores by the end of the year.
So far this year, Altria has recorded pre-tax charges of $424 million for tobacco litigation, including the settlement of JUUL-related litigation. In May, Altria settled at least 6,000 lawsuits accusing it of fueling a teen vaping epidemic through its former investment in Juul.
Gifford said the company’s traditional tobacco business was nevertheless “resilient in a dynamic operating environment.”
“I believe we have the appropriate strategies and people in place to execute our growth plans. I continue to believe that we can achieve our vision and create long-term value for our shareholders,” Gifford said in a statement.
Like many other tobacco companies, Altria is moving beyond traditional, combustible cigarettes and towards smoke-free products. More