DURING a recent summit in Paris, J.D. Vance, America’s vice-president, declared that the world’s most powerful artificial-intelligence (AI) systems would be developed in America with “American-designed and manufactured chips”. That is a lofty ambition, for although America leads the world when it comes to designing AI chips, it long ago ceded its position as the global centre of chip manufacturing to Taiwan. More
Eli Lilly said it will invest at least $27 billion to build four new manufacturing sites in the U.S. as demand for its weight loss and diabetes injections soars and the company develops new drugs.
The move comes as companies work to build goodwill with President Donald Trump, who has emphasized reshoring manufacturing to the U.S. and reducing reliance on foreign supply chains.
The announcement brings Eli Lilly’s total U.S. manufacturing investments to more than $50 billion in recent years.
Eli Lilly on Wednesday said it will invest at least $27 billion to build four new manufacturing sites in the U.S., as demand for its blockbuster weight loss and diabetes injections soars and the company develops new drugs for other conditions.
It comes as drugmakers and companies across different industries work to build goodwill with President Donald Trump, who has emphasized reshoring manufacturing to the U.S. and reducing reliance on foreign supply chains. He has threatened companies — and pharmaceutical businesses in particular — with tariffs if they do not manufacture products in the U.S.
Eli Lilly made the announcement at an event in Washington, D.C. — emphasizing the political undertones of the strategy. The event featured several speakers from the Trump administration, including Kevin Hassett, director of the White House National Economic Council, and Commerce Secretary Howard Lutnick, who explicitly tied the announcement to Trump’s policies.
Lutnick said the investment is “exactly what the Trump administration is all about, which is building and manufacturing and reshoring in America, investing in America, building in America.” He thanked Eli Lilly for “doing exactly what the president was hoping would happen.”
Lutnick added that “if you want to understand the tariff policy” of the U.S., “I have just articulated it.”
The move brings Eli Lilly’s total U.S. manufacturing investments to more than $50 billion in recent years. The other $23 billion is from the company’s investments in new plants and site expansions since 2020, which has helped ease supply shortages of its popular drugs.
“This represents the largest pharmaceutical expansion investment in U.S. history,” Eli Lilly CEO David Ricks said at the event. “We’re making these investments … to prepare for the demand we anticipate for future pipeline medicines across our therapeutic areas.”
Shares of the company closed more than 1% higher on Wednesday.
Three of the future U.S. sites announced Wednesday will manufacture active ingredients in medications, such as tirzepatide, the active ingredient in Eli Lilly’s obesity drug Zepbound and diabetes treatment Mounjaro. Ricks noted that there is a “real gap in supply chain in the U.S. as it relates to active ingredient availability in our country.”
The fourth site will extend the company’s global manufacturing network for future injectable therapies, he added.
Eli Lilly has not decided on where the four new U.S. sites will be located, Ricks said. The company will be accepting location submissions through March 13 and will announce decisions on new sites in the coming months.
Eli Lilly said the four new sites will create more than 3,000 jobs for workers such as engineers and scientists, along with 10,000 construction jobs as the plants are built. The company’s other U.S. plants include sites in North Carolina, Indiana and Wisconsin.
The new investments aren’t solely dedicated to Eli Lilly’s current and future obesity and diabetes treatments. The company is charting its future beyond Zepbound and Mounjaro, with hopes to deliver drugs from its broad pipeline of products for cancer, Alzheimer’s disease and other conditions.
Ricks said the company is optimistic about its pipeline across therapeutic areas, including cardiometabolic health, oncology, immunology and neuroscience.
Still, the new investments build on the success of Zepbound and Mounjaro, which share dominance of the booming market for so-called GLP-1 drugs with Novo Nordisk’s weight loss drug Wegovy and diabetes treatment Ozempic. Some analysts expect the global obesity drug market to be worth more than $150 billion annually by the early 2030s, making it critical for both companies to maintain their share as other drugmakers scramble to join.
During the event, Ricks took a shot at cheaper compounded versions of its injectable drugs, saying “America faces a growing threat from an influx of counterfeit and compounded medications.”
Eli Lilly’s efforts to boost the supply of Zepbound and Mounjaro aim to ensure that eligible patients are safely accessing those branded treatments instead of cheaper compounded versions. Patients flocked to those unapproved copycats when the branded drugs were in short supply, or if they didn’t have insurance coverage for the costly treatments.
The FDA has since declared the shortage of tirzepatide over, which will essentially bar many compounding pharmacies from making copycats.
Hassett said the issue also “disturbs the White House” because offshore producers of copycat drugs are “threatening lives in the U.S.”
More CNBC health coverage
In another sign of the political goals of the announcement, Ricks touted Trump’s 2017 Tax Cuts and Jobs Act, saying that the legislation has been “fundamental” to the company’s manufacturing investments. He called it “essential that these policies are extended permanently this year.”
Key provisions from that law are set to expire at the end of December — though a reduction in the corporate tax rate will remain in effect.
That legislation, passed by a majority-Republican Congress during Trump’s first term, was the largest tax code overhaul in nearly three decades that slashed taxes for individuals and businesses. It cut the corporate tax rate to 21%, capped deductions for state and local taxes at $10,000, and expanded the child tax credit, among other efforts.
“Long-term progress will also require U.S. policies to continue to protect the intellectual property rights and foster an innovative environment where we can do our work,” Ricks said.
Novo Nordisk has similarly invested billions in manufacturing to ramp up supply of Wegovy and Ozempic, announcing in 2024 it would take over three sites from contract manufacturer Catalent for $11 billion.
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Shares of electric vehicle maker Lucid Group were down more than 10% Wednesday following a downgrade of the company’s stock by Bank of America and the abrupt departure of CEO Peter Rawlinson.
The company is in search of a new CEO, stirring uncertainty among Wall Street analysts.
Interim CEO Marc Winterhoff said the company’s top priorities include more than doubling vehicle production this year, narrowing losses and increasing customer awareness.
Lucid Motors CEO Peter Rawlinson poses at the Nasdaq MarketSite as Lucid Motors (Nasdaq: LCID) begins trading on the Nasdaq stock exchange after completing its business combination with Churchill Capital Corp IV in New York City, New York, July 26, 2021.
Andrew Kelly | Reuters
Shares of electric vehicle maker Lucid Group were down more than 10% Wednesday following a downgrade of the company’s stock by Bank of America and the abrupt departure of CEO Peter Rawlinson.
Rawlinson, who also served as chief technology officer at the company, was a driving force in its operations to this point, including the decision to go public in 2021. Investors considered Rawlinson to be the face of the company — and crucial to its success.
The company – majority owned by Saudi Arabia’s Public Investment Fund – is in search of a new CEO, stirring uncertainty among Wall Street analysts.
“We think the departure of Lucid’s (LCID) founder, CEO, and CTO, Peter Rawlinson is much more consequential than understood by the market,” BofA Securities analyst John Murphy wrote in a Wednesday investor note downgrading the stock to underperform. “We now expect product development to stall, consumer demand to be dampened, and anticipate additional funding opportunities could be put at risk.”
Interim CEO Marc Winterhoff, formerly the company’s chief operating officer, will attempt to ensure that’s not the case for Lucid.
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Shares of Lucid, Tesla and Rivian in 2025.
Winterhoff said in an interview with CNBC his objective is to build upon Lucid’s success rather than change its course. His top priorities include more than doubling vehicle production this year, narrowing losses and increasing customer awareness and technology offerings.
“We have a clear vision. Now my focus will be on execution,” Winterhoff told CNBC Tuesday ahead of speaking to investors on the company’s fourth-quarter earnings call.
Gross profit
Lucid remains far from profitable, but it has been narrowing its gross losses by increasing scale and making its products more efficient.
Its GAAP gross margin, which includes production and sales but does not factor in other expenses, for was a negative 114% in 2024, improvement from a negative 225% in 2023.
“We expect a significant improvement in gross margin in line with what we see in 2024 compared to 2023. So, we are on the right trajectory,” Gagan Dhingra, Lucid’s interim CFO, told investors Tuesday.
For the fourth quarter, the company reported a net loss attributable to common stockholders of $636.9 million, or a loss of 22 cents per share, on revenue of $234.5 million.
New products
Lucid’s first product was the Air sedan, which it began delivering in late 2021. The pricey car has been praised for its styling and technologies, but demand for the vehicle hasn’t been as strong as anticipated.
Winterhoff said the company will continue to produce Air sedans as it begins to ramp up production of its second product, an SUV called Gravity.
Lucid Gravity Grand Touring SUV
Winterhoff said production of the Gravity SUV will gradually build this year. He declined to speculate Tuesday on what percentage of the 20,000-unit production target the vehicle would represent. He noted Gravity ordering for customers in Saudi Arabia began earlier this month.
“We’re expanding our footprint and markets we are very active in, and then absolutely increasing the ramp of Gravity, which is a big, big focus for us right now,” he said during the company’s investor call.
Lucid also is in the midst of developing a new midsize vehicle platform that’s expected to launch at the end of 2026, which both Winterhoff and Rawlinson have described as critical to the automaker’s growth.
‘Double down’ on marketing
As the automaker increases production and the number of vehicles it offers, Winterhoff said Lucid will “double down” on marketing and advertising to increase customer awareness.
“I’m not planning to create a new vision or something like that for the company,” he told CNBC. “What I’m still focusing on is simply operational topics, like, for instance, increasing the deliveries for our customers. We will double down on marketing. You will see much more marketing from us.”
A Lucid showroom in New York City on Aug 19th, 2023.
Adam Jeffery | CNBC
The company’s selling, general and administrative expenses were $900 million in 2024, including a $19.9 million increase in sales and marketing expenses over the prior year. The company’s total marketing and advertising expense wasn’t immediately available.
New tech, partnerships
The Lucid Air has been criticized for its lack of advanced driver-assistant systems such as Tesla’s “FSD” or General Motors’ “Super Cruise.” Certain Air models cost tens of thousands of dollars more than vehicles from competitors with such technologies.
However, Lucid expects to release a new hands-free driving system for customers later this year.
What Lucid lacks in driver-assistant technologies, it arguably makes up for in battery efficiency, as its cars are among the most efficient EVs in the U.S., according to federal data.
Lucid has attempted to capitalize on its battery technologies by offering to sell them to other companies as a way to increase scale and revenue.
Winterhoff said the company remains in “constant discussions” with companies about using Lucid’s battery technology but declined to provide additional details. More
Amazon founder Jeff Bezos said that the Washington Post’s opinion pages would now be dedicated to supporting “personal liberties and free markets,” in a move that will likely spark fresh accusations that he’s trying to curry favor with President Donald Trump.
Viewpoints opposing those two “pillars” will be “left to be published by others,” Bezos told staffers at the paper he owns, drawing praise from some Trump advisors like Elon Musk.
Bezos also said that editorial page editor David Shipley, who had held the job for over two years, decided to resign.
(L-R) Lauren Sanchez, Amazon founder Jeff Bezos, Google CEO Sundar Pichai and Tesla and SpaceX CEO Elon Musk attend the inauguration ceremony before Donald Trump is sworn in as the 47th US President in the US Capitol Rotunda in Washington, DC, on January 20, 2025.
Saul Loeb | Afp | Getty Images
Jeff Bezos, the Amazon founder and owner of the Washington Post, said Wednesday that his newspaper’s opinion pages would now be dedicated to supporting “personal liberties and free markets,” and that the organization would not publish opposing views.
“We’ll cover other topics too of course,” Bezos said in an email to Post staffers that he posted on X. “But viewpoints opposing those pillars will be left to be published by others.”
While the move garnered praise from some in President Donald Trump’s administration, such as Elon Musk, it was panned by some current and former Post staffers, including former editor Marty Baron, who said he was “disgusted.”
Bezos said that editorial page editor David Shipley, who had held the job for over two years, decided to resign rather than lead the opinion section under the new policy.
“I suggested to him that if the answer wasn’t ‘hell yes,’ then it had to be ‘no,'” Bezos said of Shipley, adding, “I respect his decision.”
The Post will be “searching for a new Opinion Editor to own this new direction,” Bezos said.
He asserted that while a major newspaper might once have considered it a service to offer its readers “a broad-based opinion section that sought to cover all views,” that is no longer the case.
“Today, the internet does that job,” Bezos wrote.
“I’m confident that free markets and personal liberties are right for America,” he added. “I also believe these viewpoints are underserved in the current market of ideas and news opinion. I’m excited for us together to fill that void.”
Representatives for Bezos and the Post, as well as Shipley, did not immediately return CNBC’s requests for additional comment.
By erecting new parameters around what opinions the Post can print, Bezos will likely draw fresh accusations that he is seeking to curry favor with Trump, who has long attacked the paper as “Fake News.”
Less than two weeks before the 2024 presidential election between the Republican Trump and Democratic nominee Kamala Harris, the Post announced that it would not endorse either candidate, breaking with decades of recent precedent.
The Post in a news article at the time reported that the paper’s editorial staff had planned to endorse Harris, and that Bezos himself made the decision to end the tradition.
David Shipley and the staff of The Washington Post via Getty Images react as they learn they have won three 2024 Pulitzer Prizes during a newsroom gathering in Washington, DC on Monday, May 06, 2024.
Jabin Botsford | The Washington Post | Getty Images
Four days later, the newspaper reported that at least 250,000 of its readers had canceled their subscriptions following the policy shift.
After Trump won the election, Bezos’ Amazon joined with numerous other tech giants in donating hefty sums to the then-president-elect’s inaugural fund. While Bezos stepped down as CEO of the company in 2021, he still serves as its executive chairman.
Bezos was also spotted dining with Trump at his Mar-a-Lago home and club in Florida. The tech megabillionaire later attended Trump’s inauguration on Jan. 20, standing alongside Meta boss Mark Zuckerberg, Apple CEO Tim Cook, Google leader Sundar Pichai and Musk, the Tesla and SpaceX CEO.
Musk, who leads Trump’s government-slashing task force known as DOGE, praised Bezos for implementing the editorial change.
Multiple staffers have recently quit the Post in protest. Cartoonist Ann Telnaes left the paper in early January, after accusing her bosses of killing her drawing of businessmen — including one resembling Bezos — genuflecting at an altar of Trump. When she resigned the same month, columnist Jennifer Rubin accused Bezos and other rich media moguls of enabling Trump and betraying their audiences’ loyalty.
In reacting to Bezos’ announcement Wednesday morning, some have noted that Amazon is currently involved in an antitrust lawsuit brought by the U.S. Federal Trade Commission.
Prior to Trump’s inauguration, Puck News first reported that Amazon would pay $40 million to license a documentary about first lady Melania Trump. The Wall Street Journal reported this month that Melania will pocket more than 70% of that total.
Read more CNBC politics coverage
It is not unprecedented for a newspaper’s owner to involve themselves in editorial decisions, New York University journalism professor Adam Penenberg told CNBC. He pointed to the New York Post’s conservative shift after Rupert Murdoch’s takeover in 1976, and Sheldon Adelson’s push to make the Las Vegas Review-Journal more pro-business.
But Penenberg noted that Bezos’ order for his paper’s editorial pages to comply with specific ideological views sets him apart.
The announcement spurred a range of initial responses from reporters at the Post — some of whom said the news department will not be affected.
“As I’ve stated before: Nothing changes,” wrote Dan Lamothe, who covers military affairs, on X later Wednesday morning. “We ask hard questions and hold those in power to account. That’s the job, whether those in power like it or not.”
But chief economic reporter Jeff Stein called Bezos’ decision a “massive encroachment” into the paper’s opinion section that “makes clear dissenting views will not be published or tolerated.”
“I still have not felt encroachment on my journalism on the news side of coverage, but if Bezos tries interfering with the news side I will be quitting immediately and letting you know,” Stein wrote on X.
Baron, who retired as editor of the Post in 2021 after eight years in the role, slammed Bezos in a scathing statement to the Daily Beast later Wednesday.
“What Bezos is doing today runs counter to what he said, and actually practiced, during my tenure at The Post,” Baron said. “I have always been grateful for how he stood up for The Post and an independent press against Trump’s constant threats to his business interests. Now I couldn’t be more sad and disgusted.”
Philip Bump, a current Post opinion columnist, wrote on Bluesky: “What the actual f—.” More
Lowe’s beat Wall Street’s fourth-quarter earnings and revenue expectations and forecast modest growth in the year ahead.
The company’s better-than-expected performance comes after rival Home Depot snapped an eight-quarter losing streak for comparable sales.
Higher borrowing and home costs have slowed demand for home improvement projects.
A Lowe’s store stands in Brooklyn on February 27, 2024 in New York City.
Spencer Platt | Getty Images
Lowe’s topped Wall Street’s quarterly earnings and revenue expectations on Wednesday and said its sales could see modest growth in the year ahead.
The company said it expects full-year total sales sales to range from $83.5 billion to $84.5 billion, which on the upper end would be higher than its total revenue of $83.67 billion for fiscal 2024. It said it expects comparable sales to be flat to up 1% year over year and earnings per share to range from approximately $12.15 to $12.40.
Here’s what the company reported for the fiscal fourth quarter compared with what Wall Street expected, based on a survey of analysts by LSEG:
Earnings per share: $1.93 adjusted vs. $1.84 expected
Revenue: $18.55 billion vs. $18.29 billion expected
Lowe’s shares rose about 4% in premarket trading. The company is set to hold an earnings call at 9 a.m. ET on Wednesday.
In the three-month period that ended Jan. 31, Lowe’s net income was $1.13 billion, or $1.99 per share, compared with $1.02 billion, or $1.77 per share, in the year-ago period. Revenue fell from $18.60 billion in the year-ago quarter.
Lowe’s adjusted earnings per share figure excluded a $80 million pre-tax gain associated with the 2022 sale of its Canadian retail business, which added 6 cents per share to fourth-quarter earnings.
Investors are looking for signs that the home improvement market will pick up again. Slower housing turnover and higher borrowing costs have kept some customers on the sidelines. Lowe’s net sales for the 2024 fiscal year totaled $83.67 billion, down 3% from the fiscal year prior.
Shares of Lowe’s rose more than 2% in early trading, after the company’s outlook pointed to potential for improving trends in the year ahead.
Comparable sales for the quarter rose 0.2%, boosted by online gains, high single-digit growth among home professionals and sales related to rebuilding efforts after Hurricanes Milton and Helene. That slightly positive metric ended eight consecutive quarters of comparable sales declines. It also exceeded Wall Street’s expectations. Analysts had anticipated a 1.8% decline in comparable sales.
Yet in a news release, Lowe’s said those gains were partially offset by pressure on discretionary do-it-yourself projects.
Lowe’s competitor Home Depot narrowly beat Wall Street’s fourth-quarter estimates on Tuesday and also snapped an eight consecutive quarter losing streak with comparable sales. Yet Home Depot CFO Richard McPhail said the company doesn’t expect the housing market or mortgage rates to change. Instead, he told CNBC that he thinks consumers will gradually get used to elevated rates as “a new normal.”
Shares of Lowe’s closed on Tuesday at $242.39. As of Tuesday’s close, shares of the company have fallen nearly 2% this year. That trails behind the approximately 2% gains of the S&P 500 during the same period.
This is breaking news. Please check back for updates. More
The company behind T.J. Maxx, Marshall’s and Home Goods easily beat Wall Street’s expectations for its holiday quarter but it issued guidance that came in below expectations.
TJX Companies has been growing and taking market share from department stores as consumers hunt for a deal and legacy retailers shrink their footprints.
TJX’s growth has been slowing, but it’s one of the few retailers that stands to benefit from President Donald Trump’s tariffs.
North Miami Beach, Florida, T.J. Maxx & HomeGoods discount department store, furniture display and welcome sign.
Jeff Greenberg | Getty Images
TJX Companies posted a better-than-expected holiday quarter driven entirely by customer transactions, indicating the off-price giant is still taking market share from department stores and other discounters as price-conscious consumers hunt for deals.
The discounter behind T.J. Maxx, Marshall’s and Home Goods beat Wall Street’s expectations on the top and bottom lines, but it gave cautious guidance for the current fiscal year and current quarter.
For its fiscal 2026, TJX is planning for comparable sales to rise between 2% and 3%, below Wall Street expectations of up 3.4%, according to StreetAccount. Its fiscal 2026 earnings guidance of between $4.34 and $4.43 per share is well below estimates of $4.59 per share, according to LSEG, and its forecast for its current quarter also looks weaker than expected.
TJX is expecting comparable sales to climb between 2% and 3%, behind StreetAccount estimates of 3.4%, and it’s expecting earnings per share to be between 87 and 89 cents. Analysts were looking for 99 cents per share, according to LSEG.
A strong U.S. dollar and unfavorable exchange rates are expected to weigh on earnings growth by 3% in fiscal 2026, the company said in a news release.
Here’s how TJX did in its fiscal 2025 fourth quarter compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:
Earnings per share: $1.23 vs. $1.16 expected
Revenue: $16.35 billion vs. $16.20 billion expected
The company’s reported net income for the three-month period that ended Feb. 1 was $1.40 billion, or $1.23 per share, roughly flat compared with $1.40 billion a year earlier, or $1.22 per share, a year earlier.
Sales were basically unchanged at $16.35 billion, compared to $16.41 billion a year earlier. In the year-ago period, TJX benefited from an extra selling week that it didn’t have in fiscal 2025.
The discounter behind T.J. Maxx, Marshall’s and HomeGoods has been on a torrid growth path over the last couple of years as consumers look for cheaper options amid persistent inflation, high interest rates and an uncertain economic outlook.
Shoppers who’ve long gone to department stores like Macy’s, Kohl’s and even discounter Target have looked to TJX to buy not just clothes, but also household goods and other discretionary items they want but aren’t willing to pay full-price for.
That trade-down effect has been a boon to TJX, and even as its growth begins to slow, it’s one of the few retailers that stands to benefit from President Donald Trump’s tariff policies. To avoid paying high duties for imports out of China, and potentially Mexico and Canada, some companies have been stocking up and over-ordering deliveries.
If they’re ultimately unable to sell through that inventory and end up needing to liquidate it in off-price channels, that could be advantageous to TJX, which has long benefited from supply chain disruptions and other “chaos” in the market, its CEO Ernie Herrman told analysts in November when the company reported fiscal third-quarter earnings.
As TJX’s growth has slowed in the U.S., the discounter has started expanding overseas. It’s taken a stake in Brands for Less, a Dubai-based off-price chain, and also plans to enter Spain early next year. More
General Motors said Wednesday it is increasing its quarterly dividend by 25% to 15 cents per share — matching that of crosstown rival Ford Motor.
It also announced a $6 billion stock repurchase program, $2 billion of which is expected to be completed during the second quarter.
As of the end of last year, GM had fewer than 1 billion shares outstanding – achieving a target announced earlier in the year by GM CFO Paul Jacobson.
DETROIT – General Motors is raising its quarterly dividend and initiating a new $6 billion share repurchase program as the company attempts to reward investors amid slowing industry sales and profits.
GM announced Wednesday it is increasing its quarterly dividend by 25% to 15 cents per share — matching that of crosstown rival Ford Motor. The higher dividend is expected to take effect with the company’s next planned payout, scheduled to be announced in April.
Under the $6 billion repurchase plan, $2 billion in buybacks are expected to be completed during the second quarter.
“The GM team’s execution continues to be strong across all three pillars of our capital allocation strategy, which are to reinvest in the business for profitable growth, maintain a strong investment grade balance sheet, and return capital to our shareholders,” said GM CEO Mary Barra in a news release.
Barra last month suggested the company would continue to return capital to shareholders this year, pending board approval. Since 2023, the automaker has announced $16 billion in stock buyback programs, resulting in the retiring of more than 1 billion outstanding shares.
Despite such actions and reporting strong quarterly results, including regularly outperforming Wall Street’s expectations, shares of GM are down more than 12% this year.
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GM, Ford and Stellantis stocks in 2025.
Wall Street analysts have cited plateauing industry sales, regulatory uncertainty around tariffs and a lack of potential growth opportunities as all weighing on the stock.
GM said the total number of shares ultimately bought back the $2 billion accelerated share repurchase will be based on the average of the daily volume-weighted price of GM’s common stock during the term of the program. The program is being executed by JPMorgan and Barclays.
Outside of the accelerated program, GM will have another $4.3 billion of capacity remaining under its share repurchase authorizations “for additional, opportunistic share repurchases,” the company said. That includes $300 million from its last $6 billion stock buyback program from June.
As of the end of last year, GM had fewer than 1 billion shares outstanding – achieving a target announced earlier in the year by GM CFO Paul Jacobson.
“We feel confident in our business plan, our balance sheet remains strong, and we will be agile if we need to respond to changes in public policy,” Jacobson said in a statement. “The repurchase authorization our board approved continues a commitment to our capital allocation policy.”
GM’s 2025 guidance includes net income attributable to stockholders in a range of $11.2 billion to $12.5 billion, or $11 to $12 per share; adjusted earnings before interest and taxes (EBIT) of $13.7 billion to $15.7 billion, or $11 to $12 adjusted EPS; and adjusted automotive free cash flow of between $11 billion and $13 billion.
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Target has struck a deal with Champion to carry an exclusive line of sportswear, including baseball caps, sweatshirts, skorts and duffel bags.
The cheap chic retailer has long used brand collaborations to draw shoppers to its stores and website.
The discounter is looking for ways to drive higher sales, especially in more profitable categories like apparel.
Customers shop at a Target store on May 20, 2024 in Miami, Florida.
Joe Raedle | Getty Images
Target will soon have another brand to dangle as the discounter tries to convince more shoppers to buy clothing and other discretionary merchandise — Champion.
On Wednesday, the cheap chic retailer announced that it’s struck a multi-year deal with the sportswear brand long associated with hoodies and sweatpants. Authentic Brands Group bought Champion from HanesBrands last year.
Starting in August, Target will carry an exclusive line of more than 500 items from Champion in most stores and online, including apparel for adults and kids, sporting goods, accessories and bags. It will also have a limited-time collection of varsity-inspired apparel for women and men from Champion in September. Most items will cost less than $40, the company said.
Target’s deal with Champion comes as the Minneapolis-based retailer tries to rev up its stock performance and its sales, particularly in more profitable categories like apparel and home goods. The company raised its sales forecast for the fiscal fourth quarter, but not its profit outlook, as deals drew holiday shoppers in November and December.
The big-box retailer said in January that it expected comparable sales in the holiday quarter to grow by about 1.5%. The metric includes sales on Target’s website and stores open at least 13 months.
For Target, apparel trends turned positive year-over-year in the fiscal second quarter. The category’s sales decelerated by about 4 percentage points sequentially in the fiscal third quarter, but company leaders blamed challenging weather and called out strength in its women’s apparel business.
Momentum with apparel sales contributed to the company hiking its holiday-quarter sales forecast in January, Chief Commercial Officer Rick Gomez said.
Target will report its full holiday-quarter results on Tuesday.
The results will come as shares of the retailer have fallen about 16% over the past year compared to the S&P 500’s roughly 17% gains during the same period.
In an interview with CNBC, Gomez said shoppers have remained selective after years of feeling pinched by inflation. Yet he said Target has attracted customers’ attention and dollars with fresh items.
For example, he said, customers responded in November when Target started selling leggings from All in Motion, which came in bright colors and glittery patterns, for $25. Shoppers also responded to the redesign of bras for Auden, its intimates and sleepwear line, he said.
“When we have newness with style, on trend, at affordable prices, the consumer is willing to shop,” he said.
Target has long used brand collaborations as a competitive differentiator. It has long-term partnerships with Levi’s, Ulta Beauty and Kendra Scott, and had limited-time collections with other brands, such as Diane Von Furstenberg.
It’s not the first time that Target has carried Champion. The big-box retailer sold C9 by Champion for about 15 years, but replaced it with All in Motion, Target’s own brand of workout clothing, in 2020.
Gomez said the new Champion line will have a more fashion-forward feel, premium fabrics and unique details, like the Champion logo in Target’s signature red. It’s made up of sportswear that’s designed to lounge or live in, rather than performance wear meant for the gym, he said.
Items will cover a wide range, including baseball caps, sweatshirts, skorts and duffel bags. And the limited-time collection will include merchandise like a varsity-themed cardigan sold with patches that customers can add to customize their look.
Target draws about 15% of its annual sales from apparel and accessories, according to the company’s fiscal 2023 filing, which is the most recent available.
For the past two years, the apparel category has been on a bumpy ride, said Kristen Classi-Zummo, industry analyst at market research firm Circana who specializes in fashion and apparel. Consumers pulled back on purchases because they had refreshed their wardrobes at the end of the Covid pandemic. Then, she said, spending took a hit in 2023 as households looked for ways to trim the budget because of higher prices of necessities like groceries and housing.
Apparel sales totaled $240.6 billion in 2024, down 2% year over year, according to Circana data. That’s up about 6% compared to pre-pandemic 2019. Yet it’s a sharp contrast from 2021, when sales jumped 32% year over year.
Classi-Zummo said U.S. consumers have tended to look for ways to save on basics, such as new pajamas and underwear, and splurge on trendier statement pieces. For example, she said, men’s underwear packs under $20 and women’s denim over $150 have both driven sales growth, according to Circana’s analysis.
“They’re being very strategic about where they’re spending,” she said. “It’s really about what they find value in and some may find value in investing in things people notice.” More
