Business

JOIN US FOR EVOLVE GLOBAL SUMMIT ON JULY 13, 2022

EVOLVE GLOBAL SUMMIT 2022
Evolve Events

Alex Karp, CEO of Palantir, whose clients largely include the public sector and governments, said at the Aspen Ideas Festival that he has always spoken out on topics he has expertise in.
The call for companies and executives to speak out out on societal issues has perhaps never been higher in the wake of the U.S. Supreme Court decision overturning Roe v. Wade.
Karp said his 30-year relationship with Peter Thiel, including many fights, has helped him to navigate business and political differences.

As U.S. companies and executives balance publicly addressing hot-button political topics, Palantir CEO Alex Karp said many still struggle with figuring out when they must speak out and when they shouldn’t.
“Companies have a problem that it’s very hard for them to tether what they’re producing to a higher mission, and therefore they cannot exactly adjudicate where they have to speak out and where maybe they don’t have to speak out,” Karp told CNBC’s Andrew Ross Sorkin at the Aspen Ideas Festival this week. “Then there’s just general issues of, if you’re going to use our product for things we don’t support, we feel like we have to speak out.”

The call for companies to take a stand on social issues has only increased in recent years, most recently around abortion following the U.S. Supreme Court overturning Roe v. Wade last week.
Karp, who noted he is pro-choice, said that Palantir has always” provided for people to leave states or go to places where their rights are protected, and we pay for people and their families to move if they need access to medical treatment or abortions.”
Karp also addressed how differing views have played out in his own company with Palantir co-founder Peter Thiel, one of the largest donors to Republican candidates in recent years. Thiel was also on the executive committee of the transition team for President Donald Trump, who Karp has both publicly and privately criticized.
“One of the problems in this country is that there are not enough people like Peter and me; we’ve been fighting about things for 30 years,” Karp said. “You have to take the political dialogue, and then the business dialogue we tend to have similar assumptions but not always the same interpretation. … I really enjoy my discourse with Peter on areas where I think he’s the best in the world, and we don’t agree politically.”

Alex Karp, CEO of Palantir arrives ahead of a “Tech For Good” meetup at Hotel Marigny in Paris on May 15, 2019, held to discuss good conduct for technology giants.
Bertrand Guay | AFP | Getty Images

Karp acknowledged that while he “got in trouble” for some of the things he said about Trump publicly, it was also insights gained from speaking with people like Thiel that made him believe Trump was going to win in 2016.

“I think that’s a huge problem in our society; I’d like to hear what someone else thinks, and by the way I kind of think I’m right so if you have your argument we can argue about it,” he said. “I think a lot of my progressive friends have a little bit of an inferiority complex – if you’re right, why do you care that you’re having a dialogue with someone that’s wrong? I like that.”
“I have pretty strong opinions; prove me wrong, I’d love to hear it,” he said.
As companies come under fire from politicians for sharing views they don’t agree with, such as in the case of Disney and Florida Gov. Ron DeSantis, a company like Palantir that has much of its business with the public sector and governments could potentially face similar blowback.
While holding government contracts has not stopped SpaceX CEO Elon Musk from being critical of a standing president, Karp said that part of the issue has stemmed from companies who speak out on issues that aren’t in their general focus.
“We have all these people that tell me I shouldn’t speak publicly on lots of issues, and I speak pretty freely on all sorts of things that could get me into trouble and I think our clients are very tolerant of that,” Karp said. “But they also know that I’m in the business … the most important issues of the time right now are issues I have some modicum of expertise.”
Karp said those issues are: “What will the world look like if our adversaries win, or if we win? Under what conditions will software be implemented? Will that software rob us of our civil liberties? How can that software protect our civil liberties?”
“On those issues, I speak out all the time,” he said.
Disclosure: NBCUniversal News Group is the media partner of the Aspen Ideas Festival. More

Monday – Friday, 6:00 – 7:00 PM ET

Pinterest is working on helping users take tangible actions on their mood boards and pins, new CEO Bill Ready told CNBC’s Jim Cramer on Wednesday.
“There’s a lot we can do to help them take more action on that intent, whether that action is making, or doing, or in some cases buying,” Ready said in an interview on “Mad Money.”

Pinterest is working on helping users take tangible actions on their mood boards and pins, new CEO Bill Ready told CNBC’s Jim Cramer on Wednesday.
“There’s a lot we can do to help them take more action on that intent, whether that action is making, or doing, or in some cases buying. There’s a variety of ways that we can do that. It may not necessarily entail even a buy button all the time,” Ready said in an interview on “Mad Money.”

“I’ve used Pinterest for designing a home, for planning birthday parties. And these are all things where you get great ideas, and you don’t want necessarily buying to be shoved in your face. But when you see something you want to take action on, you want to be able to get to the way that you’re going to do that,” he added.
Pinterest announced Tuesday that Ready, who previously led Google’s commerce business, would assume the role of chief executive with co-founder Ben Silbermann stepping down from the role. 
Silbermann, who now holds the newly created position of executive chairman, echoed his successor’s points about encouraging shopping on Pinterest.
“The company’s got a great pipeline of new products that are coming out from our investors and creators to some of the shopping things that Bill talked about. … I think that we’re in a really good position,” he said, pointing to the company’s recent acquisition of The Yes, an artificial-intelligence powered fashion shopping platform.
Pinterest beat on earnings and revenue in its first quarter, based on Refinitiv consensus estimates. While the company said it expects second-quarter revenue to increase about 11% from the year-earlier period, it cited headwinds including supply chain snarls and Russia’s invasion of Ukraine in its letter to shareholders.

Shares of Pinterest closed up 1.32% on Wednesday.
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

High-end furniture chain RH on Wednesday slashed its outlook for 2022 revenue, anticipating consumer demand for its products will continue to soften in the back half of the year.
RH shares fell nearly 8% in after-hours trading following the release.

Jason Kempin | Getty Images Entertainment | Getty Images

High-end furniture chain RH on Wednesday slashed its outlook for 2022 revenue, anticipating consumer demand for its products will continue to soften in the back half of the year.
The company now sees annual sales down between 2% and 5%, compared with prior expectations that saw sales flat to up 2%. It said it still anticipates revenue in its fiscal second quarter to be down between 1% and 3% from prior-year levels.

RH shares fell nearly 8% in after-hours trading following the release. The stock had already fallen almost 3% during regular trading, closing at $237.32.
“With mortgage rates double last year’s levels, luxury home sales down 18% in the first quarter, and the Federal Reserve’s forecast for another 175 basis point increase to the Fed Funds Rate by year end, our expectation is that demand will continue to slow throughout the year,” CEO Gary Friedman said in a statement.
He added that the next several quarters will pose a short-term challenge for the company, as RH laps a period of heightened demand in the earlier days of the Covid pandemic.
The company warned in early June that it was seeing softening demand pegged to the Russian invasion of Ukraine. Still, Friedman said at the time that 2022 was poised to mark the beginning of a new growth chapter for the business.
RH’s revenue in the three-month period ended April 30 totaled $957 million, up from $861 million in the prior-year period.

RH also said Wednesday that it has not repurchased any stock since announcing on June 2 the expansion of its common stock repurchase plan.
The retailer’s shares have fallen 55% year to date, as of Wednesday’s market close.

WATCH LIVEWATCH IN THE APP More

There’s been record demand for government Series I savings bonds, an inflation-protected and nearly risk-free asset that offers an eye-popping 9.62% annual return through October.
However, it’s not easy to purchase these assets through TreasuryDirect, a 20-year-old platform, and investors may experience other pain points, experts say.

Eakgrunge | Istock | Getty Images

There’s been record demand for federal Series I savings bonds, an inflation-protected and nearly risk-free asset, offering an eye-popping 9.62% annual return through October.
However, it’s not easy to buy I bonds through TreasuryDirect, a 20-year-old platform run by the U.S. Department of the Treasury, financial advisors say. 

“It’s like going to the DMV online,” said Matt Stephens, a certified financial planner with AdvicePoint in Wilmington, North Carolina, explaining how the process of buying I bonds is especially difficult for his older clients.

Inflation is driving up demand for I bonds

I bond interest has two parts, a fixed rate and variable rate, adjusting every six months based on the Consumer Price Index, a key measure of inflation.
More from Personal Finance:Series I bonds to deliver a record 9.62% interest for next 6 monthsWhere Series I bonds may work in your portfolio, according to advisorsSuze Orman: Series I bonds are investment every person should have
Since the annual rate jumped to 7.12% in November, 1.85 million new savings bond accounts have been opened through June 24, according to a Treasury official. 
“We’re committed to ensuring that TreasuryDirect users have a positive customer experience,” a Treasury spokesperson said, highlighting recent changes, such as shifted resources, hiring temporary staff and website and phone support improvements.

“We are also in the process of developing an updated, modern replacement for the current TreasuryDirect system,” they added.

How to purchase I bonds

There are two ways to buy I bonds. You can buy them electronically via TreasuryDirect, with an individual limit of $10,000 per person per calendar year. You can also buy them in paper form with your federal tax refund, enabling another $5,000 purchase per person. 
Before buying electronic I bonds, you’ll need to open a TreasuryDirect account by providing your tax ID number, email address and banking details.

The password log-in page at TreasuryDirect.gov.

However, you’ll want to keep your account number and password safe, as multiple failed attempts may lock your account. This requires a call to customer service, which is currently experiencing “higher than usual call volume,” according to the website.
Another possible hiccup: You can’t rely on some password managers to autofill your credentials since part of the login requires you to type the password on a virtual keyboard with your cursor.

Some accounts need additional identity verification

Tommy Blackburn, a Richmond, Virginia-based CFP and senior financial planner at Mason and Associates who frequently helps clients purchase I bonds, said one of the main pain points is additional identity verification.

It can be very difficult obtaining the signature guarantee from major financial institutions and local ones.

Tommy Blackburn
senior financial planner at Mason and Associates

In some cases, investors must fill out an account authorization form to prevent fraud, according to a Treasury official. This requires signing the form at a bank or credit union, notated with a “signature guarantee,” before mailing it back.
“In our experience, it can be very difficult obtaining the signature guarantee from major financial institutions and local ones,” Blackburn said. However, a Treasury official said they are working to expand certification to any notary public. 

There are extra steps to change bank account details

There’s a similar process for updating banking details for TreasuryDirect, requiring a bank change request form, explained Ken Tumin, founder and editor of DepositAccounts.com, who recently went through the process. 
When opening a TreasuryDirect account, “you definitely want to choose a bank account that you plan to maintain and keep long-term,” Tumin suggested. 

I bonds aren’t right for all investors 

While the current I bond rate may be appealing, it’s important to consider whether these assets align with your goals before purchasing, experts say.
There are relatively low purchase limits, with a few exceptions, and no access to the funds for one year, making it suitable as a “supplement to your emergency fund,” Stephens said. 

WATCH LIVEWATCH IN THE APP More

Unilever said it sold Ben & Jerry’s ice cream operations in Israel.
Avi Zinger’s American Quality Products already licenses Ben & Jerry’s ice cream for sale in the country.
The move will prevent the company from having to end sales of the ice cream in Israel.

Consumer products giant Unilever said it reached a deal that will let its Ben & Jerry’s ice cream business continue selling in Israel.
The company said Wednesday that it sold the Israeli branch of the ice cream brand for an undisclosed sum to Avi Zinger, whose American Quality Products already licenses Ben & Jerry’s ice cream for sale in the country.

The move by Unilever comes after Ben & Jerry’s, which has an independent board, said last summer that it was stopping sales in the territory that has been occupied by Israel since the Six Day War in 1967.  Palestinians want that land for a state of their own and supporters have gotten behind a global campaign known as “BDS,” which stands for boycott, divest and sanction and encourages people to avoid buying from companies that operate in the area.
Unilever’s sale to Zinger effectively overrides the decision by Ben & Jerry’s independent board last summer. American Quality Products said it will continue to sell Ben & Jerry’s under Hebrew and Arabic names throughout the country and occupied territories.
In a phone call with CNBC on Wednesday, Zinger said “this is the best thing that I could have dreamed for me and my employees.”
Ben & Jerry’s and its board chair, Anuradha Mittal, did not immediately respond to requests for comment. Sources inside the company said the board is likely to meet soon to discuss the issue. Mittal was seen as being behind the original decision to pull out of Israel. Ben & Jerry’s Jewish founders, Bennett Cohen and Jerry Greenfield defended the decision in an op-ed to The New York Times last summer.
Ben & Jerry’s decision to pull out of parts of Israel last year was controversial and triggered several states including Florida, Texas, New Jersey and Colorado to start divesting their shares of Unilever.

A scoop on Ben and Jerry’s Cherry Garcia ice cream on Free Cone Day in 2016.
Source: Ben and Jerry’s

A representative for activist investor Nelson Peltz, who is set to join Unilever’s board next month, said in a statement that Trian Partners “commends the Unilever team and Avi Zinger for reaching this new arrangement to keep Ben & Jerry’s in Israel and ensure its ice cream stays available to all consumers. Respect and tolerance have prevailed.”
Trian amassed about 1.5% of the company’s shares over the last year. Peltz was granted a meeting with Unilever CEO Alan Jope late last year as part of his role of board chair for the Simon Wiesenthal Center, which fights antisemitism and the delegitimization of Israel.
Israel’s government sees the occupied territories as part of its economy and any efforts to boycott business in the areas are seen as applying to the country. Stopping sales of the ice cream in the occupied territories would have ended sales throughout Israel.
After learning of Ben & Jerry’s decision last year, Israeli Foreign Minister Yair Lapid instructed consulates in the United States to urge Unilever to reverse Ben & Jerry’s decision. 
“The Ben & Jerry’s factory in Israel is a microcosm of the diversity of Israeli society,” said Lapid, who is also Israel’s incoming prime minister, in a statement. “Today’s victory is a victory for all those who know that the struggle against BDS is, first and foremost, a struggle for partnership and dialogue, and against discrimination and hate.”
American Quality Products directly employs 170 people in Israel, while dairies, delivery firms and others that support the business have an economic ecosystem of about 2,000 Jewish and Arab Israelis, the company said.
“There was a lot of uncertainty but now we know we’ll be able to stay in business forever,” said Zinger, who has run the company for 35 years.

Ben Cohen and Jerry Greenfield, of Ben and Jerry’s Ice Cream, speak at Campaign to End Qualified Immunity in front of the Supreme Court in Washington, May 20, 2021.
Ken Cedeno | Reuters

WATCH LIVEWATCH IN THE APP More

Liberty Media’s John Malone
Michael Kovac | Getty Images

Written in the Starz?

Lionsgate is planning a spinoff of Starz, home of “Outlander” and “Power,” by early next year.

Vivendi’s Canal Plus and private equity firm Apollo Global, in tandem with streaming distributor Roku, have both made preliminary bids for a 20% stake, sources say.

A deal could be announced as soon as August.

A publicly traded Starz may look to increase in size by targeting other subscale media and entertainment companies.

By “free radicals,” Malone was referring to affordable media companies, such as AMC Networks, which is controlled by the Dolan family, or A&E Networks, co-owned by Hearst and Disney, which lacked the global scale to compete with Disney and Comcast’s NBCUniversal for original programming and A-list talent.
While these companies may wallow independently, banding together would give them balance sheet heft and leverage to increase programming fees on pay-TV providers.
Malone’s vision never materialized. Lionsgate hasn’t made another acquisition of significance since Starz and has seen its market capitalization shrink in recent years. Lionsgate’s current market valuation is just over $2 billion. In 2016, Lionsgate paid $4.4 billion for Starz. Malone is no longer a Lionsgate shareholder, selling the remainder of his voting shares in 2019.
But even without Malone’s influence, and even amid a transforming media and entertainment landscape, Starz may carry the torch of his vision.

Starz to be spun

In the last six years, streaming video has become the media world’s north star. Pushing together companies to gain a negotiation advantage against pay-TV operators in carriage fee disputes is anachronistic as millions of Americans cancel cable each year. Investors have viewed Lionsgate as an also-ran in the streaming wars.
That’s led Lionsgate’s management and board to decide spinning off Starz is its best course of action. As part of the Starz spinoff, a minority stake will likely be sold to help set a market valuation for the new public company. Vivendi’s Canal Plus and private equity firm Apollo Global, in tandem with streaming distributor Roku, have both made preliminary bids for a 20% stake, according to people familiar with the matter.
Starz and Lionsgate “will do great trading separately,” said Jimmy Barge, Lionsgate’s chief financial officer, earlier this month. “They can pursue their own initiatives, opportunities that might not otherwise arise for the combined company.”
A deal could be announced as soon as Aug. 4, Lionsgate’s estimated next earnings date, the people said. A spokesperson for Starz declined to comment.
As an initial valuation, based on the minority stake sale, Starz will likely be pegged somewhere between $2 billion and $4 billion, said the people, who asked not to be named because the discussions are private. In other words, Starz alone may be valued with a higher market valuation than Starz and Lionsgate combined.

After the spinoff

A publicly traded Starz will have to get bigger to compete with Netflix, Disney, Warner Bros. Discovery, Paramount Global, NBCUniversal, Apple and Amazon in the streaming wars. Even several of those companies may not be large enough on their own.
Starz has 24.5 million global streaming subscribers. When combined with Starz’s premium cable network, which competes with HBO and Showtime, it has 35.8 million subscribers worldwide. For comparison, Netflix has 222 million global subscribers.
Starz tends to focus on female and Black audiences and has had some success with shows including “Power,” “Outlander” and “Gaslit,” the recently released series about Watergate based on season one of the “Slow Burn” podcast, starring Sean Penn and Julia Roberts.
“Starz seems to have strong content but is struggling to attract attention,” JPMorgan analyst Philip Cusick wrote in a note to clients. “This is in line with our thesis that streaming is a scale business, and we believe Starz content is better in another distributor’s hands.”
Lionsgate has attempted to sell Starz for years. It got fairly close in 2019, nearly striking a deal with CBS. That sale never crossed the finish line because vice chair and controlling shareholder Shari Redstone chose instead to push Viacom together with CBS. While former CBS Chief Executive Officer Joseph Ianniello had interest in acquiring Starz, Bob Bakish, the CEO of the combined ViacomCBS, now named Paramount Global, didn’t share his vision, two of the people said.
Every large media company has ultimately decided not to acquire Starz. Buying a subscale streaming service with ties to the legacy pay-TV model is a hard sell for Wall Street. Investors don’t want to see large media companies spending their acquisition cash on deals that don’t move the needle on future growth.

Ways for Starz to grow

Starz CEO Jeffrey Hirsch
Source: Starz

That gives Starz one other path to get bigger quickly: acquire or merge with other companies, itself. Two possible targets are, once again, AMC Networks and A&E Networks. AMC Networks has a market valuation of $1.3 billion. An AMC spokesperson declined to comment on a potential merger. An A&E spokesperson didn’t immediately respond for comment.
Investors may be far more sanguine on Starz and AMC Networks merging than a larger company picking off smaller rivals. Bulking up in a series of deals won’t make Starz a major player overnight. But it could give it the size to acquire carve outs and divestitures from other large media companies. Over time, Starz could conceivably become a media company with enough scale to be a competitive threat. Or, at the very least, not an afterthought.
Starz CEO Jeff Hirsch hinted at this possibility in an interview with CNBC in 2020.
“You’ll see these big six players, but over time they’ll also start to look at their portfolio of assets and say ‘ok, does this fit?’,” Hirsch said. “You’ll start to see assets fall out of those big six that will then constitute a new four or five that will come up. You’ve still got Sony, MGM, Lionsgate, AMC. John Malone has talked about putting some of these smaller dots together.” (MGM has since been acquired by Amazon.)
It’s possible AMC Networks and A&E will balk at selling. But they, too, find themselves as legacy holdovers — owners of cable networks with declining values. Starz could act as a sort of “horizontal acquisition machine” in the coming years to stay viable.
If you’ve heard that phrase before, that’s because someone used to it describe his intensions in taking a stake in cable company Charter Communications back in 2013.
That person was Liberty Media Chair John Malone.
WATCH: Liberty Media Chairman John Malone on equity markets and streaming services

WATCH LIVEWATCH IN THE APP More

Bed Bath & Beyond has not taken a sale of Buybuy Baby off the table.
“The business is a very attractive business, and we’re not alone in appreciating its value,” interim CEO Sue Gove said on a call with analysts when asked if a sale was off the table.
Over the past two years, the retailer has sold Christmas Tree Shops, Cost Plus World Market, PersonalizationMall.com and One Kings Lane.

A view of the atmosphere during the Whitney Port & Bundle Organics #MomAsYouAre buybuyBABY product launch in Torrance, California.
Randy Shropshire | Getty Images

As Bed Bath & Beyond shakes up its leadership suite and ousts its CEO, the retailer said Wednesday it remains open to another big change: A potential sale of its baby gear chain, Buybuy Baby.
“The business is a very attractive business, and we’re not alone in appreciating its value,” interim CEO Sue Gove said on a call with analysts when asked if a sale was off the table. “We know there is interest.”

For now, she said, the parent company is focused on strategies to drive sales. That includes improving the division’s website and app and attracting more shoppers to its baby registry.
The baby gear chain is part of a new loyalty program, Welcome Rewards, too. That program began rolling out earlier this month. It allows shoppers to earn and redeem points when shopping online or in stores at any of the company’s three banners: Bed Bath & Beyond, Buybuy Baby and personal care brand Harmon Face Values.
Buybuy Baby has been a focal point in a contentious battle between the home goods retailer and activist investor Ryan Cohen. In March, Cohen pointed to the baby gear banner as one of the most valuable pieces of the company, arguing it could be worth several billion dollars, and pushed for a spinoff or selloff. He later came to a truce with the company, after it agreed to add new board members and conduct a strategic review of Buybuy Baby’s future options.
Bed Bath’s stock jumped in April on a report by The Wall Street Journal that the company was fielding interest for the division. At the time, the company did not respond to requests for comment.
The baby gear retailer has been one of Bed Bath’s bright spots, particularly as customer traffic and sales have dropped at its namesake banner. In the holiday quarter, for example, same-store sales for Bed Bath & Beyond stores declined 15% — but Buybuy Baby’s same-store sales grew by low single digits.

That trend didn’t hold up in the most recent three-month period, however. Buybuy Baby’s same-store sales fell by the mid single-digits.
Harriet Edelman, who leads the board of directors as its independent chair, said Wednesday a committee of board members are working closely with strategic and financial advisors as it considers Buybuy Baby’s future.
On the call with analysts, she described Buybuy Baby as “a highly relevant banner with a strong market position and favorable demographics.”
Bed Bath & Beyond over the past two years has sold off other pieces of its business, including Christmas Tree Shops, Cost Plus World Market, PersonalizationMall.com and One Kings Lane.

WATCH LIVEWATCH IN THE APP More

LVMH’s Moet Hennessy division on Wednesday announced it has acquired California wine-maker Joseph Phelps Vineyards.
The deal delivers Moet one of the best-known California wine makers, famous for its red table wines and trophy Insignia label.
Moet Hennessy CEO Philippe Schaus told CNBC demand in Europe is “on fire” thanks in part to the return of European tourism.

A winemaker samples a glass of Joseph Phelps Insignia at the Culinary Institute of America, in St. Helena, Calif.
Eric Risberg | AP

LVMH’s Moet Hennessy division on Wednesday announced it has acquired California wine-maker Joseph Phelps Vineyards, as the French luxury goods giant continues to broaden its drinks portfolio.
The deal delivers Moet one of the best-known California wine makers, famous for its red table wines and premium Insignia label, and deepens its foothold in the U.S., its largest market. Terms of the deal were not disclosed.

Moet Hennessy Chairman and CEO Philippe Schaus told CNBC the company had been looking around the world for larger winemakers that had the same dedication to quality, craftsmanship and entrepreneurship as LVMH. Phelps, founded in 1973 by the pioneering winemaker Joseph Phelps, produces around 750,000 bottles a year and had the right mix of scale, brand, product offerings and quality to add to the Moet Hennessy portfolio, Schaus said.
“It’s an iconic name and an iconic winery,” he said. “It’s important for us that we are acquiring a family business with a legacy and heritage. It’s super important that we keep that heritage.”
Phelps has become a staple of private wine cellars and steakhouses. Insignia, a Bordeaux-style blend, typically retails for at least $250 a bottle, depending on the vintage.
The deal comes as Moet Hennessy — whose dozens of brands include Dom Perignon, Moet & Chandon, Hennessy, Cloudy Bay and Belvedere — continues to ride the surge in high-end champagnes, wine and spirits despite fears of recession and inflation.
Schaus said Moet Hennessy aims to serve “all the different moments of consumption” — from aperitifs, champagne and fine dining wines to bars, clubs and cocktails. The company’s Cloudy Bay brand covers white wines, and its Whispering Angel line offers rose, but Schaus said, “we were missing a strong red wine.”

Moet Hennessy reported revenue of 1.64 billion euros for the first quarter, up 8% over 2021. Schaus said demand in Europe is “on fire” thanks in part to the return of European tourism.
“We’re seeing huge demand in Europe,” he said, “especially in the resort towns and nightlife.”
In the U.S., Schaus said the company has seen a slight drop-off in demand in lower-priced segments. But high-end consumers — looking for premium-priced products — continue to buy for now. “The summer will be strong, people are traveling and consuming,” he said. “After the summer, we could see a different situation. It’s hard to predict inflation and prices.”
While Moet Hennessy was constrained by supply chain problems in the first quarter, Schaus said the company was able to “catch up” to many of those issues.
“We think this quarter will be very strong,” he said.
The high-end champagne shortage, however, is unlikely to end anytime soon, Schaus said.
Dom Perignon, Krug and other pricey brands are increasingly hard to find at some retailers and restaurants since supply remains limited. Dom Perignon, for instance, ages for 10 years before it’s sold to the public, making it difficult to flex supply to meet exploding demand, Schaus said.
“Every bottle I will sell over the next 10 years is already in the cellar,” he said. “And Dom Perignon uses only the highest level of grapes, so we simply have more demand than nature can provide.”
Schaus also highlighted Armand de Brignac, the champagne brand co-owned by Jay-Z whose gold bottles have become fixtures at flashy parties and clubs. The brand. he said, is quickly catching on in night clubs in Japan and the French Riviera and has “clearly exceeded our expectations.”
“With Armand de Brignac as well, there is just a limited supply,” he said.

WATCH LIVEWATCH IN THE APP More