Business

Target is launching a paid membership program, Target Circle 360.
The retailer is following the playbook of competitors Amazon and Walmart, which have already turned subscription services into money makers and sales drivers.

A Target store in New York, US, on Monday, March 4, 2024. 
Shelby Knowles | Bloomberg | Getty Images

Target on Tuesday said it will launch a paid membership program next month, riffing off the playbook of its rivals Amazon and Walmart.
The subscription-based program, Target Circle 360, will launch in early April and cost $99 per year. Target will offer a discounted rate of $49 per year as part of a promotion from its launch through May 18, then continue to offer the lower price to its credit card holders after that. The program will include unlimited free same-day delivery for orders over $35 in as little as one hour with no delivery fees and two free-day shipping, along with other perks.

Target is turning to the new revenue stream as it tries to boost weaker sales. Its fiscal fourth-quarter earnings and revenue reported Tuesday beat Wall Street’s expectations, but its comparable sales have declined three quarters in a row. Target shares jumped 12% on Tuesday as the retailer showed progress in improving profits and unveiled the subscription.
With the move, the company is also following in the footsteps of retailers that have turned membership fees into a moneymaker and a sales driver. It is unclear how many people could sign up for the paid tier. The free Target Circle has more than 100 million members, according to the company.
In an interview with CNBC, CEO Brian Cornell said the paid membership program will encourage customers to place more online orders with Target. He said the company’s market research has shown that customers value delivery to their homes, even as they use curbside pickup more frequently.
“There’s a guest who’s looking for the ease and convenience of having something brought right to their home — in some cases, within an hour —and we just want to elevate the awareness that we can do that,” he said.
Home deliveries will be powered by Shipt, a membership-based company that Target acquired in 2017 for $550 million. Similar to other gig-economy companies like DoorDash, the business relies on independent contractors who retrieve purchases and get them to customers’ doors.

By taking away delivery fees, Target could use the membership program to rev up its e-commerce business. Digital sales have declined every quarter for the past year, and dropped 0.7% year over year in the fiscal fourth quarter.
Along with launching the paid membership program, Target is taking other steps to keep shoppers coming back. It is relaunching its free Target Circle loyalty program and credit card, Sylvester said. Target Circle, which debuted in 2019, will become easier to use and more personalized. For example, members who belong to the free program will have discounts automatically applied rather than having to scan through deals on the app, she said.
Target’s Circle card takes an extra 5% off customers’ purchases, includes free two-day shipping and allows extra time to make returns. The card was previously known as Target RedCard.
Sylvester said the company is looking at a wide range of potential benefits to sweeten the membership offer and increase subscriber numbers.
Target is turning to its competitors’ playbook for a reason: Memberships have boosted business for retailers like Amazon.
Amazon launched its Prime program in 2005, with perks like free two-day delivery and streaming of popular movies and original TV shows. It costs $139 per year or $14.99 per month, with the video membership-only option of $8.99 per month.
Amazon does not frequently share Prime membership totals. The company had more than 200 million members of Prime across the globe in early 2021, according to a final letter to shareholders written by former CEO Jeff Bezos.
Walmart launched its program, called Walmart+, in 2020. It costs $98 per year or $12.95 per month, with perks like free shipping, free grocery deliveries for orders of at least $35 and gas discounts.
Walmart has not said how many people subscribe to Walmart+, but its CFO, John David Rainey, said on the company’s earnings call in February that its membership continues to grow by double-digit percentages.
Walmart CEO Doug McMillon told investors on the company’s earnings call in February that Walmart+ members spend nearly twice as much as nonmembers and buy more over the course of a year.
Don’t miss these stories from CNBC PRO: More

Novo Nordisk’s blockbuster drug Ozempic cut the risk of kidney disease progression and related health complications in diabetic patients, according to initial late-stage trial results.
Ozempic specifically lowered the risk of kidney disease progression, major cardiac events and death by 24% in diabetic patients with chronic kidney disease compared to a placebo. 
The results add to the growing evidence that the highly popular injection has broader health benefits for patients beyond treating Type 2 diabetes.

This picture taken on October 23, 2023, shows Ozempic medication boxes, an injectable antidiabetic drug, in a pharmacy in Riedisheim in eastern France.
Sebastien Bozon | Afp | Getty Images

Novo Nordisk’s blockbuster drug Ozempic cut the risk of kidney disease progression and related health complications in diabetic patients, according to initial late-stage trial results released Tuesday. 
Ozempic specifically lowered the risk of kidney disease progression and death from kidney or cardiovascular complications by 24% in diabetic patients with chronic kidney disease compared to a placebo. 

The results add to the growing evidence that the highly popular injection and similar drugs for weight loss have broader health benefits for patients beyond treating Type 2 diabetes and helping them shed pounds. Those treatments skyrocketed in popularity over the past year despite their mixed insurance coverage and hefty price tags.
Novo Nordisk said it will present full data from the study later this year. The company also noted that it would file for an expanded approval of Ozempic based on the data in both the U.S. and Europe.
Chronic kidney disease would be a big additional treatment opportunity for Ozempic. Roughly 40% of people with diabetes also have the condition. The disease involves a gradual loss of kidney function.
Notably, the Danish company ended the trial in October, a year earlier than expected, in response to positive results.
The trial, called FLOW, first started in 2019 and followed roughly 3,500 patients with diabetes and moderate to severe chronic kidney disease.

The data comes as Novo Nordisk faces increased competition from Eli Lilly and tries to win expanded insurance coverage for its separate weight loss injection Wegovy.
Last year, a late-stage trial on Wegovy showed that it cut the risk of heart attacks and strokes by 20%. 
Clarification: This story was updated to reflect trial information Novo Nordisk clarified from an earlier press release.Don’t miss these stories from CNBC PRO: More

Delta said the airline will raise its checked bag fee by $5 beginning Tuesday.
It’s the latest airline to join the higher baggage fees trend, with American Airlines and United Airlines also announcing price increases in the past two weeks.
Delta said the move will help the company stay on pace with rising industry costs.

A Boeing 767 passenger aircraft of Delta Air Lines arrives from Dublin at JFK International Airport in New York as the Manhattan skyline looms in the background on Feb. 7, 2024.
Charly Triballeau | Afp | Getty Images

Delta Airlines just became the latest airline to raise its checked bag fee — this time by $5 beginning Tuesday, according to the company.
In a statement, the airline said the fee for both the first and second checked bag is increasing by $5 for most domestic and short-haul international routes. Travelers with Delta perks, such as Delta SkyMiles Medallion members and customers in first class, will continue to receive their allotment of complimentary bags, the airline added.

It will now cost travelers $35 for the first checked bag and $45 for the second checked bag. It’s the first Delta baggage price increase since 2018, which the company said will help it stay on pace with rising industry costs.
The move comes two weeks after American Airlines announced a price increase for its checked baggage. Shortly after that announcement, United Airlines said its checked baggage will cost more. JetBlue and Alaska Airlines have also raised prices this year.
Delta said the increased fee does not apply to tickets purchased before Tuesday.Don’t miss these stories from CNBC PRO: More

Dodge on Tuesday revealed the new Charger as an all-electric vehicle as well as a next-generation gas-powered muscle car.
Offering EV and gas-powered versions of the vehicle will allow Dodge to be more flexible when it comes to production, as sales of all-electric vehicles have been growing more slowly than expected.
The 2024 Charger EV, known as the Daytona, is expected to go on sale this summer and will be the first all-electric car from Dodge. The gas-powered models will follow in 2025.

2024 Dodge Charger Daytona Scat Pack EV

DETROIT — Dodge won’t abandon its traditional, gearhead, high-octane Charger and Challenger owners with its next-generation muscle car.
The automaker on Tuesday revealed the new Dodge Charger as an all-electric vehicle as well as a next-generation gas-powered muscle car. It will be the first all-electric car from Dodge.

The traditional car has been in question since late 2022, when Dodge said production of the longstanding Charger and Challenger would be discontinued at the end of last year. At that time, the company said an EV would replace them, declining to discuss the potential for future gas models.
Offering EV and gas-powered versions of the vehicle will allow Dodge to be more flexible when it comes to production, as sales of all-electric vehicles have been growing more slowly than expected. More gas- and electric-powered Chargers, including a “Banshee” EV, will follow the initial vehicles.

2024 Dodge Charger Daytona Scat Pack EV

Dodge CEO Tim Kuniskis called the EV a “game changer in the industry.” The new gas-powered models, meanwhile, will outperform their V-6 engine predecessors, as well as some of the V-8 variants.
“We’re taking the performance of the ‘golden age’ that you know today that you judge everything by and we’re taking the technology of the future to make sure [the Dodge brothers’] legacy doesn’t die,” Kuniskis said during a media briefing. “The Banshee is going to be our ultimate performer.”

Two- and four-door models

The 2024 Charger EV, known as the Daytona, is expected to go on sale this summer with up to 670 horsepower, 627 foot-pounds of peak torque and a 0-60 mph time of 3.3 seconds.

The two-door EV versions will be first, followed by four-door models during the first quarter of next year. The gas-powered Chargers with a new inline-six engine are expected to go on sale in 2025.

All models of the next-generation Charger will eventually come in two- and four-door variants to replace the four-door Dodge Charger and two-door Challenger.

Pricing for the EV and gas-powered models will be announced closer to their production, Kuniskis said. Current starting prices for the Charger and Challenger gas models range between roughly $33,000 and $96,000.
Both the EV and gas models will eventually come in two- and four-door variants to replace the four-door Dodge Charger and two-door Challenger. That change is expected to reduce parts and costs — following a mandate from Carlos Tavares, CEO of Stellantis, which owns Dodge, to his brand executives.
Dodge said all EV and gas models will share interior and exterior designs, which also should help with production complexity and lower costs.
When asked whether the EV will be profitable, Kuniskis reiterated comments made by Tavares that the company won’t sell electrified vehicles at a loss in order to boost sales or meet federal fuel economy standards.

2024 Dodge Charger Daytona Scat Pack EV

As many brands in recent years switched to smaller and more fuel-efficient engines, Dodge rolled out Hellcat models and other high-performance vehicles. Such models helped generate attention for the brand but didn’t help the automaker’s carbon footprint, forcing it to buy carbon credits from automakers such as Tesla.
Stellantis’ “Dare Forward 2030” strategic plan includes moving toward electrified and more efficient propulsion systems, cutting its global carbon footprint by 50% by 2030 and leading the transportation industry by achieving net carbon zero by 2038.
Kuniskis said there are no plans for V-8 or plug-in hybrid electric models for the new Charger, which will be produced at a Stellantis assembly plant in Windsor, Ontario, in Canada.

Dodge Charger Daytona

The Charger Daytona EV will initially be offered in “R/T” and “Scat Pack” models with 496 horsepower and 670 horsepower, respectively. The ranges on a full charge are expected to be 317 miles for the R/T and 260 miles for the Scat Pack, Dodge said.
A feature called “PowerShot” will be standard on Charger Daytona models, delivering an additional 40 horsepower for 15 seconds when activated.

Dodge CEO Tim Kuniskis unveils the Charger Daytona SRT electric muscle car concept on Aug. 17, 2022 in Pontiac, Mich.  
Michael Wayland / CNBC

“We are going to displace superchargers and replace them with kilowatts and PowerShots,” Kuniskis said.
The design of the new Charger is heavily based on a concept car Dodge revealed in August 2022. It is a modern, yet retro, version of the current Dodge Challenger with a more aerodynamic design that’s still muscular. Most notably, the front end features a large opening for air to pass through, which the company is calling an “R-Wing.”
Kuniskis said the concept car was the “production car hiding in plain sight” in an attempt to get customers used to the new design.
Dodge is still working on how the EV will sound, Kuniskis said. The goal is to attempt to retain the roaring sound and driving characteristics of Dodge’s current gas-powered Charger and Challenger.

The “Fratzog” logo on the “R-Wing” of the 2024 Dodge Charger Daytona Scat Pack EV.

While EVs can be fast, with a “linear acceleration” that produces astonishing 0-60 mph times, they often lack the driving dynamics that many performance car owners enjoy. It’s a problem auto executives have privately been attempting to solve as the industry transitions to EVs.
The gas-powered Charger will be powered by a 3.0-liter twin turbo “Hurricane” inline six-cylinder engine that powers other Stellantis vehicles such as the Jeep Wagoneer and Ram 1500.
The only difference in the EVs and gas vehicles could be the use of a “Fratzog” split deltoid logo for EVs rather than Dodge’s current dual racing stripes. Kuniskis said the company is still determining whether to use the Fratzog — a made-up word initially used by Dodge from 1962 through 1976 — for the gas models. More

A group of labor unions is ending its proxy fight at Starbucks, a person familiar with the matter told CNBC.
The two sides agreed last week to work toward a “foundational framework” on collective bargaining.
The labor group, the Strategic Organizing Center, argued that Starbucks had responded to a yearslong union push with a “flawed” strategy.

Steph Kronos, a pro-Union activist, tries to talk to Starbucks customers as she joins Starbucks workers, former employees, and supporters in holding signs in support of a strike, outside of a Starbucks store in Arlington, Virginia, on November 16, 2023.
Saul Loeb | AFP | Getty Images

A group of labor unions is ending its proxy fight at Starbucks, a person familiar with the matter told CNBC, after the two sides agreed last week to work toward a “foundational framework” on collective bargaining.
The labor group, the Strategic Organizing Center, argued that Starbucks had responded to a yearslong union push with a “flawed” strategy that diminished shareholder returns and presented reputational risk. The SOC said in its proxy filings that the company’s response to widespread unionization efforts had cost the company nearly $250 million.

It had put forth three nominees to Starbucks’ board of directors, which the SOC is now withdrawing, according to the person familiar.
The cessation comes after two influential proxy advisors, Institutional Shareholder Services and Glass Lewis, both recommended that shareholders vote for management board nominees.
The fight would have been unusual given the small size of the SOC’s economic interest and the composition of the group. It was the first time that a labor union — typically opposed to activist campaigns — had drawn on the activist toolkit.
The SOC hired well-respected communications, legal and proxy advisors who have worked on behalf of major activists and hedge funds. Together, they built a thesis that drew a line from slipshod bargaining tactics to weakened shareholder returns.
Reuters first reported that the SOC was ending its proxy fight.
Starbucks’ annual shareholder meeting is scheduled for March 13. More

The Consumer Financial Protection Bureau unveiled a new rule on Tuesday that it said would cap late fees that banks charge customers at $8 per incident.
The new rule, long expected after an initial proposal was floated last year, comes after a the agency said it reviewed market data related to the 2009 Card Act.
“For over a decade, credit card giants have been exploiting a loophole to harvest billions of dollars in junk fees from American consumers,” CFPB Director Rohit Chopra said in the release.

Rohit Chopra, director of the CFPB, testifies during the Senate Banking, Housing and Urban Affairs Committee hearing titled “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress,” in Dirksen Building on Thursday, November 30, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images

The Consumer Financial Protection Bureau unveiled a new rule on Tuesday that it said would cap late fees that banks charge customers at $8 per incident.
By cutting late fees to $8 from an average of around $32, more than 45 million card users would save an average of $220 annually, the CFPB said in a release.

The new rule, long expected after an initial proposal was floated last year, comes after the agency said it reviewed market data related to the 2009 Card Act. Regulations tied to that law granted issuers the ability to charge ever-increasing amounts of late fees.
“For over a decade, credit card giants have been exploiting a loophole to harvest billions of dollars in junk fees from American consumers,” CFPB Director Rohit Chopra said in the release. “Today’s rule ends the era of big credit card companies hiding behind the excuse of inflation when they hike fees on borrowers and boost their own bottom lines.”
This story is developing. Please check back for updates. More

Wilson tennis racket maker Amer Sports issued its first earnings report since its IPO, saying its losses narrowed in the fourth quarter.
The company, which also makes Louisville Slugger baseball bats, went public last month.

Amer Sports, (AS.N) parent company of sporting goods brands, banner hangs on the front of the New York Stock Exchange (NYSE) during the company’s IPO in New York City, U.S., February 1, 2024. 
Brendan McDermid | Reuters

Shares of Amer Sports, the maker of Wilson tennis rackets and Lousiville Slugger baseball bats, fell in premarket trading Tuesday even after the company said its holiday-quarter losses narrowed, driven by strong sales in China.
Here’s how the newly public athletic company did in its fourth fiscal quarter. CNBC didn’t compare the results to Wall Street estimates because it’s the first earnings report since Amer Sports went public.

Loss per share: 25 cents
Revenue: $1.32 billion

In the three months ended December 31, the company reported a net loss of $94.9 million, or 25 cents per share, compared with $148.3 million, or 39 cents per share, a year earlier. 
Sales rose to $1.32 billion, up about 10% from $1.2 billion a year earlier.
Shares fell more than 2% in pre-market trading.
Amer, which also owns Arc’teryx, Salomon and a number of other athletic equipment and apparel brands, operates in three distinct business segments. They are technical apparel, which includes its pricey Arc’teryx winter jackets, outdoor performance, such as Salomon’s winter sports equipment, and ball and racquet sports, which includes equipment and apparel from Wilson and Louisville, among others.  
The company started trading on the New York Stock Exchange last month under the ticker “AS.” Shares rose just 3% in Amer’s debut on the public markets after it priced its IPO at a discount. Sellers showed muted interest in the stock during its first day of trading over concerns about its connections and exposure to China and its debt-laden balance sheet. 

Founded in Helsinki in 1950, Amer was a Finnish public company until it was taken private in 2019 by a consortium of investors led by China’s ANTA Sports, FountainVest Partners, Anamered Investments and Tencent. 
Since the acquisition, sales grew about 45% from $2.45 billion in 2020 to $3.55 billion in 2022. Revenue jumped again in 2023 to $4.37 billion, the company said Tuesday.
Still, Amer failed to turn a profit between 2020 and 2023. In fiscal 2023, the company lost $208.8 million, but its losses narrowed from $230.9 million in fiscal 2022.
In a statement on Tuesday, Amer’s CEO James Zheng said the company is still in the “early stages” of its “profitable growth journey.”
“We are winning in the premium segment of the sports and outdoor market, which remains healthy and growing. Driven by our technical performance products, we believe Amer Sports’ brands resonate strongly with consumers everywhere, but are still relatively small players on the global stage,” said Zheng. “Looking forward, our confidence is enhanced by the fact that our highest margin brand, region, channel, and category are growing fastest.”
Much of its expansion has come in China. Between 2020 and 2022, Amer grew sales in the region from 8.3% of total revenue to 14.8%. In the nine months ended Sept. 30, nearly 20% of sales came from the region. But the growth also came during a time when China was reopening from the Covid pandemic and some retailers saw large spikes in demand that may not be sustained over time. 
That growth story continued during Amer’s fiscal fourth quarter. Sales in Greater China jumped by 45% and all three of the company’s segments saw “solid growth.”
Amer’s supply chain is also heavily exposed to the region. The majority of its products are sourced from suppliers “predominantly” in the Asia Pacific region, including China, according to a securities filing. 
Amer says it’s a global company with a diverse reach across a myriad of geographies, but those regions are growing at an uneven pace. In 2023, sales in Europe, the Middle East and Africa represented about 33% of total revenue, down from 36% in 2022. North America made up about 39.5% of sales in 2023, down from 42.4% of sales in 2022.
Conversely, China represented about 19% of sales in 2023, compared to 14.8% in 2022. Sales in Amer’s APAC region represented 8% of total revenue in 2023, up from 7% in 2022.
During the fourth quarter, sales in APAC grew by 22% and in North America, revenue only increased by a mid-single digit percentage. Strength in Amer’s direct channels lifted sales in the region, but that boost was offset by a slowdown in wholesale revenue.
For its fiscal first quarter, Amer expects reported revenue to grow between 6% and 8%, and it expects its adjusted gross margin to be around 53.5%. It anticipates earnings to range between a loss per share of 1 cent to earnings per share of 2 cents.
The company expects technical apparel revenue to grow about 30%, sales for its outdoor performance categories to be flat year over year and its ball and racquet segment sales to be down a double digit percentage.
For the full year, Amer expects sales to grow by a mid-teens percentage, and it anticipates an adjusted gross margin of between 53.5% and 54%. It is forecasting earnings per share between 30 cents and 40 cents.
Read the full earnings release here. More

Target forecast another year of lackluster sales as it reported better-than-expected holiday-quarter results.
The retailer said it will launch a new membership program.
Target grew profits from the year-ago quarter.

The Target logo is seen on its store on 42nd Street in Times Square, New York City.
Deb Cohn-Orbach | UCG | Universal Images Group | Getty Images

Target on Tuesday posted holiday-quarter revenue and earnings that topped Wall Street’s expectations, but the company said it expects another year of weak sales. 
The Minneapolis-based retailer’s shares jumped about 8% in premarket trading as it showed progress in boosting profits and margins.

Even so, Target’s comparable sales declined for the third quarter in a row. The key metric, which includes digital sales and takes out the impact of store openings, closures and renovations, fell 4.4% in the fiscal fourth quarter. 
Target doesn’t anticipate sales will bounce back quickly. For the current quarter, Target said it expects comparable sales to drop by between 3% and 5% and adjusted earnings per share to range from $1.70 to $2.10. The company said it expects full-year 2024 comparable sales to be flat to up 2% and adjusted earnings per share to range from $8.60 to $9.60.
Yet Target stressed its progress after a rough stretch marked by lower discretionary spending. Store and website traffic, while still down year over year, improved for the second quarter in a row. Profits jumped as the company better managed inventory and benefited from falling supply chain, freight and e-commerce fulfillment costs. And an emphasis on lower price points resonated with shoppers. 
In an interview with CNBC’s “Squawk Box,” CEO Brian Cornell said the company has made “really solid progress” in managing inventory better and becoming more efficient. He said the retailer will focus on “growing traffic and making sure that we make Target a growth company again.”
Those new sales drivers for the year ahead will include a membership program, he said. Cornell declined to share more details to CNBC, but said “it’s going to be a really important part of what drives growth for us as we go into next year.” He added that the company plans to emphasize same-day delivery to the home, so that customers can get groceries or other items within two hours. Target already owns Shipt, a membership-based delivery service.

Company leaders will share more of their strategy at an investor meeting in New York City on Tuesday.
Here’s what the retailer reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: $2.98 vs. $2.42 expected
Revenue: $31.92 billion vs. $31.83 billion expected

Target’s sluggish sales have reflected a pullback in discretionary spending over the past two years, especially after huge pandemic-driven gains. Its annual total revenue grew by about $31 billion – or nearly 40% – from fiscal 2019 to 2022 before sales leveled out. Target also said it took a hit in recent quarters from elevated levels of theft and the fallout from backlash to Target’s merchandise collection for Pride Month.
To attract shoppers, the big-box retailer has emphasized value and more frequently bought categories, such as food and beauty. Over the holiday season, for example, Target touted a wide assortment of gifts and a holiday meal for four for under $25. 
Last month, it launched a new low-priced private brand called Dealworthy, with products like socks, paper towels, laundry detergent and more. Most items cost under $10.
Target’s profits have suffered along with its sales. But the retailer made more money in the fourth quarter than it did a year ago, as it marked down fewer items and had more products in stock. 
Target’s net income for the three-month period rose by nearly 58% to $1.38 billion, or $2.98 per share, from $876 million, or $1.89 per share in the year-ago quarter. That was significantly higher than Target’s forecasted range of between $1.90 and $2.60 per share.
Its margins also were healthier compared with a year ago. Its fourth quarter operating income margin rate was 5.8% compared with 3.7% in the year-ago quarter, a time when Target’s results took a hit as customers bought fewer higher-margin items like clothing, and more of lower-margin ones, such as food and household essentials.
In the fiscal fourth quarter that ended Feb. 3, Target’s total revenue grew nearly 2% from $30.98 billion in the year-ago period. Those results got a boost from an additional week of sales compared to fiscal 2022.
Comparable sales dropped in stores and online. Comparable store sales fell 5.4% year over year. Digital sales declined 0.7% year over year, marking an improvement from the 6% drop in the third quarter.
The sequential improvement in traffic trends – from a 4.1% decline in the third quarter to a 1.7% decline in the fourth quarter – was fueled by more shoppers using curbside pickup. 
As of Monday’s close, Target’s shares are up nearly 6% so far this year. That falls short of the approximately 8% gains of the S&P 500 during the same period. Target’s shares closed on Monday at $150.49, bringing the company’s market value to $69.48 billion. More