Chart: The EconomistOn June 18th Nvidia overtook Microsoft as the world’s most valuable company. Its market capitalisation of $3.3trn is more than 20 times what it was in January 2020. Investors are buying its shares as greedily as tech giants are buying its artificial-intelligence chips. Nvidia’s revenue in the quarter ending in April rose by 262%, year on year. Its net income rose by 628%.■ More
Some corporate tie-ups delight investors. Others make them groan. The purchase of a 41% stake in ITA, Italy’s national airline, by Lufthansa, a German carrier, for €325m ($350m) is an example of the latter. Rumours that the EU is close to blessing the deal have contributed to a slump in Lufthansa’s share price.ITA, once called Alitalia, is hardly a crown jewel. Since its founding in 1946 it has turned an annual profit only three times. The Italian government privatised the company in 2009—then renationalised it in 2020, rebranding it as ITA in the hope of a fresh start. Air France-KLM and Etihad, two airline businesses that had taken minority stakes in the carrier, wrote off their investments. The Italian government spent around €3.5bn during the covid-19 pandemic to keep the company aloft, equivalent to roughly €300,000 per employee. More
Sweet and spicy with a sour tinge, sriracha sauce was an instant hit when David Tran, a Vietnamese refugee, brought it to America in the 1980s under the brand Huy Fong Foods. Asian eateries were the first to snap up Mr Tran’s hot sauce, but before long the green-nozzled bottle, with its distinctive rooster logo, had become a staple in restaurants and pantries alike. Within just a few years Mr Tran went from hawking his wares out of a Chevy van in Los Angeles to walking the floor of a 20,000-square-metre factory. By 2020 his business was worth $1bn.Since then, however, it has suffered a meltdown. First came grumblings by fans that the condiment had lost its vibrant crimson colour and peppery punch. Next came the shortages. Enthusiasts soon panicked and began to hoard the stuff. At one point last year resale prices for Huy Fong’s sauce on eBay, an e-commerce site, reached as high as $150 per bottle. To cap it off, last month the company announced it was halting production until at least September. More
Drive a few hours from Lisbon towards Spain, past the olive farms, and you will arrive at Europe’s largest artificial lake, at the Portuguese town of Alqueva. The first thing that catches the eye is the large hydroelectric dam. But look closer and you will also spot a bright patch of floating glass. It is the floating solar-power plant built by EDP, a Portuguese utility that is one of the world’s biggest developers of renewable energy. Critics have long dismissed such projects as a costly and trouble-prone experiment. The technology, however, is now ready to shine.In this first phase of the project at Alqueva, engineers have stationed some 12,000 photovoltaic (PV) modules on floating pontoons made from partially recycled plastic and locally sourced cork. These are connected to an energy-storage system incorporating lithium-ion batteries and integrated with the hydroelectric dam’s power station. More
Darden Restaurants reported mixed quarterly results for its fiscal fourth quarter.
Its acquisition of Ruth’s Chris Steak House fueled a 6.8% jump in net sales, but the company missed Wall Street’s estimates for quarterly revenue.
The restaurant company reported flat same-store sales growth.
Olive Garden Italian restaurant sign showing company logo, Spokane Valley, Washington, owned by Darden Restaurants Incorporated headquartered in Florida.
Universal Images Group | Getty Images
Darden Restaurants on Thursday reported mixed quarterly results as Olive Garden’s same-store sales fell for the second consecutive quarter.
For fiscal 2025, Darden is forecasting that its same-store sales will grow just 1% to 2%.
Shares of the company rose more than 2% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting for the quarter ended May 26, based on a survey of analysts by LSEG:
Earnings per share: $2.65 adjusted vs. $2.61 expected
Revenue: $2.96 billion vs. $2.97 billion expected
Darden reported fiscal fourth-quarter net income of $308.1 million, or $2.57 per share, down from $315.1 million, or $2.58 per share, a year earlier.
Excluding costs related to the Ruth’s Chris acquisition and other items, the company earned $2.65 per share.
Net sales rose 6.8% to $2.96 billion, fueled by its acquisition of Ruth’s Chris Steak House and 37 other net new locations.
Darden’s overall same-store sales were flat for the quarter, dragged down by weaker-than-expected sales at Olive Garden and its fine-dining restaurants.
Olive Garden’s same-store sales fell 1.5%. Analysts were expecting the Italian-inspired chain to report flat same-store sales growth, according to StreetAccount estimates. Last quarter, Olive Garden’s same-store sales fell 1.8%, driven by a pullback from low-income consumers.
Darden’s fine-dining restaurants, which include The Capital Grille and Eddie V’s, saw their same-store sales shrink 2.6% in the quarter. That division now includes Ruth’s Chris, but those same-store results won’t be included in the category total for several more quarters.
LongHorn Steakhouse, which is overtaking Olive Garden as the gem of Darden’s portfolio, was the only segment to report same-store sales growth. The chain’s same-store sales rose 4% in the quarter.
Looking to fiscal 2025, Darden is forecasting earnings per share from continuing operations of $9.40 to $9.60, in line with Wall Street’s expectations of $9.55 per share. The company is also anticipating net sales of $11.8 billion to $11.9 billion, on the low end of analysts’ expectations of $11.94 billion.
Darden is projecting total inflation of 3% and same-store sales growth of 1% to 2% in fiscal 2025. Ruth’s Chris won’t be included in Darden’s same-store sales until the second quarter of fiscal 2025. The company plans to spend $550 million to $600 million on capital expenditures. More
To witness India’s growing role as a manufacturing hub, dodge Bangalore’s notorious traffic and head north. Around 45km outside the city, amid the dust and debris of construction, Foxconn, a Taiwanese contract manufacturer, is turning 120 hectares of farmland into a factory that will produce around 20m iPhones a year. Foxconn’s plant will be the third facility near Bangalore dedicated to churning out phones for Apple, an American tech giant. The other two are run by Tata, India’s largest conglomerate.Bangalore, home to many of India’s IT giants, is better known for its software than its hardware. However, the new factories suggest that, in one industry at least, India’s efforts to transform itself into a manufacturing powerhouse are bearing fruit. Electronics manufacturing—the business of building mobile phones, televisions and other gadgets—is thriving in India. The value of electronics it produced rose from $37bn to $105bn (3% of GDP) between the fiscal years ending in March 2016 and March 2023 (see chart). The government wants to triple this again by fiscal 2026. Although India’s production of electronics accounts for just 3% of the global total, its share is growing faster than any other country’s. More
Palmer Luckey owns six helicopters. He would like a seventh: a Chinook, the workhorse of Western armed forces. When your guest Schumpeter, meeting Mr Luckey in London, suggests that the British Army might sell him one, he laments that “eccentric US civilians” are low on the priority list of buyers. “I’ve been thinking,” he says, “I need to maybe hit up the Taliban.”Mr Luckey, who co-founded Anduril, a defence-technology company, in 2017, is joking. Still, coming from a mulleted 31-year-old in a Hawaiian shirt and flip-flops, who made his fortune selling a virtual-reality company to Facebook and has now branched out into Game Boy replicas, it sounds plausible. Despite his eccentricities, Mr Luckey is not a man to be taken lightly. Anduril is now nipping at the heels of America’s biggest armsmakers. More
In the last few months, a steady stream of family-friendly movies have arrived in cinemas, including Paramount’s “IF” and Sony’s “The Garfield Movie.”
The latest release, Disney and Pixar’s “Inside Out 2” tallied $155 million during its domestic opening weekend.
Each family-film release has built on the success of the last, reinvigorating the box office and giving movie theater operators hope for a stronger second half of the year.
Amy Poehler and Maya Hawke voice Joy and Anxiety, respectively, in Disney and Pixar’s “Inside Out 2.”
Disney | Pixar
A big piece has been missing from the box office — family films.
A handful of kid-friendly hits — Universal’s “Super Mario Bros.” chief among them — have boosted ticket sales. But many family features either debuted on streaming platforms instead of the big screen after the pandemic, or were released so far away from each other on the calendar that any ticket sales momentum soon disappeared.
In the last few months, a steady stream of family-friendly movies have arrived in cinemas. Each release has built on the success of the last, reinvigorating the box office and giving movie theater operators hope for a stronger second half of the year. Disney and Pixar’s “Inside Out 2” gave an especially big jolt as it tallied $155 million during its opening weekend — a feat that helped restore the animation studio’s reputation within the industry following a rough patch.
“Momentum is a huge factor” in ticket sales, said Chris Johnson, CEO of Classic Cinemas, a Midwestern theater chain.
So far in 2024, the domestic box office is down 23% from last year and trails 40% from 2019. It currently stands at $3.08 billion, according to Comscore.
More kid-friendly hits, like the coming “Despicable Me 4,” could be one of the keys to a box office rebound.
The “family-friendly” film genre is a wide one. The definition varies even among box-office analysts, as some say the film’s rating is the qualifier while others suggest it depends on the content of the film itself.
“Family movies come in all shapes and sizes,” said Shawn Robbins, founder and owner of Box Office Theory. “We as observers sometimes limit the descriptor to animated movies, or films of a certain rating, or those that are literally about a family of characters. They encapsulate a wide variety of stories, though.”
Robbins noted that family movies can often include superhero flicks, live-action adventure films and comedies.
“Think about how many families it took for the likes of Star Wars, the Marvel universe, ‘Top Gun: Maverick,’ and ‘Barbie’ to earn as much as they did,” he said. “The bottom line is what’s friendly, accessible and relatable to as many demographics as possible.”
So while some families that came out for “Inside Out 2” might consider the likes of Universal’s “Twisters” or Warner Bros.’ “Beetlejuice Beetlejuice” family-friendly fare due out later this year, others might choose to stick to Sony’s “Harold and the Purple Crayon,” Paramount’s “Transformers One” or Universal’s “The Wild Robot.” The much-anticipated “Moana 2” arrives at Thanksgiving and a third “Sonic” film hits in December.
“No matter how you define it, the family-film genre arguably more than any other was hit hardest by the pandemic with parents understandably reluctant to head out to a brick-and-mortar theater during the height of that unfortunate situation,” said Paul Dergarabedian, senior media analyst at Comscore. “Fast forward to 2024 and family films have been the undeniable bright spot for what has been a very challenging summer.”
Prior to the pandemic, more than two dozen family films arrived in theaters in 2019, with Disney’s “Aladdin,” “The Lion King,” “Toy Story 4” and “Frozen II” making up four of the 10 highest grossing films of the year.
In 2020, less than a dozen family films were released. Due to production shutdowns from the pandemic and dual Hollywood labor strikes, the number of releases remains significantly below 2019 levels.
“2023, for us, was actually a record year, but it could have been much better,” Classic Cinemas’ Johnson said, noting the absence of family-friendly fare. “You cannot ignore the family audience and its importance.”
Much-needed momentum
Johnson said he feels “reenergized” after the opening performance of “Inside Out 2.”
The film tallied another $22.2 million on Monday, 14% of its weekend and the second-best Monday ever for a Pixar film.
While it was clear there was an appetite for the sequel, Johnson noted that it benefited from the recent releases of Paramount’s “IF,” which opened to $33 million, and Sony’s “The Garfield Movie,” which opened to $24 million.
Families that attended screenings of these films would have seen posters and cardboard cutouts marketing the approaching release of “Inside Out 2” and likely saw a trailer for the film as part of the theater’s coming attractions reel.
“‘Inside Out 2’ was certainly it’s own entity and was going to do well,” Johnson said. “But I think those lead-ins helped. I think the momentum of the box office and the similar genre does [have an] impact and I can’t wait for that to roll into ‘Despicable Me 4.'”
Due out July 3, “Despicable Me 4” is currently expected to snare between $60 million and $80 million during its debut, on par with previous installments in the franchise, according to data from Comscore. Dergarabedian agreed that the success of “Inside Out 2” could boost the potential for “Despicable Me 4.”
— Disclosure: Universal Pictures, which distributes “Despicable Me 4,” is owned by NBCUniversal, the parent company of CNBC.
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