Business

McDonald’s hiked the price of its cheeseburger in the U.K. for the first time in 14 years as cost pressures bite.
The cost of a cheeseburger has increased from 99 pence ($1.19) to £1.19, marking a 20% price increase.
Other items on McDonald’s U.K. food menu have increased in price by 10p to 20p, including its McNugget share boxes, breakfast meals and meal upgrades.

McDonald’s has raised the price of its cheeseburgers in the U.K. for the first time in 14 years.
Justin Sullivan | Getty Images News | Getty Images

McDonald’s hiked the price of its cheeseburger in the U.K. for the first time in 14 years as cost pressures bite.
The fast food chain confirmed Wednesday that the iconic burger was one among a number of items facing price increases across its U.K. restaurant network.  

The cost of a cheeseburger has increased 20% from 99 pence ($1.19) to £1.19.
The last time McDonald’s raised the price of its cheeseburger in Britain was in the wake of the 2008 global financial crisis.
Other items on McDonald’s U.K. food menu have increased in price by between 10p and 20p, including its McNugget share boxes, breakfast meals and upgrades from medium to large meals.
McDonald’s said that some items will remain unaffected by price hikes. Meanwhile, prices will continue to vary across franchisee-owned restaurants, who can set prices based on recommendations from McDonald’s.

‘Tough choices’

In a statement to customers, the McDonald’s U.K. & Ireland CEO, Alistair Macrow, said that rising inflationary pressures had forced the company to make some “tough choices” over pricing.

“Today’s pressures mean, like many, we are having to make some tough choices about our prices,” Macrow said.
“Just like you, our company, our franchisees who own and operate our restaurants, and our suppliers are all feeling the impact of rising inflation,” he added.
The hikes come as companies are up against increased costs for items like fuel, wages and ingredients as inflation continues to spiral. In the U.K., inflation hit a new peak of 9.4% in June, its highest level in 40 years.
Macrow said the business had delayed price hikes for as long as possible, but that it was no longer possible to absorb rising costs within the business.
“We understand that any price increases are not good news, but we have delayed and minimized these changes for as long as we could,” he said.
It comes a day after McDonald’s reported a jump in global sales of 9.7% for the three months to the end of June, versus the same period last year.
McDonald’s, which runs more than 36,000 restaurants in more than 100 countries, has already implemented a number of price hikes across its U.S. restaurant network since last year.

WATCH LIVEWATCH IN THE APP More

Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer on Tuesday told investors to wait for the market to retreat more before doing any buying.
“The stock market, in its entirety, is still too high, so we have to let the averages come in before putting more money to work,” the “Mad Money” host said.

CNBC’s Jim Cramer on Tuesday told investors to wait for the market to retreat more before doing any buying.
“The stock market, in its entirety, is still too high, so we have to let the averages come in before putting more money to work,” the “Mad Money” host said. “But it might be worth doing so because there are so many good things that can ultimately happen.”

All the major averages declined on Tuesday but are still on track for their best month of the year. Spooked investors sold off retail holdings after Walmart slashed its quarterly and full-year profit estimates due to inflation.
The Federal Reserve’s expected rate increase announcement set for Wednesday and a jam-packed slate of earnings from mega-cap tech names this week threaten to rock the market.
Skyrocketing inflation, the Russia-Ukraine war and Covid lockdowns in China also continue to weigh on the market.

Stock picks and investing trends from CNBC Pro:

Cramer said that investors likely won’t have any insight into where the market’s headed until after the Fed announces its rate increase and they should tread carefully in the meantime – especially as companies continue to report earnings.
“The treacherous thing about this market is that if you see even one stock coming down hard in a particular sector, you know the rest of them are gonna implode, too, perhaps coming down even harder than the original culprit,” he said.

Disclosure: Cramer’s Charitable Trust owns shares of Walmart.

WATCH LIVEWATCH IN THE APP More

The big-box retailer said everyday necessities are eating up more of household budgets and leaving shoppers less money to spend on items they want, such as new clothing.
The announcement raised concerns about shifting consumer behavior and whether inflation has brought pandemic-fueled shopping sprees to an end.
Major retailers including Walmart and Macy’s are scheduled to report earnings in mid-August.

A Walmart Inc. logo is displayed on a sign that reads “Everyday Low Price” at a store in Burbank, California, U.S., on Tuesday, Nov. 26, 2019.
Patrick T. Fallon | Bloomberg | Getty Images

Shares of retailers including Macy’s, American Eagle and Amazon fell Tuesday, a day after Walmart slashed its profit forecast and warned that surging prices for food and gas are squeezing consumers.
The big-box retailer, which is the country’s largest grocer, said everyday necessities are eating up more of household budgets and leaving shoppers less money to spend on items they want, such as new clothing. Walmart said it will have to offer deep discounts to get rid of general merchandise, hurting its profit margins.

For Wall Street, the announcement served as another warning. It heightened concerns about shifting consumer behavior and whether inflation has brought pandemic-fueled shopping sprees to an end. Major retailers including Walmart and Macy’s are scheduled to report earnings in mid-August.

“This is a sneak peek inside the challenges and the decision making that’s happening inside of the household,” said Steph Wissink, a retail analyst for Jefferies.
Even though economists have not declared a recession, Wissink said “we appear to be firmly in a ‘discretionary goods recession.'”
Walmart’s updated outlook comes as investors sift through months of conflicting data points. The labor market has remained strong, but consumer sentiment has weakened. Inflation has grown at the fastest pace in decades, yet airports are bustling with summer travelers. Thousands of Netflix customers have canceled subscriptions, but McDonald’s and Coca-Cola say people have been willing to pay more for burgers and sodas so far.
Other factors have complicated the picture, too. Retailers are lapping a period when shoppers had extra money from stimulus checks and savings from what they typically spent on services like gym memberships, hotels and dining out. Pandemic-related purchases surged as people sprang for new kitchen gadgets, workout equipment and leisurewear — categories that have now largely fallen from favor.

Craig Johnson, founder of retail consultancy Customer Growth Partners, said the slump in discretionary spending is due to lower-income households spending more on essentials because of inflation. In addition, he said higher earners are spending more on services such as travel and entertainment instead of products coming out of the pandemic.
“Walmart’s pre-announcement was hardly a surprise, and will be the first of several similar pre-announcements,” he said.
Target was one of the first companies to signal choppy waters ahead. It cut its forecast for profit margins twice, saying it would have to cancel orders and increase markdowns to get rid of unwanted merchandise. It chalked up the problem to having the wrong inventory, such as TVs, bikes and household appliances that were popular during the pandemic, and said it wanted to clear space for back-to-school goods and holiday shopping.
Kohl’s, Gap, Bath & Body Works and Bed Bath & Beyond issued profit warnings in the past few weeks. And several companies, including online styling service Stitch Fix, video game retailer GameStop and e-commerce company Shopify have announced layoffs.
Mall-based retailers — which sell a lot of discretionary merchandise like apparel and home goods — are expected to get caught in the crosshairs.
Analysts at Deutsche Bank said they expect full-year guidance reductions from all of the apparel retailers the bank covers, as many had been forecasting an acceleration in sales and margins in the back half of the year.
Credit card data from Bank of America shows sales of clothing in the U.S. have been declining since the week ended March 12, and were down 15.6% from year-earlier levels during the week ended July 2.
Lorraine Hutchinson, an analyst for Bank of America Securities, said in a note to clients on Tuesday that her firm is cutting its earnings estimates across the apparel industry as inventories pile up and discounts are becoming rampant.
Hutchinson said niche retailers that cater to higher income shoppers, such as Lululemon, could still perform well. LVMH, which owns high-end brands like Dom Perignon and Louis Vuitton, also signaled Tuesday that higher income shoppers might still be willing to splurge. The company said its sales climbed 19% in the second quarter year over year when stripping out currency changes, led by growth in its fashion and leather goods segment.
For discounters, an upside of surging inflation is that price-sensitive customers may visit their stores more often in search of cheaper household staples. Walmart’s share of U.S. grocery dollars, for example, was 21% as of the end of June, up from 18% six months earlier, according to research firm Numerator.
But groceries have lower profit margins than discretionary items, such as electronics and apparel. That’s the reason why Walmart slashed its profit forecast, even while raising its forecast for same-store sales.

WATCH LIVEWATCH IN THE APP More

Vince McMahon’s retirement from his WWE executive roles has heightened sale speculation, causing shares to rise.
A deal may happen before the company’s TV rights renewal, likely to occur around mid-2023.
The company isn’t currently in sale talks, according to a source familiar with the matter.

World Wrestling Entertainment Inc. Chairman Vince McMahon (L) and wrestler Triple H appear in the ring during the WWE Monday Night Raw show at the Thomas & Mack Center August 24, 2009
Ethan Miller | Getty Images Entertainment | Getty Images

World Wrestling Entertainment’s annual report for 2021 lists a risk factor specifically about the consequences of Vince McMahon’s retirement — an event that happened last week.
“The unexpected loss of the services of Vincent K. McMahon could adversely affect our ability to create popular characters and creative storylines or could otherwise adversely affect our operating results,” WWE wrote in the corporate filing, dated Dec. 31. “The loss of Mr. McMahon due to unexpected retirement, disability, death or other unexpected termination for any reason could have a material adverse effect on our ability to create popular characters and creative storylines or could otherwise adversely affect our operating results.”

That sounds bad for WWE shareholders. So, what happened to WWE shares when McMahon announced his unexpected retirement after the bell Friday? They shot higher, rising more than 8% Monday.
The spike was driven by heightened investor sentiment that a sale is coming. Newly appointed co-CEO Nick Khan openly discussed the concept of selling already this year, months before McMahon stepped down amid a Wall Street Journal investigation that revealed payouts to women who claimed sexual misconduct and infidelity. The WWE has since confirmed $14.6 million in previously unrecorded expenses paid personally by McMahon.
“As we say, we’re open for business,” Khan said in March on The Ringer’s “The Town” podcast.

Potential buyers

The timing of a deal could hinge on the WWE’s upcoming U.S. TV rights renewal, loosely scheduled for mid-2023. An acquirer may decide it makes more sense to buy the company than strike a temporary rights deal. Fox owns the rights to “Smackdown” and NBCUniversal owns the rights to “Raw,” the two WWE TV properties. The deals both end in the fourth quarter of 2024.

Speaking to Matthew Belloni of “The Town,” Khan singled out Comcast’s NBCUniversal as a potential buyer. NBCUniversal’s Peacock currently owns the exclusive live streaming rights for WWE.

“If you look at what does NBCU/Comcast lack that they need, and I think it’s a factual statement, they don’t have the intellectual property that some other companies have. They certainly don’t have the Disney treasure trove of IP, nor should they,” said Khan. “I think they look at us as an entity that has a treasure trove of intellectual property. A lot of it has not been exploited yet….Now it’s up to us to monetize it properly and show the community exactly what we have.”
Global media companies are on the hunt for intellectual property they can use as the basis for recurring TV series and films and theme park attractions, for those that own them. WWE is also attractive as an acquisition because a media owner can sell real-time advertising on live programming and potentially keep audiences paying for traditional pay-TV, a diminishing but lucrative revenue stream. WWE’s “Raw” currently airs on USA Network, an NBCUniversal cable network. To compare, the National Football League nearly doubled its projected TV revenue in its most recent rights renewal deal last year.
WWE has consistently grown annual revenue through the last decade on the strength of its media deals and live events. It announced Monday second-quarter revenue is currently expected at $328 million for the quarter, up 23% from a year ago, with operating income of about $70 million, a 52% increase from a year earlier.
There aren’t many entertainment companies with global scale that come up for sale with an easily digestible price tag for many potential suitors. WWE isn’t engaged in sale talks, according to a person familiar with the matter. But McMahon’s retirement may open the flood gates on offers that could be too good for the company to turn down. WWE, whose shares have climbed about 40% this year contrary to broader stock declines, has a market valuation of about $5 billion. The stock closed down more than 3% on Tuesday, after The Wall Street Journal reported McMahon’s payments were being investigated by federal authorities.
Comcast, Disney, Warner Bros Discovery, Paramount Global, Apple, Amazon and Netflix all make sense an acquirer, given their streaming ambitions, MKM Partners analyst Eric Handler wrote in a note to clients.
A WWE spokesperson declined to comment.

Jumping the gun?

It’s also possible that the new executive leadership – Khan; co-CEO and McMahon’s daughter Stephanie McMahon; Stephanie’s husband, Paul “Triple H” Levesque – will see this as a time to reform WWE.
While it strains credulity to think that Vince McMahon, still the biggest shareholder in WWE, won’t be involved in the company’s major decisions, Levesque, who took over creative control from McMahon, may have an opportunity to freshen storylines and introduce new talent. McMahon, who turns 77 in August, no longer has any executive title at the company.
McMahon may also view selling now as moving out of weakness, which he may see as antithetical to his public persona as someone who is always in charge.
“We suspect the Street will interpret Mr. McMahon’s retirement as a precursor to an eventual sale of WWE,” Citi analyst Jason Bazinet said in a note to clients. “We’re not sure that is a reasonable conclusion since WWE will still be a controlled company with 100% of the Class B shares held by the McMahon family.”
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.

WATCH LIVEWATCH IN THE APP More

Adidas on Tuesday cut its financial forecast for 2022 as the sneaker and athletic brand suffers from a slower recovery in China.
The company also warned of the potential for a slowdown in other markets.
The announcement comes a day after Walmart sent shock waves across the retail sector

Pedestrians walk by a large Adidas logo inside the German multinational sportswear shop.
Miguel Candela | SOPA Images | LightRocket via Getty Images

Adidas on Tuesday cut its financial forecast for 2022 as the sneaker and athletic brand suffers from a slower recovery in China and warned of the potential for a slowdown in other markets.
The announcement comes a day after Walmart sent shock waves across the retail sector when it cut its quarterly and full-year profit guidance. Walmart said inflation is causing shoppers to spend more on necessities such as food and less on items like clothing and electronics.

Adidas said Tuesday that it now expects revenue in Greater China to decline at a double-digit rate for the remainder of the year, given continued widespread Covid-related restrictions in the region. It also said it will have to work to clear excess inventories through the end of the year, and those efforts will weigh on profits.
The Germany-based retailer now forecasts total currency-neutral revenues for the company to grow at a mid-to-high single-digit rate in 2022, compared with previous growth estimates of between 11% to 13%.
Adidas now expects its gross margin to be around 49% in 2022, down from prior guidance of 50.7%, and net income from continuing operations to reach around 1.3 billion euros, down from a prior range of 1.8 billion euros to 1.9 billion euros.
Adidas noted that while it has not experienced a meaningful slowdown in sales nor significant cancellations of wholesale orders in any other market, its adjusted outlook is accounting for a potential slowdown of consumer spending globally.

WATCH LIVEWATCH IN THE APP More

Monday – Friday, 6:00 – 7:00 PM ET

It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

Loading chart…

Loading chart…

Loading chart…

Tilray Brands Inc: “Those will cost you about $3, which is the price of the stock. But if you wait long enough, it’ll only cost you $2.”

Loading chart…

Loading chart…

Loading chart…

Cheniere Energy Inc: “Buy, buy, buy it.”
Disclosure: Cramer’s Charitable Trust owns shares of Halliburton and Johnson & Johnson.

WATCH LIVEWATCH IN THE APP More

Monday – Friday, 6:00 – 7:00 PM ET

Customers who are spending their summers traveling will come back to purchase tech equipment in the fall, Logitech CEO Bracken Darrell told CNBC’s Jim Cramer on Tuesday.
“I think everybody’s doing something this summer, so this is a period when people are out. Our gaming business is down, but I don’t think that’s terribly surprising,” he said on “Mad Money.”

Customers who are spending their summers traveling will come back to purchase tech equipment in the fall, Logitech CEO Bracken Darrell told CNBC’s Jim Cramer on Tuesday.
“I think everybody’s doing something this summer, so this is a period when people are out. Our gaming business is down, but I don’t think that’s terribly surprising,” Darrell said in an interview on “Mad Money.”

“When people come back in the fall, and they’re really getting back to work and getting back at it and they’ve spent their money on the big vacation, I think we’ll see ourselves come back over time. And I’m very optimistic about the secular trends,” he added.
Logitech, like other firms in the office supply and equipment space, saw a boom during the height of the pandemic as Americans shifted to working remotely and sought to upgrade their home workspaces.
The maker of PC peripherals such as keyboards, webcams and speakers missed on its first-quarter earnings on Monday, earning an adjusted 74 cents per share compared with an estimated 85 cents, according to Refinitiv. 
The Swiss-American company made $1.16 billion in revenue, a 12% drop in U.S. dollars from the same quarter a year before. Gaming sales declined 16 percent in U.S. dollars compared with the year-earlier period. 
Shares of Logitech closed up 3.17% on Tuesday.

Sign up now for the CNBC Investing Club to follow Jim Cramer’s every move in the market.
Disclaimer

Questions for Cramer?Call Cramer: 1-800-743-CNBC
Want to take a deep dive into Cramer’s world? Hit him up!Mad Money Twitter – Jim Cramer Twitter – Facebook – Instagram
Questions, comments, suggestions for the “Mad Money” website? [email protected]

WATCH LIVEWATCH IN THE APP More

Chipotle reported weaker-than-expected sales for its second quarter, although higher prices drove strong profit growth.
Facing higher food, packaging and labor costs, Chipotle also said it would hike prices again in August.
“Fortunately for Chipotle, you know, the majority of our customers are a higher household income consumer,” CEO Brian Niccol said on the company’s earnings call.

People visit a Chipotle restaurant on February 09, 2022 in Miami, Florida.
Joe Raedle | Getty Images

Chipotle Mexican Grill on Tuesday reported disappointing sales as price hikes helped boost profits but may have scared away some inflation-weary customers.
“The low-income consumer definitely has pulled back their purchase frequency,” CEO Brian Niccol said on the company’s conference call. “Fortunately for Chipotle, you know, the majority of our customers are a higher household income consumer.”

The company also said it would raise prices again in August, indicating that costs keep rising for its restaurants.

Shares of Chipotle rose more than 8% in extended trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $9.30 adjusted vs. $9.04 expected
Revenue: $2.21 billion vs. $2.24 billion expected

The burrito chain reported second-quarter net income of $259.9 million, or $9.25 per share, up from $188 million, or $6.60 per share, a year earlier. The company said it faced higher costs for key ingredients like avocados, beef and dairy, which offset the benefit from price increases.
Excluding legal costs, restaurant closure expenses and other items, Chipotle earned $9.30 per share in the quarter that ended June 30.

Net sales climbed 17% to $2.21 billion. Same-store sales rose 10.1% in the quarter as consumers resumed ordering their burritos and tacos at Chipotle restaurants. Wall Street was expecting same-store sales growth of 10.9%, according to StreetAccount estimates.
Executives told analysts on the quarterly conference call that sales have slowed since May. However, one bright spot was that restaurants in college towns have seen their seasonal traffic return to pre-pandemic levels. About 15% of Chipotle locations are near colleges, executives said.
Only 39% of transactions during the quarter came from digital orders. The company said its loyalty program has more than 29 million members.
Delivery orders fell slightly, which helped Chipotle’s margins. While many customers love the convenience of delivery, third-party companies like Doordash charge Chipotle commission fees on every order, weighing on its profits.
Looking to the third quarter, Chipotle is projecting same-store sales growth in the mid- to high-single digits. The forecast includes next month’s planned price increases.
During the second quarter, Chipotle’s board approved an additional $300 million to repurchase shares of the company.
Read the full earnings report here.

WATCH LIVEWATCH IN THE APP More