Business

Ford is launching a new training platform for its franchised dealers on Wednesday that uses artificial intelligence for employee coaching evaluations and emulates Netflix and YouTube interfaces.
Ford says the goals of the new “Ford University” program are to improve customer service, better engage employees and provide dealers and the company with more data to assist business.
Automakers have long touted the idea that better dealer experiences lead to happier customers who are more likely to become repeat customers.

Ford Mustang on display at the NY Auto Show, April 6, 2023.
Scott Mlyn | CNBC

DEARBORN, Mich. — Ford Motor is launching a new training program for more than 3,000 U.S. franchised dealers on Wednesday that uses artificial intelligence for employee coaching evaluations and emulates Netflix and YouTube interfaces more than the automaker’s traditional training courses.
Ford says the main goals of the “Ford University” platform are to improve customer service, better engage employees — especially younger ones who are accustomed to binge-watching videos — and provide dealers and the company with more data to assist business.

“This will help make sure that we’re actually creating a training that can be most impactful and is actually going to drive in a measurable way the skills of the individual employees,” Abby Vietor, global director of dealer training and productivity, said during a media briefing. “This is data that we’ve not had to date. So, this is a rich area for us.”
Vietor, who joined Ford in March 2023 after leading global games learning for Amazon Web Services, will oversee Ford University. She declined to disclose how much the company has spent on the new training.
Dealership employees, who are independently employed by dealers, are crucial to the company’s sales, performance and customer engagement and satisfaction. Automakers have long touted the idea that better dealer experiences lead to happier customers who are more likely to become repeat customers.

Abby Vietor, Ford global director of dealer training and productivity and head of Ford University.

Such employees also are viewed as critical to educate mainstream consumers on electrified vehicles, including all-electric models.
The platform, including mobile versions, is the most significant change in Ford’s dealership employee training since it switched from physical handbooks to digital ones in the early 2000s, according to Ford archivist Ted Ryan.

Ford University also includes more traditional, print-based training resources, company officials said. But word-based training will be phased out and replaced with a mix of modules, including “AI supported missions, video and learning tools,” according to Ford.

EV education

The new training heavily relies on videos rather than written words for employee education as well as “gamification,” or game-like learning, to assist in engagement and retention.
“It much more fits today’s society and the way people learn today,” said Peter Battle, a corporate coach and veteran dealer general manager of Pat Milliken Ford in Michigan. “They don’t learn by opening an owner’s manual and reading what their car does.”

An example of videos on Ford University’s platform, inspired by streaming services.

Many of the new Ford University videos available at launch are focused on electrified vehicles, including all-electric models such as the Ford F-150 Lightning and Mustang Mach-E. There also will be general topics such as education about EV charging and installation.
Lack of understanding around EVs is one of several problems identified by automakers that’s contributing to the slower-than-expected adoption of the vehicles. Cost and infrastructure also play a role.
“EV is definitely a part of our focus for the training that will be available,” Vietor said. “It’s an area where the customer conversation is evolving and changing. We want to make sure all the employees are prepared to speak to it.”

AI

Ford University will use AI coaching designed to improve employee knowledge and communication skills — a new AI tool as automakers experiment with best use cases for the emerging technology.
For example, employees could have a practice conversation with the AI or be asked to submit a video describing themselves, their position and certain key facts about a product.
The AI tool would then evaluate the employee on their enthusiasm, mannerisms and knowledge, among other potential targets. Based on those results, as well as viewing history and specific areas for improvement, the platform could then suggest additional videos or information for the employee — much like Netflix and other streaming services do after a viewer watches a program.
“We’re going to be able to scale this for everyone with AI,” said Kathy Munoz, Ford manager of dealer training and productivity. “The whole point of the platform is practice, practice, practice.”
The AI was developed by Ford using generative pre-trained transformers, or GPT, and Microsoft’s Azure Copilot.
Ford University will first be rolled out for front-of-house employees such as salespeople, but is eventually expected to expand to service workers and other more technical departments. More

Yum Brands’ quarterly earnings and revenue missed Wall Street’s estimates.
KFC and Pizza Hut reported same-store sales declines, while Taco Bell’s same-store sales rose just 1%.
Yum said its digital sales accounted for more than 50% of sales for the first time.

A Pizza Hut store is seen on November 01, 2023 in Austin, Texas.
Brandon Bell | Getty Images

Yum Brands on Wednesday reported quarterly earnings and revenue that missed analysts’ expectations as Pizza Hut and KFC struggled to attract customers.
Shares of the company fell more than 4% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: $1.15 adjusted vs. $1.20 expected
Revenue: $1.6 billion vs. $1.71 billion expected

Yum reported first-quarter net income of $314 million, or $1.10 per share, up from $300 million, or $1.05 per share, a year earlier.
Excluding investment losses and other items, the company earned $1.15 per share.
Net sales dropped 3% to $1.6 billion. Yum’s global same-store sales also fell 3% in the quarter, missing StreetAccount estimates of 0.2% same-store sales growth.
Across Yum’s three largest brands, only Taco Bell reported same-store sales growth. The metric rose 1% during the quarter at the Mexican-inspired chain. Taco Bell’s U.S. locations reported same-store sales growth of 2%, while its international business posted a decline of 2%.

KFC’s same-store sales fell 2% in the quarter. The bigger decline came in the U.S., where they shrank 7%. However, the chicken chain’s international division saw same-store sales decrease just 2%, thanks to growth in China, its largest market. A year ago, KFC’s quarterly same-store sales rose 9%.
Pizza Hut reported same-store sales dropped 7%, as demand lagged both in its home market and internationally. The pizza chain’s U.S. restaurants reported a decrease of 6%, while its international division posted an 8% decline. The chain faced tough comparisons to the year-ago period, when Pizza Hut reported 7% same-store sales growth, fueled by its new Melts.
The company’s digital business was one of the few bright spots this quarter. Yum said its digital sales accounted for more than 50% of sales for the first time.
Yum’s global footprint grew 6% in the quarter, thanks to 808 new restaurant openings. More

Starbucks on Tuesday reported weaker-than-expected quarterly earnings and revenue, fueled by a surprise decline in same-store sales.
The coffee chain also slashed its forecast for its fiscal 2024 earnings and revenue, predicting that its cafes would keep underperforming for several quarters.
Across all regions, Starbucks reported shrinking same-store sales and falling traffic.

A Starbucks coffee shop in Amsterdam.
Nicolas Economou | Nurphoto | Getty Images

Starbucks on Tuesday reported weaker-than-expected quarterly earnings and revenue, fueled by a surprise decline in same-store sales.
The coffee chain also slashed its forecast for its fiscal 2024 earnings and revenue, predicting that its cafes would keep underperforming for several quarters.

Shares of the company fell 12% in extended trading.
“In a highly challenged environment, this quarter’s results do not reflect the power of our brand, our capabilities or the opportunities ahead,” CEO Laxman Narasimhan said in a statement. “It did not meet our expectations, but we understand the specific challenges and opportunities immediately in front of us.”
The company’s same-store sales fell 4% as traffic to its cafes declined 6% in the quarter. Wall Street was anticipating same-store sales growth of 1%, according to StreetAccount estimates.
Across all regions, Starbucks reported shrinking same-store sales and falling traffic.
In the U.S., same-store sales decreased 3% as traffic sank 7%. This marks the second quarter that the company’s home market has struggled. Last quarter, executives blamed sluggish sales on boycotts targeting the company due to “misperceptions” of its stance on Israel.

Starbucks’ international segment reported same-store sales declines of 6% as both average ticket and transactions dropped. In China, Starbucks’ second-largest market, same-store sales plunged 11%, fueled by an 8% decline in average ticket.
“In this environment, many customers have been more exacting about where and how they choose to spend their money,” Narasimhan told analysts on the company’s conference call.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: 68 cents adjusted vs. 79 cents expected
Revenue: $8.56 billion vs. $9.13 billion expected

The coffee giant reported fiscal second-quarter net income attributable to the company of $772.4 million, or 68 cents per share, down from $908.3 million, or 79 cents per share, a year earlier.
Net sales dropped nearly 2% to $8.56 billion.
For fiscal 2024, Starbucks now expects revenue growth in the low single digits, down from its prior forecast of 7% to 10%. The company also revised its projections for global and U.S. same-store sales growth to a range of low single digits to flat from its previous forecast of 4% to 6%. Same-store sales in China are expected to decline by single digits, down from the prior outlook of a single-digit increase.
Starbucks now also expects earnings per share growth in a range of flat to low single digits. It previously forecast its earnings would climb 15% to 20% in fiscal 2024.
The company forecasts that sales will start improving in the fiscal fourth quarter.

Waning sales

Starbucks’ most dedicated customers have stayed loyal and been using discounts offered via the company’s mobile app, executives said. But coffee drinkers who visit only occasionally have been buying Starbucks’ macchiatos and cold brew less often, executives said; Narasimhan said those customers want more variety from their coffee.
Starbucks is planning to offer a version of its app that allows customers to order without being a loyalty member in order to attract these occasional customers to visit more frequently.
Narasimhan said Starbucks is also exploring how to meet overnight demand, from 5 p.m. to 5 a.m. The company conducted a pilot test, which Narasimhan said doubled business.
He also said the chain’s lavender drinks were one of its most successful launches.
“Building off that success, we are aggressively pursuing options to build a $2 billion business over the next five years,” he said.
McDonald’s, PepsiCo and other companies have said this quarter that low-income consumers have pulled back their spending and are looking for deals.
“While it was a difficult quarter, we learned from our own underperformance and sharpened our focus with a comprehensive roadmap of well thought out actions making the path forward clear,” CFO Rachel Ruggeri said in a statement.
Narasimhan also said that the company now expects supply-chain cost savings of $4 billion over the next four years, revising its prior forecast of $3 billion over three years.

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BETWEEN 2021 and 2023 two parts of the drugmaking business were in contrasting states of health. An index of American big pharma rose by a third, outperforming the broader stockmarket thanks to robust sales of blockbuster drugs. One made up of smaller biotechnology companies sank by roughly as much, weighed down by rising interest rates and dissipating pandemic-era euphoria for all things medical. Unlisted biotech startups have, like most young firms, struggled to attract capital. Last year they drew just $17bn in investments, down from $37bn two years earlier. Fewer went public and more went bust.This year the giants are still going strong. On April 30th Eli Lilly, maker of a hit weight-loss treatment, delivered another dose of strong quarterly results. On May 2nd Novo Nordisk, a Danish rival with its own anti-obesity drug, is expected to do the same. Together the two are worth $1.2trn, up from $350bn three years ago. But biotech’s vitals, too, are improving. That is good news for investors, patients and the pharmaceutical industry as a whole. More

CNBC spoke with composer John Tesh about the mechanics of how NBC could buy the rights to “Roundball Rock,” the iconic theme song from its 1990-2002 era “NBA on NBC,” if it airs NBA games again.
NBCUniversal is bidding against Warner Bros. Discovery for a package of games, sources said.
Fox has been using “Roundball Rock” for its college basketball games since the 2018-19 season, but the deal doesn’t preclude the song from being used by NBC for NBA games, Tesh said.

Michael Jordan #23 and Scottie Pippen #33
Nathaniel S. Butler

In the pantheon of theme songs for TV sports, “Roundball Rock,” John Tesh’s anthem that accompanied National Basketball Association games on NBC until 2002, is arguably the greatest.
If NBCUniversal wins the rights to air the NBA again, it would have a chance to bring back the iconic tune, the composer told CNBC in an email.

Comcast’s NBCUniversal has made an offer that averages $2.5 billion per year to once again acquire NBA rights after losing them 22 years ago to Disney, according to people familiar with the matter. The Wall Street Journal first reported the details of NBC’s bid.
The NBA wants three media partners this time around, and is close to deals with both Disney and Amazon for two of the packages. The third one will likely go to Warner Bros. Discovery or NBCUniversal, but not both, said the people, who asked not to be named because the talks are private.
Warner Bros. Discovery continues to be in talks with the league to keep the rights. Still, NBCUniversal’s offer more than doubles the $1.2 billion that Warner Bros. Discovery currently pays. That may be too pricey for Warner Bros. Discovery, whose market capitalization of $18 billion is dwarfed by Comcast’s $150 billion.
Warner Bros. Discovery Chief Executive Officer David Zaslav has preached a message of financial discipline since taking over the company, including by slashing jobs and cutting spending on content, to reduce debt and boost free cash flow. He’s said he’s not interested in being in the “rental business,” as is the nature of licensing sports rights, though he has also expressed optimism about retaining NBA rights.
Spokespeople for Warner Bros. Discovery, NBC and the NBA declined to comment.

The rights to ‘Roundball’

Nostalgic NBA fans associate “Roundball Rock” with “The NBA on NBC” and an era defined by Michael Jordan, the Chicago Bulls’ dominance and the voices of Bob Costas and Marv Albert. USA Today voted it No. 1 in a 2017 ranking of “The 25 greatest sports TV themes.” The Ringer published an oral history article about its origin, and NBC’s “Saturday Night Live” did an entire sketch about it.

The song has not heralded the start of an NBA game since 2002, when NBC broadcast its last league contest. Fox Sports acquired the rights to the theme to use for college basketball for the 2018-19 season, but a generation of fans still associate the tune with NBC.
If NBC Sports wins the rights, it’s free to once again license “Roundball Rock” from Tesh, who owns the song, the composer said in an e-mail.

TV Personality John Tesh visits Hallmark Channel’s “Home & Family” at Universal Studios Hollywood on March 06, 2020 in Universal City, California.
Paul Archuleta | Getty Images

Fox’s deal for “Roundball Rock” doesn’t preclude any media company from using the song for NBA games, Tesh said.
Media companies typically buy the rights to the song in three-year increments, Tesh said. He declined to say how much he is paid because the contracts include non-disclosure agreements, but Tesh noted he’s also compensated with royalties based on the number of times it gets played. The Ringer reported in 2020 that Tesh’s jingle aired an estimated 12,000 times during the 1990-2002 era on “NBA on NBC.”
“It’s funny how people fight for the song,” Tesh said. “In 1990, it was just another theme. Now the internet is filled with people playing the song on Ukulele, Casios and teaching it on guitar. We still play the song at every concert and show the YouTube videos of these people.”
If the NBA airs on NBC again, it would start in the 2025-26 season. And rest assured, fans: “Roundball Rock” is available.
— CNBC’s Lillian Rizzo contributed to this report.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC.
WATCH: Fight for the NBA: NBC vs. Warner Bros. Discovery

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The Federal Trade Commission said it is challenging hundreds of alleged “junk” patents held by pharmaceutical companies for 20 brand-name drugs, including Novo Nordisk’s blockbuster drugs Ozempic and Saxenda. 
The FTC has argued that drugmakers are needlessly listing dozens of extra patents for branded medications to keep their drug prices high and stall generic competitors from entering the U.S. market. 
The agency sent letters to Novo Nordisk, AstraZeneca, Boehringer Ingelheim, Covis Pharma, GlaxoSmithKline, Novartis and Teva Pharmaceuticals, among other pharmaceutical companies.

A box of Ozempic and contents sit on a table in Dudley, North Tyneside, Britain, October 31, 2023. 
Lee Smith | Reuters

The Federal Trade Commission on Tuesday said it is challenging hundreds of alleged “junk” patents held by pharmaceutical companies for 20 brand-name drugs, including Novo Nordisk’s blockbuster drugs Ozempic, Saxenda and Victoza.
The FTC issued letters to 10 companies, warning them that certain drug patents were improperly listed. These companies include Novo Nordisk, AstraZeneca, Boehringer Ingelheim, Covis Pharma, GlaxoSmithKline, Novartis, Teva Pharmaceuticals and Amphastar Pharmaceuticals, as well as some of their subsidiaries. 

Many of the drug patents are for Type 2 diabetes, along with asthma and inhalers for chronic obstructive pulmonary disease, or COPD. 
Most top-selling medications are protected by dozens of patents covering various ingredients, manufacturing processes, and intellectual property. Generic drugmakers can only launch cheaper versions of a branded drug if the patents have expired or are successfully challenged in court.
“By filing bogus patent listings, pharma companies block competition and inflate the cost of prescription drugs, forcing Americans to pay sky-high prices for medicines they rely on,” FTC Chair Lina Khan said in a release. “By challenging junk patent filings, the FTC is fighting these illegal tactics and making sure that Americans can get timely access to innovative and affordable versions of the medicines they need.”
The FTC also notified the Food and Drug Administration about the challenges. The FDA manages patent listings for approved drugs on a document called the Orange Book.
The FTC first challenged dozens of branded drug patents last fall, leading three drugmakers to comply and delist their patents with the FDA. Five other companies did not. 

The Tuesday announcement expands the Biden administration’s effort to crack down on alleged patent abuses by the pharmaceutical industry. The FTC has argued that drugmakers are needlessly listing dozens of extra patents for branded medications to keep their drug prices high and stall generic competitors from entering the U.S. market. 
The patent disputes add to a broader effort by the Biden administration to make health care more affordable for Americans – a key pillar of President Joe Biden’s 2024 reelection campaign. 
“We applaud the FTC’s work with FDA to crack down on Big Pharma’s patent games and lower costs for prescription drugs—including weight loss and diabetes drugs,” Jon Donenberg, National Economic Council deputy director, said in a statement to CNBC.

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Home prices in February jumped 6.4% year over year, according to the S&P CoreLogic Case-Shiller national home price index.
It marked another increase after the prior month’s annual gain of 6%, and the fastest rate of price growth since November 2022.
Prices in San Diego saw the biggest rise among the 20 cities in the index, up 11.4% from February of 2023. Both Chicago and Detroit reported 8.9% annual increases.

A Redfin sign in front of a home for sale in Atlanta, Georgia, on Sunday, Nov. 13, 2022.
Elijah Nouvelage | Bloomberg | Getty Images

Strong demand and tight supply continue to push home values higher, even though mortgage rates are now moving higher again.
Home prices in February jumped 6.4% year over year, another increase after the prior month’s annual gain of 6%, according to the S&P CoreLogic Case-Shiller national home price index. It was the fastest rate of price growth since November 2022.

The 10-city composite rose 8%, up from a 7.4% increase in the previous month. The 20-city composite saw an annual gain of 7.3%, up from a 6.6% advance in January.
“Following last year’s decline, U.S. home prices are at or near all-time highs,” said Brian Luke, head of commodities, real and digital assets at S&P Dow Jones Indices. “For the third consecutive month, all cities reported increases in annual prices, with four currently at all-time highs: San Diego, Los Angeles, Washington, D.C., and New York.”
Prices in San Diego saw the biggest gain among the 20 cities in the index, up 11.4% from February of 2023. Both Chicago and Detroit reported 8.9% annual increases. Portland, Oregon, saw the smallest gain in the index of just 2.2%.
“The Northeast region, which includes Boston, New York, and Washington, D.C., ranks as the best performing market for over the last half year. As remote work benefitted smaller (and sunnier markets) in the first part of the decade, return to office may be contributing to outperformance in larger metropolitan markets in the Northeast,” according to Luke.
“Since the previous peak in prices in 2022, this marks the second time home prices have pushed higher in the face of economic uncertainty. The first decline followed the start of the Federal Reserve’s hiking cycle. The second decline followed the peak in average mortgage rates last October,” he added.

This index records prices on a three-month moving average, so they go back as far as December, when mortgage rates hit their recent lows. There was also a strong expectation then that the Federal Reserve would lower interest rates. That may have driven buyers to jump in.
Since that time, however, mortgage rates have jumped nearly a full percentage point. In addition, stubborn and persistent inflation has lowered expectations that the Fed will cut rates significantly this year.

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McDonald’s missed quarterly earnings estimates as same-store sales fell short of expectations.
Boycotts over the conflict in Gaza weighed on the chain’s Middle East sales again.
Higher prices have helped McDonald’s revenue, but scared away some low-income customers.

McDonald’s french fries
Picture Alliance | Picture Alliance | Getty Images

McDonald’s reported mixed quarterly results Tuesday as its reorganization weighed on its profit and boycotts hurt its Middle Eastern sales.
The company also continues to see consumers worldwide pull back on their restaurant spending.

“Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending, which is putting pressure on the [quick-service restaurant] industry,” CEO Chris Kempczinski said on the company’s conference call.
He added that McDonald’s has to be “laser focused” on affordability to attract diners.
Shares of McDonald’s fell more than 3% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: $2.70 adjusted vs. $2.72 expected
Revenue: $6.17 billion vs. $6.16 billion expected

McDonald’s reported first-quarter net income of $1.93 billion, or $2.66 per share, up from $1.8 billion, or $2.45 per share, a year earlier. The company recorded a pretax charge of $35 million tied to its reorganization, which was announced more than a year ago.

Excluding restructuring charges, the fast-food giant earned $2.70 per share.
Net sales rose 5% to $6.17 billion. The company’s global same-store sales increased 1.9% in the quarter, falling short of StreetAccount estimates of 2.1%.
McDonald’s reported U.S. same-store sales growth of 2.5%, missing expectations of 2.6%. The chain said that the average check grew thanks to higher menu prices. But by raising prices, McDonald’s has also scared away some of its low-income customers.
Kempczinski said the company is working on a national value deal in the U.S. While the strategy could attract more customers, franchisees may push back because those promotions can cut into their profits.
“Our U.S. leadership team is working really closely with our owner-operators,” CFO Ian Borden said.
Additionally, the chain has rolled out an improved version of its burgers nationwide, with advertising featuring its Hamburglar mascot, as it tries to convince customers that its prices are worth it. The company’s chefs have also been working on a larger burger, which it plans to test in several markets later this year before a global launch.
A month into the second quarter, McDonald’s U.S. same-store sales are roughly flat, executives said.
Demand in the company’s international developmental licensed markets was even weaker. McDonald’s said the segment’s same-store sales fell 0.2%, marking the first time since the pandemic that one of the chain’s divisions reported a same-store sales decline.
The segment includes restaurants in the Middle East, which have been roiled by the Israel-Hamas war and related boycotts, which started after McDonald’s Israeli licensee offered discounts to soldiers. Earlier this month, McDonald’s bought the 225 restaurants operated by its Israeli franchisee.
However, the company said that same-stores sales in other licensed markets, like Japan and Latin America, grew for the quarter. McDonald’s international operated markets segment, which includes Germany and the United Kingdom, reported same-store sales growth of 2.7%. France’s same-store sales declined in the quarter.

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