Business

Lowe’s missed Wall Street’s revenue expectations for the first quarter, as cooler spring weather hurt demand for supplies for outdoor do-it-yourself projects.
Net sales fell to $23.66 billion from $24.42 billion last year and missed analysts’ expectations of $23.76 billion.
Lowe’s results diverged from those of its competitor, Home Depot. On Tuesday, Home Depot surged beyond Wall Street’s expectations for quarterly earnings and revenue.

A customer pushes a shopping cart towards the entrance of a Lowe’s store in Concord, California, on Tuesday, Feb. 23, 2021.
David Paul Morris | Bloomberg | Getty Images

Lowe’s on Wednesday missed Wall Street’s sales expectations for its fiscal first quarter, as cooler spring weather hurt demand for supplies for outdoor do-it-yourself projects.
The company’s shares were down more than 2% in premarket trading.

Lowe’s reiterated its full-year outlook, saying it expects total sales to range between $97 billion and $99 billion and same-store sales to range from a decline of 1% to an increase of 1%.
Here’s what the company reported for the quarter ended April 29 compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $3.51 vs. $3.22 expected
Revenue: $23.66 billion vs. $23.76 billion expected

Lowe’s results diverged from those of its competitor, Home Depot. On Tuesday, Home Depot surged beyond Wall Street’s expectations for quarterly earnings and revenue, chalking up its growth to home appreciation and a boom in projects for housing professionals.

Lowe’s, however, has a different mix to its business. It has historically gotten about 75% to 80% of its total sales from DIY customers compared with Home Depot, which gets about half of its sales from them. That makes Lowe’s more vulnerable to shifts in demand, if homeowners decide to skip a painting or landscaping project.
“Our sales this quarter were in line with our expectations, excluding our outdoor seasonal categories that were impacted by unseasonably cold temperatures in April,” CEO Marvin Ellison said in Wednesday morning’s earnings release. “Now that spring has finally arrived, we are pleased with the improved sales trends we are seeing in May.”

Lowe’s net income for the quarter increased slightly to $2.33 billion, or $3.51 per share, from $2.32 billion or $3.21 per share, a year earlier. The results were above the $3.22 expected by analysts surveyed by Refinitiv.
Net sales fell to $23.66 billion from $24.42 billion last year and missed analysts’ expectations of $23.76 billion.
Same-store sales declined 4% year over year, a larger decrease than the 2.5% drop that analysts expected, according to StreetAccount.
As of Tuesday’s close, shares of Lowe’s are down about 25% so far this year. The stock closed Tuesday at $194.03, bringing the company’s market value to $128.27 billion.
Correction: Lowe’s net sales missed analysts’ expectations. An earlier version misstated that fact.

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Target shares dropped sharply on Wednesday, after the company said its quarterly profits got hit by supply chain troubles, higher fuel costs and lower than expected sales of discretionary merchandise.
The big-box retailer said it saw a healthy customer, but a shift to experience-based purchases, such as toys for birthday parties and luggage for trips.
Target reiterated its revenue forecast, which calls for mid single-digit growth this year and beyond.

Target on Wednesday reported quarterly earnings that fell far short of Wall Street’s expectations, as the retailer coped with pricey freight costs, higher markdowns and lower-than-expected sales of discretionary items from TVs to bicycles.
Shares fell about 24% in premarket trading.

Here’s what Target reported for the fiscal first quarter ended April 30, compared with Refinitiv consensus estimates:

Earnings per share: $2.19 adjusted vs. $3.07 expected
Revenue: $25.17 billion vs. $24.49 billion expected

The national retailer, known for its cheap chic brands of apparel, home decor and more, lapped an especially elevated sales period. A year ago, shoppers had extra dollars in their pockets from stimulus checks and reflected a sense of optimism with their purchases as they got their first Covid-19 vaccines. 
Sales did grow compared with that year-ago period. Comparable sales, a key metric that tracks sales at stores open at least 13 months and online, grew 3.3% in the first quarter. That is on top of a 23% increase in comparable sales in the year-ago quarter and it is higher than Wall Street’s projections for 0.8%, according to StreetAccount estimates. At Target’s stores and its website, traffic rose 3.9%.

Even so, CEO Brian Cornell said the company missed the mark as its gains were “accompanied by unusually high costs.”
“While we saw healthy top line growth in the quarter, we were less profitable than we expected to be or intend to be over time,” he said on a call with reporters.

Among the challenges, Target said profits got hit by inventory that arrived too early and too late, compensation and headcount that rose at distribution centers, and a mix of merchandise sales that looked different than before.
Target’s results mirrored Walmart’s quarterly earnings performance. Walmart reported Tuesday that it also missed on earnings, also citing higher inventory and numerous cost pressures. Walmart’s shares fell more than 11% on Tuesday and touched a 52-week low.
Target reiterated its revenue forecast, which calls for mid single-digit growth this year and beyond. It did not provide an earnings per share estimate.
Target’s net income in the quarter fell to $1.01 billion, or $2.16 per share, from $2.1 billion, or $4.17 per share, a year earlier. Excluding items, the retailer earned $2.19 per share, 88 cents short of the $3.07 expected by analysts surveyed by Refinitiv.
Those adjusted earnings per share dropped sharply – down nearly 41% from the year-ago period.
Total revenue rose to $25.17 billion from $24.20 billion a year ago, above analysts’ expectations of $24.49 billion.

Target vs. Walmart

While Target and Walmart both missed profit expectations by wide margins, they diverged in descriptions of the American consumer. 
Walmart Chief Financial Officer Brett Biggs told CNBC that the big-box retailer has seen some budget-strapped customers trade down to the store brand for deli meats and buy a half-gallon of milk rather than a full one. Some others, he said, are seeking out new gaming consoles and patio sets. 
Target CEO Brian Cornell, meanwhile, said on a media call that the company is seeing a healthy consumer, but one who is living – and spending – differently while resuming some pre-pandemic habits.
For instance, Cornell said toy sales were a standout in the first quarter and grew by the high single digits as families resumed bigger children’s birthday parties. Luggage sales were up more than 50%, he said.  
On the other hand, sales of items like TVs, kitchen appliances and bicycles dropped off as consumers shifted their spending towards experience-based purchases like booking trips and buying gift cards for restaurants, he said.
Cornell, however, warned that cost pressures “will persist in the near term,” stressing that some are beyond the company’s control. One of those factors is the price of gas, which hit a national average of $4.523 per gallon on Tuesday, according to AAA.
Still, he said, it will continue to invest in the business, open new stores and said Target’s bright, long-term trajectory remains the same.
With inflation at a nearly four-decade high, Chief Financial Officer Michael Fiddelke said on a call with reporters that Target will focus on offering value, even if that means absorbing some costs. He said raising prices “continues to be the last lever we pull.”
“We’ve earned so much trust over the last several years with investments we’ve made in price and we aren’t about to trade that out in the current environment,” he said. 
As of Tuesday’s close, Target’s shares are down about 7% so far this year. Shares closed at $215.28 on Tuesday, bringing the company’s market value to $99.82 billion.

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FA Playbook

Although no one can predict what is going to happen next, there are strategies that investors can consider to help manage their portfolios through volatility.
The starting point for every investor should be to take the emotion out of investing. The key, of course, is to avoid making irrational investing decisions.
The best thing to do is to stay focused on your portfolio strategy and look for long-term opportunities in the market.

NicolasMcComber | E+ | Getty Images

Whether you’re new to investing or have been in the market for years, you may feel a little bit like you are lost at sea looking for a safe harbor.
Investors are contending with a confluence of market forces such as inflation, interest rates increasing, and the Russia/Ukraine conflict.  This is a troublesome combination of macroeconomic factors that has combined with a world still dealing with the effects of the pandemic.

The changes in the market have prompted many investors to look for portfolio strategies on how to navigate this market.  Although no one can perfectly predict what is going to happen next, there are strategies that investors can consider implementing to help manage their portfolios through this volatility.
The starting point for every investor should be to take the emotion out of investing. The key, of course, is to avoid making irrational investing decisions.

More from FA Playbook:

Here’s a look at other stories impacting the financial advisor business.

Market volatility, especially when it’s resulting in asset prices declining, can make investors very emotional. The recent discussions on the possibility of a recession bring haunting feelings of 2008 (the great Financial Crisis) and 2020 (the start of the Covid-19 pandemic) to mind for many investors.
Fear often breeds poor investment decisions, so investors should try to pause and take a more analytical approach in assessing their investment decisions.  There is nothing wrong with changing an investment strategy or allocation as long as it is based on facts and not emotions.
As a part of taking a more analytical approach to the portfolio, investors should assess their current cash positions. Ideally, an investor should have enough liquid assets outside of the market to meet the next 12 months of living expenses.  The security of knowing that all current living expenses are met can help investors not be as emotionally and mentally affected by market fluctuations.

Investors should also focus on a long-term strategy and should not lose their appetite for stocks.

It is not uncommon for investors to give up on investing in stocks after a difficult time in the market. However, investors should not let the current volatility permanently close the door on stocks as an investment allocation.
Instead, investors should remind themselves that despite the poor start to 2022, stocks still remain the best source of long-term asset appreciation. The current market offers an opportunity to make investments today that will provide income and appreciation well into the future.    
An investment portfolio should also be thoroughly reviewed given the changes in the market environment. That’s means doing some rebalancing.
The market has taken a more defensive posture; quality companies with strong balance sheets and pricing power are outperforming now, and potentially, into the future.  With interest rates increasing, fixed income and cash investments will have poor long-term real returns.

Investing a portfolio in companies that pay dividends is an excellent way to provide cash flow to help buffer market volatility. Dividends are also found more often in strong, long-lived companies that can act as relative safe ports in a stormy market. Investors should also rethink which sectors may be beneficiaries of the current environment.
For instance, a case may be made that financials will benefit from the increase in interest rates or that health-care stocks will be immune from inflation and interest rate fears as demand for their products remain steady.
Finally, investors should not forget that there is value in harvesting tax losses from weak companies.  These losses can be used to offset gains in other investments and provide necessary cash for opportunistic portfolio reallocations. 
To be sure, the past few months have been challenging for every investor.
The best thing to do is to stay focused on your portfolio strategy and look for long-term opportunities in the market. Refocusing and reviewing the portfolio is an important part of a successful investment process. More

Justin Ellen found himself at a difficult crossroad when he was 17 — should he pursue his passion for baking full-time, or go to college to further his education?
At that time, the youngest contestant of Netflix’s popular baking show was making custom cakes from home as a side-hustle, while also juggling with school.

He was bringing home at least $5,000 a month, but he couldn’t help but compare himself to his peers.
“The thing that got me down was like, I was seeing all my friends [apply for colleges].”
Nonetheless, the young celebrity baker stuck to his guns, believing that “everyone has their own path.”

Just two years later, the full-time entrepreneur and owner of cake business, Everything Just Baked, is earning more than $100,000 a year — and he’s not turning back.
In March this year, he made his debut on Netflix’s “Is It Cake?” — a baking contest where cake artists create edible replicas of everyday objects, such as bowling pins and sewing machines.

The show, which premiered on the streaming service on March 18, was in the Top 10 most-watched list in the U.S. for four weeks. It also raked in more than 100 million hours of views from around the world.
But the path of success is not without failures, Ellen tells CNBC Make It. Sheer hard work and wise words from loved ones also helped prod him along.

‘Who made this cake?’

As a digital native, Ellen knew from the start that having a social media presence would be crucial in building his business. But it took a lot of practice — and courage — to make himself known. 
“In the beginning, my social media wasn’t great … not great photos, they were very blurry. But as I kept on progressing, I realized they have to be super clean.”
Ellen also saw that Instagram was “really pushing” video content on the platform and that’s when he decided to turn the camera on himself, sharing snippets of his life as a young baker. 

“I was definitely shy in the beginning because it was just awkward for me … but the more you do it, it’s like, oh well and honestly no one cares if your hair’s a little frizzy today,” he shared.
“Honestly, it makes you more relatable. People want to know the person behind the brand and if they enjoy you, they’re gonna want to spend money with you.”

Even so, Ellen said that posting on social media was something he “didn’t take seriously” at the start.
“I was just posting for fun. Eventually, [through] word of mouth … people kept asking ‘Can I order a cake?'”
Ellen also slowly built his following and clientele by baking whenever he had the chance, even if it was for family events.
“It doesn’t even have to be a huge cake … just make something small because you don’t know who’s going to be there. Someone’s going to eat it and ask, ‘Who made this cake?'”

People are buying designer purses for thousands of dollars. You have got to make your customers understand the worth in your brand and what you’re providing them …

Justin Ellen
Owner, Everything Just Baked

Before he knew it, he had over 50,000 followers on Instagram and was earning about $5,000 to $9,000 a month in high school.
“I realized, wow, this could be a serious business.”

From baker to entrepreneur  

As he saw his side hustle gain momentum in high school, Ellen started thinking about pursuing baking as a career. But not everyone approved.
“My dad was like, a baker? I feel like there’s a connotation [with baking] like, ‘Oh, you don’t make a lot of money’ or ‘You have to do a lot of work,'” he said.
But Ellen had bigger plans for himself.
“I realized that I didn’t have to think small. There’s so much you could do in the field … think about every lane you could go into.”

“I looked at other bakers who created their business — they have product lines, which I had no idea that that’s something you can even do.”
It was around this time that Ellen, like his friends around him, had to think about what’s next after high school.
“Probably around junior year, when everyone’s like searching for colleges … I was debating [about] going to culinary school. [But] I realized it wasn’t for me,” he said.

If you want to be a baker, then go work for someone else.

Justin Ellen
Owner, Everything Just Baked

“I just felt like it wasn’t worth it and it was a lot of money. And you can’t really teach how to do art in a sense, it’s really just practice — and the more you practice, the easier it’s going to get.”
That was the pivotal moment for Ellen, who realized he was not just a baker in high school anymore.
“[I’m an] entrepreneur first, then a baker. If you want to be a baker, then go work for someone else.”

Best business advice

Social media may have been “completely free” to use as a form of marketing, but Ellen needed help with the initial capital to get his business up and running.
“In the beginning I was selling cookies that I shipped out … I asked my parents for $500 to buy boxes and other materials.”
That was the first and last time he ever asked his parents for money for his business, he said.

Running a business is expensive. You don’t want to waste money just because you think you have a good idea.

Justin Ellen
Owner, Everything Just Baked

Even though his parents had doubts about his business in the early days, Ellen attributes his success to their wise words: Always reinvest what you earn.
“I was able to reinvest the money that [I got from] people purchasing, back into my business. I didn’t go buy Jordans,” he said with a laugh, referring to Nike’s popular Air Jordan sneakers that can cost at least $200.
That mindset is something that his parents — who run their own real estate company — instilled in him, Ellen said. More

Shares of Southeast Asia’s e-commerce and gaming firm Sea Group popped after its first-quarter revenue beat analysts’ expectations on Tuesday.
Sea’s U.S.-listed shares rose 14% to close at $80.21 after the of Singapore-based internet firm reported revenue that exceeded analysts’ expectations in the first quarter this year.
E-commerce and gaming revenue fell from the previous quarter, a sign business is slowing as countries emerge from the pandemic.

Shares of Southeast Asia’s e-commerce and gaming firm Sea Group popped after its first-quarter revenue beat analysts’ expectations on Tuesday.
Sea’s U.S.-listed shares rose 14% to close at $80.21 after the of Singapore-based internet firm reported revenue that exceeded analysts’ expectations in the first quarter this year.

Here’s how the New York Stock Exchange-listed company did in the January to March period:

Revenue: $2.9 billion vs. $2.76 billion as expected by analysts, according to Refinitiv.
Net Loss: $580.1 billion vs. $722 billion as expected by analysts, according to Refinitiv.

Sea’s revenue rose by 64.4% from the same period a year earlier, but fell around 9.5% from the $3.2 billion it made in revenue in the previous quarter, a sign that after two years of pandemic-driven sales, growth is starting to plateau.
It’s online shopping platform Shopee and gaming arm Garena grew more slowly as countries opened up.

Singapore, Singapore – 2021: A large Shopee logo at the entrance to the e-commerce platform’s headquarters at Science Park. (Exact photography date unknown due to incorrect camera settings)
Kokkai | Istock Unreleased | Getty Images

The company warned that inflation and supply chain disruptions could affect business, even as it continues to be loss-making.
“As we enter a new period, we recognize that the current macro trend and uncertainties could affect our region and world in the near term,” said Forrest Li, Sea’s chief executive officer and co-founder during the earnings call.

Both Shopee and Garena, Sea’s two main money-making divisions, faced lower revenues compared to the previous quarter.

E-commerce: Shopee

E-commerce revenues generated by Shopee was $1.52 billion in the first quarter, down from $1.59 billion in the previous quarter. Heavy logistics and marketing expenses led to $810 million in losses — that’s $131 million less than the previous quarter.
The company revised its full-year revenue guidance for Shopee to between $8.5 billion and $9.1 billion, citing “elevated macro uncertainties.”
Sea’s chief corporate officer Yanjun Wang pointed out that the company was not lowering its guidance, but widening it as a way of caution. Its previous guidance was between $8.9 billion to $9.1 billion.

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But the amount that people spend on each order could trend downwards, according to Kristine Lau, an analyst at research firm Third Bridge.
“Inflation’s impact on discretionary spending is one,” she said, referring to non-essential items such as entertainment and luxury goods.
“For a lot of the high-frequency items or just daily necessities that people had to buy online — either it was out of stock offline or it just made more sense to use Shopee when everything is in lockdown — I think a lot of that would be reallocated to offline retail,” Lau added.

Gaming: Garena

Garena, which has long been Sea’s profit maker, posted sales of $1.1 billion. Net profit for the gaming arm was up 52.2% (or $432 million) from the same period a year ago, but down 23.5% (or $859 million) from the previous quarter
Quarterly active users were down 32.9 million year-on-year, while quarterly paying users dropped by more than 18 million to 61.4 million from 79.8 million a year ago, matching worries that there is now weaker demand for mobile games in a post-pandemic world.
Much of the loss could be attributed to a ban in India too. Earlier this year, India blocked Garena’s hit mobile game Free Fire, along with 53 other apps with links to China.
Chinese tech giant Tencent is a major shareholder of Sea. In January, Tencent sold $3 billion worth of Sea shares, reducing its stake from 21.3% to 18.7%.

Tech sell-down

Shares of Sea have been hammered by the broader tech selloff. Its stock has fallen by more than 80% since its October 2021 high when it hit $366.99. Prices fell to a two-year low of around $57 earlier this month.

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Investors are also concerned over its cash-burning model Sea has spent hundreds of millions, even billions of dollars every quarter on marketing, particularly on subsidies to attract consumers and merchants onto Shopee, which competes with the likes of Amazon, Alibaba’s Lazada in Southeast Asia, and Mercado Libre in Latin America.
Shopee has a presence across 13 countries and is in Southeast Asia, Latin America, and Europe. It pulled its Shopee business out of India and France in March this year, just months after venturing into the two countries.

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In 2014, Toyota launched the Mirai, a hydrogen fuel cell sedan.
Alongside the Mirai, Toyota has had a hand in the development of larger hydrogen fuel cell vehicles.
While the Japanese firm looks to push ahead with plans for vehicles that use hydrogen, other influential voices in the automotive sector are not so sure.

One of Toyota’s Sora busess photographed in Japan on Nov. 5, 2021. Toyota started working on the development of fuel-cell vehicles back in 1992.
Korekore | Istock Editorial | Getty Images

Toyota Motor Europe, CaetanoBus and Air Liquide have signed an agreement related to the development of hydrogen-based transport options, as the race to develop low and zero-emission vehicles heats up.
In a statement Tuesday, Toyota said the deal would aim for what it called “closer cooperation in developing opportunities for hydrogen mobility projects in several European countries.” CaetanoBus is based in Portugal and part of Toyota Caetano Portugal and Mitsui & Co.

The firms are set to focus on a number of areas related to hydrogen, including infrastructure connected to distribution and refueling; low-carbon and renewable hydrogen production; and deploying hydrogen in a range of vehicle types.
Toyota said the initial focus would be on “buses, light commercial vehicles and cars, with a further aim to accelerate the heavy-duty truck segment.”

Read more about electric vehicles from CNBC Pro

Toyota started working on the development of fuel-cell vehicles — where hydrogen from a tank mixes with oxygen, producing electricity — back in 1992. In 2014, it launched the Mirai, a hydrogen fuel cell sedan. The business says its fuel cell vehicles emit “nothing but water from the tailpipe.”
Alongside the Mirai, Toyota has had a hand in the development of larger hydrogen fuel cell vehicles. These include a bus called the Sora and prototypes of heavy-duty trucks. As well as fuel cells, Toyota is also looking at using hydrogen in internal combustion engines.
While the Japanese automotive giant looks to push ahead with plans for vehicles that use hydrogen — firms like Hyundai and BMW are also looking at hydrogen — other influential voices in the automotive sector are not so sure.

In June 2020, Tesla CEO Elon Musk tweeted “fuel cells = fool sells,” adding in July of that year: “hydrogen fool sells make no sense.”
In Feb. 2021, Herbert Diess, the CEO of Germany’s Volkswagen Group, also weighed in on the subject. “It’s time for politicians to accept science,” he tweeted.
“Green hydrogen is needed for steel, chemical, aero … and should not end up in cars. Far too expensive, inefficient, slow and difficult to roll out and transport. After all: no #hydrogen cars in sight.”
While Diess and Musk would appear to be wary when it comes to hydrogen’s prospects in cars, their focus on battery electric vehicles puts them in direct competition with other firms like GM and Ford.
The latter’s CEO, Jim Farley, recently said his business planned to “challenge Tesla and all comers to become the top EV maker in the world.”

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The drive to find zero and low emission alternatives to diesel and gasoline comes at a time when major economies are laying out plans to reduce the environmental footprint of road-based transportation.
In Europe, for instance, the European Commission, the EU’s executive arm, has proposed a 100% reduction in CO2 emissions from cars and vans by 2035.  
On Tuesday, Ford Europe, Volvo Cars and a number of other high-profile businesses signed a joint letter asking EU governments and the European Parliament to give the Commission’s proposal the green light.
The letter called on EU government representatives and MEPs to “put in place an EU-wide phase-out for sales of new internal combustion engine passenger cars and vans (including hybrids) no later than 2035.”
“This should be enshrined into legislation by setting the 2035 fleet-wide CO2 target at 0 gram CO2/km for vehicle manufacturers,” the letter said. More

A report from the Food and Agriculture Organization of the U.N. describes seaweed farming as being “dominated by countries in East and Southeast Asia.”
Toward the end of April, a project dubbed the U.K.’s “first dedicated seaweed industry facility” celebrated its official opening.
The U.S. is also home to an emerging sector, with the NOAA stating there are now “dozens of farms” in waters off New England, Alaska and the Pacific Northwest.

Like many coastal communities around the world, people living by the sea in the United Kingdom have harvested and consumed seaweed for centuries.
In Wales, Welsh laverbread — made from cooking a type of seaweed called laver — is a culinary delicacy so revered that it enjoys Protected Designation of Origin status.

Seaweed’s uses do not end at the dinner table, either: Today, it’s found in everything from cosmetics and animal feed to gardening products and packaging.
With concerns about the environment, food security and climate change mounting, this wet, edible treasure of the sea — of which there are many varieties and colors — could have a major role to play in the sustainable future of our planet, and the U.K. wants in on the act.  
Toward the end of April, a project dubbed the U.K.’s “first dedicated seaweed industry facility” celebrated its official opening, with those involved hoping it will help kickstart the commercialization of a sector that’s well established in other parts of the world.
The Seaweed Academy, as it’s known, is located near the Scottish town of Oban. Funding of £407,000 (around $495,300) for the project has been provided by the U.K. government.
It will be run by the Scottish Association for Marine Science in partnership with its trading subsidiary SAMS Enterprise and educational institution UHI Argyll.

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According to a statement from SAMS, one of the academy’s goals centers around stimulating “the growth of UK seaweed aquaculture.” On top of this, the project will look to explore “high-value markets” and use research to boost the worldwide competitiveness of U.K. products.
Rhianna Rees is a seaweed researcher and Seaweed Academy coordinator at SAMS Enterprise. In a recent interview with CNBC, she provided an insight into the type of jobs that went on at a seaweed farm.
“It’s a lot less industrial than it might come across,” she said. “When you think of farming you think of big machinery, you think of mechanical harvesting, and that’s not at all what seaweed farming is about.”
“When you look at it from the outside, all you can see are buoys in the water and then under the water are these long lines of rope with … huge swathes of seaweed,” she went on to explain.
“When you want to harvest it, you go in and you get the rope and you pull it into the boat — and that’s basically it,” she said.
The apparent simplicity of the process is one thing, but setting up a farm in the first place can be a different story altogether.
“Getting licenses from … the different organizations within England and Scotland — it can be incredibly expensive and time consuming,” Rees said. “So there are major challenges to entering the industry in the first place.”
There were also other factors to consider. “You get storm events, you get maybe years where it doesn’t grow particularly well, fluctuations in nutrients,” she said.
There was innovation on the horizon, Rees went on to note, but it would “take a few years to get to the area where we see the kind of optimization that we need for real scalability.”
Cross country
The U.K.’s interest in cultivating and harvesting seaweed is not restricted to the work being planned in and around Oban.
In the picturesque county of Cornwall on the southwest tip of England, the Cornish Seaweed Company has been harvesting since 2012, providing a glimpse of how the wider industry could develop in the years ahead.
Tim van Berkel, who co-founded the company and is its managing director, told CNBC the firm wild-harvested seaweed from the shores for food purposes.
In 2017, the business supplemented this shore-based harvesting when it started to farm seaweed from spores at the site of an existing mussel farm in waters off Porthallow, a Cornish fishing village. 
“They grow on lines suspended in the water, like buoys really,” van Berkel said, adding that it was “similar to mussel farming.” The business was farming two types of seaweed at the site, van Berkel said: sugar kelp and alaria.

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Despite establishing the site at Porthallow, for now the company’s core focus relates to its shore-based harvesting. “That’s really still the main business,” van Berkel said. “There’s five, six, other seaweeds that we harvest … from the wild, from the shores, which is going on year round.”
Other companies looking to make their mark include SeaGrown, which is based in the coastal town of Scarborough, Yorkshire, and is working on setting up a seaweed farm in the North Sea.
Further north, Seaweed Farming Scotland’s operations are located in Oban and focused on the cultivation of species native to the waters there.
The global picture

An aerial view of people working at a seaweed farm in Zhejiang province, China, on November 24, 2021.
Jiang Youqing | Visual China Group | Getty Images

In 2020, a report from the Food and Agriculture Organization of the U.N. described seaweed farming as being “dominated by countries in East and Southeast Asia.”
The industry is big business, with the FAO separately noting that the seaweed sector generated $14.7 billion in “first-sale value” in 2019.
With the U.K.’s commercial seaweed sector still in its early stages, it has a way to go before it competes on the global stage.
Seaweed farming in Asia can often be large-scale, with sites spread across quite considerable areas, as shown in the above photo of a farm in the province of Zhejiang, China.
The U.S. is also home to a seaweed farming sector, with the National Oceanic and Atmospheric Administration stating there are now “dozens of farms” in waters off New England, Alaska and the Pacific Northwest.
Alongside the commercial products resulting from seaweed farming, there are other benefits too, an obvious one being that it does not require fresh water.
For its part, the NOAA says that “seaweeds are incredibly efficient at sucking up carbon dioxide and using it to grow.” In addition, it notes that “seaweeds also gobble up nitrogen and phosphorus.”
While there are concerns related to permitting in some parts of the U.S., the industry there has expanded in recent years, with the NOAA calling it the “fastest-growing aquaculture sector.”
It adds that 2019 saw Alaska-based farmers produce over 112,000 pounds of sugar, ribbon, and bull kelp. “That’s a 200 percent increase over the state’s first commercial harvest in 2017,” it says.
Worldwide, the industry seems to have been on a rapid course of expansion over the past two decades or so. The FAO’s report said global marine macroalgae — another name for seaweed — production had risen from 10.6 million metric tons in 2000 to 32.4 million metric tons in 2018.
It’s not all been plain sailing, however. “Global production of farmed aquatic algae, dominated by seaweeds, experienced relatively low growth in the most recent years, and even fell by 0.7 percent in 2018,” the FAO’s report noted.

An aerial view of a site used for seaweed farming in waters off Bali, Indonesia.
Sasithorn Phuapankasemsuk | Istock | Getty Images

And while there would appear to be a multitude of products and benefits linked to seaweed farming, there are also issues those working in the industry will need to address and carefully manage going forward. 
The World Wildlife Fund, for example, notes that, in some instances, species of seaweed have become “invasive when grown outside their natural range.”
The WWF also cites the “entanglement of protected species with seaweed farm rope structures” as a “potential concern” but adds that such an occurrence is unlikely and “no credible documented marine entanglements” have taken in place in 40 years.
Back in Scotland, the Seaweed Academy’s Rees is optimistic for what the future holds. “I think we’re really poised to see the growth,” she said. “I just hope that the hype isn’t hype for the wrong reasons.”
“And as long as we’re all … working together to get the message and to get the training and to get development right, along with support from governments and investors, then we’ll see something that’s really beneficial for the world, really sustainable.” More

Air travel in United States, Europe and Latin America are seeing strong growth rates, hitting 60% of where they used to be in 2019, said the International Air Transport Association.
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International air travel is making strong recovery this year, with the exception of the Asia-Pacific region, which is “lagging significantly behind,” according to the International Air Transport Association.
“Last year, international travel was at about 25% of where it was in 2019. First quarter of this year across the globe, it’s up 42%,” Willie Walsh, the director general of the industry body, told “Squawk Box Asia” on Tuesday.
Air travel in Asia is “only about 13% of where it was in 2019,” Walsh added.

International air travel has been making a strong recovery this year, with the exception of the Asia-Pacific region, which is “lagging significantly behind,” according to the International Air Transport Association (IATA).
“Last year, international travel was at about 25% of where it was in 2019. First quarter of this year across the globe, it’s up 42%,” Willie Walsh, the director general of the industry body, told “Squawk Box Asia” on Tuesday.

“In fact, what we’re seeing is very strong growth rate in some markets, from the U.S., Europe, Latin America, all touching around 60%.”
For example, United Airlines’ shares added more than 3% in extended trading on Monday, after the company issued an update on its second-quarter outlook.
In contrast, air travel in Asia is “only about 13% of where it was in 2019,” Walsh added.
China is still pursuing its zero-Covid policy, with Shanghai and Beijing tightening restrictions on business and travel. But China’s travel restrictions will not play a big role in global air travel recovery, he said.

“The positive is that there are lots of other markets opening up so airlines have an opportunity to expand their network … to those markets,” he added.

‘Premium’ travel uptick

When asked if the business segment of the airline industry will be returning to pre-pandemic levels, Walsh said that recovery will be “a bit slower.”
“We get a lot of business people traveling in economy … business recovery is lagging slightly,” he added.
“But I think everybody would now accept that it’s not going to have a fundamental structural shift that we all believed might happen.”
In contrast, he observed that there are more “premium” travelers who are travelling in first class or business class.
“That points to what has been a very important segment of the market, which we call premium leisure … what we’re seeing there is people have more disposable income and are prepared to pay for that premium and experience.”
“I fully expect premiums [to] continue to recover quickly,” Walsh added.

To meet that demand, airlines are offering luxury cabins in the hope of getting high-paying customers to shell out for more space on board.
For example, Singapore Airlines observed that business-class seats on planes have been selling out before economy seats, which is a “reversal of a pre-pandemic trend.”

Challenges for air cargo

Even as recovery for air travel gains momentum, the IATA sees “some challenges” for the global air cargo market.
“We had record performance in 2021 and continues to improve in 2022 … but it’s just dipped a little bit behind those highs of 2021.”
Walsh attributed it mostly to Russia’s attack on Ukraine. “A lot of cargo was carried by Russian cargo operators, security has been totally destroyed,” he added.
IATA said in a report that air cargo volume dropped 5.2% year on year in March.
“The war in Ukraine led to a fall in the capacity used to serve Europe, as several airlines based in Ukraine and Russia were crucial carriers in the region,” it wrote.
“The ongoing spread of Omicron in Asia, and China in particular, is causing new lockdowns and labor shortages. These have strongly impacted manufacturing centers in China and Asia that in turn have hurt air cargo transport in markets linked the region.”

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