Business

American Airlines slashed its sales outlook on Tuesday and now expects unit revenues to fall as much as 6% in the second quarter from a year earlier.
The company has also let go of its chief commercial officer, Vasu Raja.
The airline has trailed rivals Delta and United in recent months.

American Airlines passenger jets are lined up at the gates at Ronald Reagan Washington National Airport in Arlington, Virginia, on Feb. 10, 2024.
J. David Ake | Getty Images

American Airlines slashed its sales outlook on Tuesday. The company has also let go of its chief commercial officer, Vasu Raja. He will leave his position next month.
American Airlines said it expects unit revenues to fall as much as 6% in the second quarter from a year earlier, down from a previous forecast of a decline of no more than 3%. The carrier also trimmed its adjusted earnings estimate for the period to a projected range of $1 to $1.15 a share, down from a prior range of $1.15 to $1.45 a share.

The airline has trailed rivals Delta and United Airlines in recent months in financial performance. United Airlines later on Tuesday reiterated its expectation to earn an adjusted $3.75 to $4.25 per share in the second quarter.
Executives from both carriers will present at a Bernstein conference Wednesday morning. American Airlines CEO Robert Isom plans to discuss the carrier’s plan to modify its ticket distribution strategy in favor of driving bookings to its own platforms instead of third-party channels and agencies.
When asked during an April earnings call whether American Airlines had been receiving pushback from corporate customers while rivals reported strong business travel growth, Isom admitted that the carrier could have to make changes to the system.
“Look, we’ve got some fine-tuning to do,” Isom said during the April call. “No doubt the objective here is … to hang on to all the cost savings and then also to make sure that we maximize revenue production. As we take a look at the first quarter, there’s quite likely some benefit that our competitors received because of some of … the changes that we’ve made.”
Raja, just more than two years into his role as commercial head, had been on leave recently, and a spokeswoman for the carrier said last week that he was not leaving the company. That changed after internal discussions in the past few days, according to a person familiar with the matter.

He previously served as chief revenue officer and headed American Airlines’ network and alliances departments.
Raja did not immediately respond to CNBC’s request for comment.

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Correction: This story has been updated to correct Vasu Raja’s title. More

Starbucks and Workers United will resume bargaining talks this week after a successful two-day session last month.
After its most recent earnings report, CEO Laxman Narasimhan admitted Starbucks was seeing a more cautious consumer when it came to spending, but also mentioned the need to make improvements to stores.
Workers United is pushing for better pay and benefits as well as improved staffing and scheduling.

When Starbucks and its baristas union resume contract bargaining this week, workers may have renewed momentum at their backs — courtesy of the company’s own CEO.
The coffee giant last month found itself reporting an objectively challenging quarter. U.S. same-store sales fell 3% and traffic dropped 7%. As a result, the company cut its 2024 forecast.

CEO Laxman Narasimhan admitted Starbucks was seeing a more cautious consumer when it came to spending, but also mentioned the need to make improvements to stores as the company saw troubling trends. Starbucks reported rates of incomplete mobile app orders in the mid-teens and said occasional customers came in less.
Narasimhan, in prepared remarks to Wall Street analysts, cited some of the challenges that union workers have been highlighting in their bid for better working conditions.
“Specifically in our U.S. stores, we’re focused on creating a more stable environment for partners through investments in equipment innovation, process improvements, staffing, scheduling and waste reduction, all things our partners value and prioritize creating a more satisfying work environment in our stores while de-risking our business,” Narasimhan said on a call with analysts.
He added in an interview with CNBC’s “Squawk on the Street” that throughput has improved, and said the company’s action plan will continue to build on that momentum with improvements to stores and better communication of value.
“We have improved speed of service quarter over quarter. If you look at the processes that we are rolling out, particularly around peak, what we are finding is that we have opportunities to improve that even further with changes in processes and tools that we provide to partners at peak,” Narasimhan said.

For Workers United, the union behind the Starbucks organizing, his admission that more could be done was promising.

Staffing challenges

The organizing efforts began nearly three years ago in Buffalo, New York, under then-CEO Kevin Johnson. At the time, Starbucks was a company long known for progressive benefits for workers.
But baristas, emboldened by the experience they had during the Covid-19 pandemic, pushed for changes in the company’s cafes. More than 430 unionized stores and two chief executives later, the two sides have made “significant progress” in contract bargaining, striking a more optimistic tone after a successful two-day session last month.
Starbucks and the union are meeting to continue working on the framework that will inform every single-store contract moving ahead.
“I do believe that we are seeing the company at this point acknowledge that there are issues, significant issues,” Michelle Eisen, a Workers United delegate and original member of the company’s first organized union in Buffalo, told CNBC ahead of negotiations.

People picket outside of a Starbucks store in New York’s East Village on Nov. 16, 2023.
Spencer Platt | Getty Images

“We heard Narasimhan make that statement after the earnings call that they’re aware that stores have experienced staffing issues,” said Eisen, who has been with the company for more than a decade and is among 150 delegates attending in-person bargaining sessions with Starbucks on behalf of the union.
“I think this is a new world right now to be able to say that the CEO has stepped up and said, ‘Look, we’ve got some problems, we know we’ve got some problems, we want to work towards fixing those problems,'” Eisen said. “And as a worker at a unionized location, with proposals on the table to help solve these issues, that’s exactly what I want to hear.”
In internal surveys and in bargaining committee meetings, union-represented partners consistently rank “staffing and scheduling” as their highest priority issue. The vast majority of represented partners report frequently working short-staffed, and a simple majority of partners report that they are getting scheduled for fewer hours than they want or need.
The union has also pushed for better pay and benefits.
Starbucks says it has made significant progress over the past two years on staffing and scheduling. An advanced staffing model is able to take into account both historical trends of allocated hours per store, but also current trends, available product types and upcoming promotions, the company said. Starbucks says its data affirms partners now get more hours and that partner retention and sentiment have both increased across the U.S. as schedules become more stable and consistent.

Orders up

Staffing improvements are likely to be even more important as Starbucks projects an increase in traffic and orders.
In July, Starbucks plans to open up its mobile order and pay app to nonrewards members in a bid to win back its occasional customer base. This will create the ability to target all customers with new products and promotions in an effort to grow traffic.
It is also due to introduce what it is calling the Siren System: new equipment and protocol to address customer ticket times. The Siren System includes a custom ice dispenser, milk-dispensing system and faster blenders to reduce steps for baristas and get drinks to customers faster. It will reach 1,000 stores in July.
“It’s a terrible feeling to be on that floor and to pull a sticker and to look at the time and then look up at the clock on the wall and realize, you’re already 8 minutes behind,” Eisen said of mobile orders.
“Eight minutes doesn’t sound like a lot. But when you’re producing 100 transactions per half hour … and you realize you’re probably backed up 20 drinks, it’s a bad feeling,” she said.
There has been another call for change at Starbucks stores that may carry weight at the negotiating table. Former Starbucks CEO Howard Schultz in a LinkedIn post after the company’s earnings report said management needs to spend more time with workers to understand ongoing challenges.
It was the third time he has publicly weighed in on Starbucks and its operations since leaving the company and its board last year. It was a notable shift in tone from when Schultz returned to the company in 2022 to respond to the union challenge, with a far more combative attitude.
Narasimhan was mentored by Schultz for six months before taking the helm at the company, and he spent time in stores with baristas, even earning his barista certification before becoming CEO in 2023.
“I have emphasized that the company’s fix needs to begin at home: U.S. operations are the primary reason for the company’s fall from grace,” Schultz said. “The stores require a maniacal focus on the customer experience, through the eyes of a merchant. The answer does not lie in data, but in the stores.”
At the time, the coffee giant said in response, “We always appreciate Howard’s perspective. The challenges and opportunities he highlights are ones we are focused on. And like Howard, we are confident in Starbucks’ long-term success.”

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Not since the 1980s have Japanese businesses generated so much excitement. Japanese companies’ profit margins have doubled in the past decade or so. They are forking out twice as much to their owners in the form of dividends and share buy-backs as they did ten years ago. Shareholder-friendly changes to corporate governance in Japan have caused foreign investors to flock to the country once again. Having languished for decades, the Nikkei 225 index, which tracks the value of the country’s largest listed firms, is up by 25% over the past year (see chart 1). In February it at last exceeded the record it set in 1989, just before Japan’s bubble burst.Much of this success reflects Japan Inc’s transformation over the past 35 years. Faced with economic torpor at home, brought on by the stockmarket crash and an ageing population, Japan’s industrial giants have spent the past few decades hunting for growth abroad. In 1996 revenue booked by the foreign subsidiaries of Japanese manufacturers was just 7% of their total sales. Last year that figure reached 29%, a record high. More

Porsche on Tuesday revealed a new hybrid version of its iconic 911 sports car for the first time, with a starting price of $164,900.
The new 911 Carrera GTS can accelerate from 0 to 60 mph in 2.9 seconds – 0.3 seconds quicker than the prior non-hybrid GTS model – and reach a top track speed of 194 mph.
A convertible, or cabriolet, version of the hybrid sports car will start at $178,200.

2025 Porsche 911 Targa 4 GTS hybrid sports car

Porsche on Tuesday revealed the first-ever production hybrid version of its iconic 911 sports car, with a starting price of $164,900.
The 2025 911 Carrera GTS hybrid marks a significant change to the iconic German sports car amid the automotive industry’s focus on increasing electrified vehicles and tightening fuel economy standards.

Executives with the Volkswagen-controlled company have said the 911 would be the last car in its portfolio to offer an all-electric variant, if it ever does, to maintain the vehicle’s famed driving dynamics, which they say the hybrid achieves.
“We developed and tested various ideas and approaches to decide on a hybrid system that optimally suits the 911,” Frank Moser, Porsche vice president of the 911 and 718 model lines, said in a release. “The result is a unique powertrain that is well-integrated into the overall concept and enhances the performance significantly.”
The new 911 Carrera GTS can accelerate from 0 to 60 mph in 2.9 seconds – 0.3 seconds quicker than the prior non-hybrid GTS model – and reach a top track speed of 194 mph. It is powered by a newly developed 3.6-liter boxer hybrid engine that produces 532 horsepower and 449 foot-pounds of torque.

911 Carrera GTS

The 911 Carrera GTS hybrid will be available as a coupe starting at $164,900. A convertible, or cabriolet, version will start at $178,200. Both are available in rear-wheel-drive and all-wheel-drive configurations.
Ordering for the hybrid models is now open, with deliveries expected to U.S. dealers toward the end of 2024.

Porsche is the latest automaker to increase or add hybrid vehicles to its lineup amid a slower-than-expected adoption of all-electric vehicles. Its current electrified lineup includes six plug-in hybrid Cayenne models, three Panamera plug-in hybrid models and 10 all-electric Taycan models. It also has used hybrid engines in racing, including with the 911.
Porsche said that based on customer demand, it expects that at least 80% of its vehicles sold globally will be partially or fully electric by 2030.

2025 Porsche 911 Carrera GTS hybrid sports car

The hybrid model was revealed Tuesday alongside an updated lineup of Porsche 911 sports cars for the 2025 model year, which will begin arriving in U.S. Porsche showrooms in the fall. The non-hybrid vehicles, depending on the model, range from about $120,000 to more than $241,000 for a 911 GT3 RS.
Updates to the 2025 911 include its exterior and interior designs, including a fully digital driver instrument cluster for the first time; enhanced engine performance; and enhanced standard equipment such as rear-axle steering for increased stability.
Porsche’s first-quarter global sales were 77,640 vehicles, down roughly 4% from a year earlier. Sales of 911 vehicles were 2,510 units in the U.S., up 30% from the first quarter of 2023.

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McDonald’s has opened four CosMc’s locations since announcing the restaurant spinoff.
The company also announced a mobile app and loyalty program for CosMc’s, which will speed up service times and allow it to learn more about customers.
McDonald’s created the spinoff brand to compete with the likes of Starbucks and Dutch Bros to win over younger consumers.

The purple coloring of CosMc’s Tropical Spiceade comes from the mix of lemonade, pineapple flavoring and dragonfruit.

Nearly six months since McDonald’s opened its first CosMc’s location, the hours-long drive-thru lines have died down, but the chain is just getting started.
The burger giant created the spinoff using one of its lesser-known McDonaldland mascots, CosMc, an alien who loves McDonald’s cheeseburgers. While unveiling CosMc’s at an investor event in December, McDonald’s CEO Chris Kempczinski said the company set out to create a brand that could sell customizable drinks and coffee popular in the afternoon segment to attract younger consumers.

The new brand rollout comes as beverages are increasingly “looked at now as part of that snack area — more affordable, indulgent and perhaps even a healthier treat,” said Katie Belflower, an editor at restaurant research firm Technomic. “It’s a good profit margin for restaurants. With beverages, you can get really creative, without necessarily having the product lines that you would have to invest in with food.”
Since opening the initial location in the Chicago suburb of Bolingbrook, McDonald’s has opened three more CosMc’s restaurants, all in Texas. For now, the chain is planning to open 10 locations by the end of this year for a test run, with all but one located in the Lone Star State.
In another sign of the new brand’s expansion, it will launch its own mobile app and loyalty program, called CosMc’s Club, on Tuesday. Customers can use the app to place orders that they pick up either inside the restaurant or in the drive-thru lane. And loyalty program members earn 10 points for every dollar they spend; once they rack up 400 points, they can redeem them for $2 rewards.
While the long-term fate of CosMc’s is still too soon to tell, the gamble could pay off for McDonald’s even if the spinoff never makes it past the 10-location test phase. The app and loyalty program will give the chain even more consumer insight.
“The cost of doing this, to McDonald’s, is a rounding error. Even if they shut them all down six months from now, they still learn some things. Sometimes the learnings can be more valuable than you might imagine they would be,” Mark Kalinowski, restaurant industry analyst and chief executive of Kalinowski Equity Research, told CNBC.

CosMc’s buzz dies down

At McDonald’s December investor presentation, Kempczinski downplayed the short-term effect of CosMc’s.
“Let me emphasize again, we’re talking about 10 stores,” he said at the event. “The big story isn’t about CosMc’s, per se. The big story is what it says about McDonald’s and our potential.”
But for many consumers, CosMc’s was the headline. When the first location opened days later in Illinois, eager customers waited for hours in drive-thru lines that dragged around the shopping center for the chance to buy McPops and Churro Frappes.
Weeks later, the buzz had started dying. According to Intouch Insight, the average wait time from entering the CosMc’s drive-thru line to reaching the speaker to order was 11 minutes and 13 seconds, based on visits from mystery shoppers in January and February. But the average service time, after ordering, was just four minutes and one second, trailing the industry benchmark by just six seconds.
On a Monday afternoon in May, there was no line for this CNBC reporter to reach one of the four drive-thru intercoms to place an order.
Investors’ interest has also cooled as other parts of McDonald’s business draw more attention.
“Six months ago, there was a lot of curiosity, but now that you’ve seen McDonald’s same-store sales decelerate, that’s where my clients’ focus is,” Kalinowski said.
In the first quarter, McDonald’s reported U.S. same-store sales growth of 2.5%, a slowdown as price increases fade and diners pull back their restaurant spending.

The CosMc’s experience

The digital menu board tells customers to hang tight while their orders are prepared.
Amelia Lucas / CNBC

From the outside, the CosMc’s location in Bolingbrook isn’t much to look at. Four drive-thru lines await customers to place their orders. The building’s indigo exterior features the brand’s name – but no sign of its namesake mascot.
In fact, while CosMc plays an outsize role in the brand’s fictional origin story on the CosMc’s website, he’s basically invisible from its branding or restaurant.
“He is not as well-known of a character,” Belflower said. “I think that’s almost to their benefit, because people can understand how CosMc’s is different from McDonald’s itself — but it still has a retro font and coloring and things like that, so I think all of that helps tie it into the nostalgia.”
CosMc’s absence could also be due to the fact that the chain’s target customer likely wasn’t born yet when McDonald’s advertisements featuring CosMc aired in the ’80’s and ’90’s.  
“Just in looking at the menu, it looks like it’s designed for half my age and under,” said Kalinowski, whose industry experience spans more than two decades.
CosMc’s customers can choose from a vast array of drinks and a smaller snack menu. Sour Cherry Energy Burst, Island Pick-Me-Up Punch and Popping Pear Slush are among the beverages that McDonald’s created specifically for the chain.
Drinks, like a Tropical Spiceade, can be customized with “boosts,” like a vitamin C shot or an energy shot, tapioca pearls known as boba or a choice of eight different syrups. The chain also offers coffee drinks – like its Churro Cold Brew Frappe, whose largest size contains nearly five times the amount of caffeine found in an average cup of brewed coffee.
CosMc’s is also the latest example of a beverage-focused restaurant that doesn’t just sell coffee. There’s Utahan soda chain Swig, now majority-owned by Larry Miller’s family office. Dutch Bros gets about a quarter of its sales from its Blue Rebel energy drink. And Starbucks’ Refreshers, first introduced a dozen years ago, are the chain’s fastest-growing beverage category in the U.S., with new spicy flavors available this spring.
Non-coffee drinks tend to appeal more to consumers looking for a pick-me-up in the afternoon. While they still might want caffeine, a flavored beverage like a Blueberry Ginger Boost from CosMc’s might be more appealing than another coffee.
CosMc’s level of customization would be difficult at a traditional McDonald’s because it would slow down its drive-thru lanes too much. For example, Starbucks has credited the shift to cold drinks and pricy customizations, like cold foam, for its sales growth in recent years, but both customers and baristas have griped about complicated orders slowing service too much.
One way to speed up CosMc’s service could be using its digital menu boards differently. The CosMc’s menu board plays ads until a car pulls up next to the nearby intercom, leaving customers little time to ponder the menu of more than 70 drinks and food items. The launch of mobile and online ordering will likely also help speed up wait times.
Once customers finish ordering, they can pay at the speaker or wait to pay with a cashier at the pick-up window. CosMc’s also has customers wait by the intercom where they ordered until their order is ready to pick up. The menu board relays what pick-up window to drive up to grab the order.
Envisioned as a small-format location, CosMc’s doesn’t offer any in-restaurant seating, leaving it up to customers to sit in the 10-spot parking lot or keep driving. The Bolingbrook CosMc’s, a former Boston Market location, is much larger than McDonald’s intends for the rest of the brand’s locations. But with empty real estate, a 45-minute drive from the company’s Chicago headquarters and a traditional McDonald’s right next door, it makes sense why the company chose that location as the first spot for the spinoff.
But the location’s history is also a warning for McDonald’s. The company bought Boston Market out of bankruptcy in 2000, intending to use its real estate. But it instead kept running the brand.
Seven years later, McDonald’s sold it off, following a broader divestment in other secondary brands like Chipotle Mexican Grill. At the time, McDonald’s sales were struggling, and executives blamed some of its woes on a lack of focus. More

Moviegoers returning to cinemas after the pandemic are seeking premium experiences — higher-quality picture and sound — and are willing to pay more for those tickets.
4DX utilizes motion seats, practical effects and sensory elements to immerse viewers in a movie like Warner Bros.’ “Furiosa: A Mad Max Saga,” which opened in theaters Friday.
The 4DX experience costs an average of $8 more than traditional ticket prices, but that doesn’t seem to deter audiences.

Chris Hemsworth stars as the villainous Dementus in Warner Bros.’ “Furiosa: A Mad Max Saga.”
Warner Bros. Discovery

In George Miller’s new Mad Max film “Furiosa,” a red paint flare explodes and casts the theater screen in a saturated crimson cloud.
Feet away, among the rows of gyroscopic 4DX chairs, plumes of fog roll in, catching the red hue from the screen as if the flare somehow transcended the fourth wall and infiltrated the cinema. The fog parts, Chris Hemsworth as Dementus comes into focus and grins at the audience.

This is the 4DX viewing experience. It’s one of many multi-sensory moments programmed for “Furiosa: A Mad Max Saga,” which opened in theaters Friday, in order to immerse audiences in Miller’s latest visit to the vast Wasteland. And it amounts to a key value proposition at a time when cinemas are desperate to lure back moviegoers, particularly those in the younger demographics.
“We make movies different,” said Duncan Macdonald, head of worldwide marketing and theatre development for CJ 4DPlex Americas. “We are so different out there, with our motion capabilities and our environmental effects.”
In the wake of the pandemic, audiences grew used to shorter theatrical windows and having access to more content at home. At the same time, pandemic-related shutdowns and production stalls from two Hollywood strikes greatly limited the amount of content hitting theaters. As a result, consumers fell out of the habit of going to cinemas.
Moviegoers who have returned are seeking premium experiences — higher-quality picture and sound — and are willing to pay more for those tickets. 4DX is one option in the premium large format market alongside the likes of IMAX and Dolby Cinema. CJ 4DPlex also owns the ScreenX format.
“Premium movie theatre experiences are key to the health of the industry and with fewer films in the marketplace on average than in past years, the importance and essential nature of a company like 4DX comes into sharp focus,” said Paul Dergarabedian, senior media analyst at Comscore.

4DX utilizes motion seats, practical effects and sensory elements to immerse viewers in a movie. For Warner Bros.’ “Wonka,” the company piped in the smell of chocolate during screenings.
CJ 4DPlex Americas CEO Don Savant says the experience is “complementary” to routine moviegoing experiences, noting that 4DX cinemas attract younger consumers, predominantly in the 10-to-30 age range, who are seeking more experiential viewing.

4DX is a 4D film presentation system developed by CJ 4DPlex, a subsidiary of South Korean cinema chain CJ CGV. It allows films to be augmented with various practical effects, including motion-seats, wind, strobe lights, simulated-snow, and scents.

For consumers, the 4DX experience costs an average of $8 more than traditional ticket prices, meaning a ticket can range from $20 to $30 each. But the extra cost doesn’t seem to be detering audiences.
Last year, 4DX’s domestic locations tallied $53.4 million in ticket sales.
“Notably, the higher price for premium movie tickets is not a barrier to their success but rather seen as representing a solid value proposition for fans in pursuit of the best possible big screen experience,” Dergarabedian said. “This is good news for theater owners who, facing fewer wide release films in the marketplace, can boost revenues on a per-ticket basis while giving their patrons a great experience that will have them returning to the multiplex more often.” 
And, for major blockbuster titles, 4DX is proving to be even more popular. Ticket sales for Disney’s “Avatar: The Way of Water” topped $83.6 million from 4DX screens, or about 3.6% of the film’s total box office haul. It is currently the highest-grossing film for the screen format, Savant said.
“We want to give customers an easy excuse to leave their homes and visit a local Regal theater,” said CEO Eduardo Acuna of Regal Cinemas. “Premium formats like 4DX offer a movie-watching experience that cannot be replicated by any home theater setup. Each premium format serves a different purpose for storytelling, and each increases the enjoyment of watching a movie in a different and immersive way.”
Acuna noted that 4DX auditoriums are “a strong box office performer” for Regal.
Regal is the largest operator of 4DX screens domestically, with 50 of the 62 locations found in the U.S. and Canada. Globally, there are nearly 750 4DX screens with numerous theatrical partners. The highest volume is in Asia and Europe.
Savant said 4DX is adding around 25 to 30 screens per year worldwide, but is looking to push that figure up to 50 to 60 screens a year. The company is seeking to have around 1,200 4DX locations in the next five years. On average, each theater has around 140 seats.
Moviegoers who venture away from their couches and into a 4DX theater to see Warner Bros.’ “Furiosa” will feel from their seat the rev of motorcycles racing through the desert, smell gunpowder in the air during epic gun battles and even get hit with a soft spray of water as it’s flicked in the face of a character on the screen.
Last year, 4DX programmed more than 100 films for the souped-up viewing experience. Around 40 to 45 of those were major Hollywood titles, Savant said. Others included concert content, musical singalongs, anniversary titles and local language films.
Typically, the 4DX programmers, who are based in Seoul, have two to three weeks to craft the motion and special effects, although Savant said they can turn around a film in a week if the need arises. 4DX can program three titles at a time.
Both Macdonald and Savant referred to 4DX’s programmers as “artists,” describing the process — from the subwoofers in the seats to the fog machines — as different brushstrokes in a work of art.
“Every film is different,” said Macdonald. “So we look at the nuances of the different films that we have and how those are programmed.”
In some cases filmmakers will get involved, offering suggestions for when certain effects should be used and how subtle or bombastic they should feel or look.
“It’s the most dynamic way to see [a film],” Savant said.

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Each May, J.P. Morgan Private Bank releases its summer reading list, often serving as a book club for billionaires.
The 10 books are carefully curated to match the tastes and preoccupations of J.P. Morgan’s wealthy clients.
This year’s list includes books on effective communication, artificial intelligence, Formula One, whiskey, hidden vacation spots and the art collection of Alicia Keys and Swizz Beatz.

Arrows pointing outwards

Credit: J.P. Morgan Private Bank

A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high net worth investor and consumer. Sign up to receive future editions, straight to your inbox.
Today’s workaholic wealthy rarely have time to sit back and read a good book — except maybe for a few weeks in August. That’s why J.P. Morgan Private Bank, every May, releases its summer reading list, often serving as a book club for billionaires.

This year marks the 25th anniversary of the list, now called the J.P. Morgan Summer Reading List. The 10 books are carefully curated to match the tastes and preoccupations of J.P. Morgan’s wealthy clients. This year’s list includes books on effective communication, artificial intelligence, Formula One, whiskey, hidden vacation spots and the art collection of Alicia Keys and Swizz Beatz.
J.P. Morgan creates the list by surveying its more than 35,000 client advisors and employees globally and asking about the topics clients are talking and thinking about the most. This year, the advisors sent in more than 700 recommended book titles, which a committee whittled down based on timeliness and appeal.
“Our clients run the gamut from business owners and entrepreneurs to philanthropists and art collectors,” said Darin Oduyoye, chief communications officer of J.P. Morgan Asset and Wealth Management, who has spearheaded the list since its founding. “There are books to match up to each of those groups.”
Clients get an elegant J.P. Morgan-branded box with a book or two from the list, recommended specifically by their client advisor. The advisor also includes a handwritten note and a commemorative bookmark.
The list helps advisors connect with clients during the slow summer months. It also helps with client events, since authors on the list often agree to do special dinners or speaking events for J.P. Morgan clients.

Authors love being on the list as well since J.P. Morgan buys thousands of books to hand out and since clients often refer the books to others.
“The list is something that both clients and colleagues, and our communities, look forward to,” Oduyoye said.
This year’s 25th anniversary edition features a special “Anniversary Spotlight” highlighting Water.org, the charity founded by Gary White and Matt Damon, and their book “The Worth of Water.”
Here is J.P. Morgan’s 25th Annual Summer Reading List, along with summaries of the books, provided by the bank:
“Supercommunicators: How to Unlock the Secret Language of Connection” by Charles Duhigg
Sharing the latest research on what makes conversations effective, Charles Duhigg reveals how we can level up our communications and make stronger connections. Whether it’s a divided jury room or the way a CIA officer recruits a foreign agent, Duhigg uses examples to illustrate how we can deliver effective messages by recognizing and tapping into the three layers of every conversation—practical, emotional and social. Taking us from the writers’ room of one of television’s most successful sitcoms to the couches of in-demand marriage counselors, Duhigg shows us that we all have supercommunicators inside of us.
“The Anxious Generation: How the Great Rewiring of Childhood Is Causing an Epidemic of Mental Illness” by Jonathan Haidt
Social psychologist Jonathan Haidt lays out urgent facts—and issues a clear call to action—to focus attention on the global epidemic of teen mental illness. Haidt identifies the pervasive use of smartphones and over a dozen other mechanisms as having contributed to the “great rewiring of childhood.” Arguing that these technologies have had a profound negative effect on children’s social and neurological development, he explores what can be done to reverse the significant rise in sleep deprivation, fragmented attention, loneliness, addiction and social comparison. Importantly, Haidt calls for collective action and outlines steps that we all must take to end this epidemic.
“Giants: Art from the Dean Collection of Swizz Beatz and Alicia Keys” published by Phaidon
Celebrating selections from the world-class art collection of musical and cultural icons Alicia Keys and Swizz Beatz (Kasseem Dean), “Giants” highlights 100 works by nearly 40 multigenerational Black American, African and African diasporic artists. Curated by the Brooklyn Museum for its first-ever major exhibition, the Dean Collection features works by legendary—as well as emerging—artists including Gordon Parks, Jean-Michel Basquiat, Lorna Simpson, Odili Donald Odita and Kennedy Yanko. “Giants” also includes exclusive conversations between Swizz Beatz, Alicia Keys and curator Kimberli Gant, in addition to interviews with 10 of the renowned artists featured.
“Brave New Words: How AI Will Revolutionize Education (and Why That’s a Good Thing)” by Salman Khan
Salman Khan, the visionary behind the nonprofit Khan Academy, explores how artificial intelligence (AI) is set to transform learning both in education and the workplace. Demonstrating how AI will not replace human interaction but rather enhance it with tools to encourage creativity and problem solving, he shows how AI can adapt to each student’s individual pace while identifying strengths and areas of improvement. Outlining how emerging technologies can create a more accessible education system, Khan offers practical implications for administrators, counselors and hiring managers, as well as thoughtful insights on how we all can use AI in an increasingly digital world.
“Love & Whiskey: The Remarkable True Story of Jack Daniel, His Master Distiller Nearest Green, and the Improbable Rise of Uncle Nearest” by Fawn Weaver
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The parent companies behind TJ Maxx and Ross Dress for Less are continuing to grow sales as inflation-weary consumers hunt for deals and become more comfortable with shopping at discounters.
The two retailers beat quarterly revenue and earnings expectations and are poised to keep growing, even against tough comparisons.
Analysts say the sector wins in any economic environment because it offers household, brand names at a better price.

A T.J. Maxx store in Pasadena, California.
Mario Anzuoni | Reuters

Off-price retailers like TJX Companies and Ross are still posting sales gains and taking market share from rivals, but it’s not just because consumers are under pressure and hunting for value. 
Persistent inflation and rising prices for essentials like food and gas have pushed shoppers to trade department stores like Macy’s and Kohl’s for discounters like TJ Maxx and Ross. But they’ve also become cooler places to shop, particularly among younger consumers, and their assortments have gotten better because brands increasingly view them as a growth channel as department stores continue to shrink and lose share. 

“They have trusted brands at a cheaper price. They’re more on-trend, they’re designer-led, they lean into categories that the customer is much more interested in,” said Jessica Ramirez, a senior research analyst with Jane Hali & Associates. “In terms of categories that maybe are not resonating as well, they pull back from them and they have that ability because of their … strategy. A department store doesn’t have that.”
TJX and Ross both reported fiscal first quarter earnings last week that came in better than Wall Street expected, even as both companies lapped outsize growth from the prior-year period. 
TJX, which runs brands like TJ Maxx, Marshalls and Homegoods, saw sales grow 6% to $12.48 billion, compared to estimates of $12.46 billion, according to LSEG. That’s on top of the 3% sales increase the retailer saw in the prior-year period. 
Ross, which runs Ross Dress for Less and dd’s Discounts, posted an 8% jump in sales, bringing revenue to $4.86 billion, compared to estimates of $4.83 billion, according to LSEG. That’s on top of the 3.7% gain it posted in the prior-year period. 
Both companies have grown substantially since 2019 and posted banner results throughout 2023.

The particularly strong performance last year led some Wall Street analysts to wonder if they’d be able to continue to grow sales up against tougher comparisons. They’ve managed to do just that – and the party isn’t expected to end anytime soon. 

Consumers are still prioritizing value 

As consumers contend with persistent inflation, rising debt and stubbornly high interest rates, they’ve been more selective about where they’re spending their precious discretionary dollars. Value has been top of mind. 
“We think that the off-price sector is still healthy and we think that results this quarter, both for [TJX] and Ross, are showing consistent traffic-driven comp increases, which indicate that the consumer is still looking for value and the consumer still finds off price’s business model of branded goods at value prices as an attractive buying opportunity,” Goldman Sachs analyst Brooke Roach told CNBC. She said she expects both companies to continue to grow this year, on top of the sales increases they saw last year.
The low-to-middle income consumer has been feeling the burn a bit more acutely than their higher income counterparts, but even shoppers with deeper wallets have been turning to discounters for not just necessities, but also discretionary items. 
During a call with analysts on Wednesday morning, TJX’s finance chief John Klinger said the company is seeing comparable sales increase in areas where the average household income is both above and below $100,000 – a theme the retailer has seen consistently over the last year. 
Ross’s Chief Operating Officer Michael Hartshorn said the company is also continuing to attract a broad array of consumers across a variety of income levels. 
Even discounters like Walmart and Dollar Tree are making gains with high-income consumers. On May 16, Walmart beat quarterly earnings and revenue expectations in part because of the work it’s done to win over more high-income shoppers. Earlier this year, Dollar Tree said its fastest growing demographic makes more than $125,000 annually. 

‘We’ve become a cooler place to shop’ 

The consumer’s flight to value has undoubtedly helped TJX and Ross boost sales over the last year, but both companies have steadily grown over time and tend to do well in any economic cycle. 
“That’s because they’re providing consistent value to the consumer – and that’s branded consistent value to the consumer at a discount price,” said Roach. “So if you look, historically, in times of economic strength, these businesses were still market share gainers. We see no reason why that should change.” 
Simeon Siegel, a retail analyst for BMO Capital Markets, said off-price has managed to grow steadily in part because consumers are starting to see the stores in a different light.
“We need to also recognize that [TJX] convinced shoppers that they were fashionistas, not penny pinchers, and I think that was a very powerful and probably healthy shift in mindset,” said Siegel. “They took something that was embarrassing and turned it into a badge of honor. They took a transaction, turned it into an experience. It was no longer find something and hide it and wear it as if you bought it full price. Instead it became acceptable and exciting.” 
Siegel said the growth in off-price says just as much about consumer psyche and health as it does about this change in perception.
During TJX’s earnings call, CEO Ernie Herrman said the company has “become a cooler place to shop” and has made major inroads with the young Gen Z customer. 
“We are the only retailer right now that I see that is able to take brands and fashion and quality and put all of that together in this treasure hunt format,” said Herrman. 
The dynamic is a bit different at Ross, which has more exposure to the lower- and middle-income consumer than TJX does and competes more on price, said Siegel. During the first fiscal quarter, TJX’s growth was “entirely driven by customer transactions,” which means more people were shopping there. Ross cited higher average selling prices, offset by fewer units per transaction. 

Brands’ best kept secret 

In the past, the off-price sector was seen as a place for brands to offload last season’s inventory, or items that didn’t pass quality control tests. These days, the chains have become a destination for companies looking to grow wholesale revenue, even if they’re not broadcasting it. 
“Companies will continue to talk about [putting fewer of] their products in the off-price channel at the same time that they may very well be sending orders straight to them,” said Siegel.
The aisles at off-price retailers aren’t filled with private label junk, but instead, the kinds of household names that consumers know and love like Nike, Adidas, Michael Kors and Ralph Lauren. 
For a while, many of those big names tried to cut the number of items they were selling in the off-price channel — and through wholesalers overall — so they could grow sales in their own websites and stores. But many brands are starting to retreat from that strategy and are increasingly seeing the value that wholesale partners of all varieties can offer. 
“If you’re a large brand, you’re watching department stores give up share and you realize that [direct-to-consumer] is no longer the Holy Grail that you thought it once was, there are shrinking places to sell a lot of units,” said Siegel. “And if you’re a large brand, you need to sell a lot of units.” 
As brands have seen consumers change how they view off-price stores, they’re more willing to sell to chains like TJX and Ross, especially because they can do so “invisibly,” said Siegel. 
Department stores like Macy’s, for example, have a massive online presence and regularly blast out promotions on name brand items, which can have a dilutive effect on brand equity. In comparison, the bulk of TJX’s and Ross’s business is done in stores, so the markdowns aren’t as obvious or visible. 
“As off-price becomes a bigger part of the U.S. apparel ecosystem, we’ve seen that off-price has become more important to brands across the apparel and accessories sector,” said Roach. “[TJX] specifically has talked about strengthening relationships and the ability to be better partners with those brands, and that they are an attractive partner because they are growing and those brands can grow with them.” 
The CEOs of both TJX and Ross talked about their strong vendor relationships and how they’re getting access to better products at scale. 
“At a high level, the merchants improved the value offerings that they had, whether it’s different assortments, broader assortments, better quality, better products. So I think we’ve taken our first step forward there,” said Ross CEO Barbara Rentler. “We feel like there’s room for us to improve and if we continue to improve, even this low-income customer, if we can satisfy her, we should do fine.” 
TJX’s CEO put it a bit more bluntly. 
“More and more vendors, they have even more reasons to want to sell us versus others because their goods in our store now hang with the best,” said Herrman. “They’re dealing with a buying team that’s very straightforward and a company that has cash and will be paying.”  More