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The automaker slightly lowered capital expenditure expectations and raised its adjusted free cash flow outlook for the year.
Ford’s traditional business, known as Ford Blue, reported adjusted earnings that were down 66% compared to a year earlier.
Ford has faced years of inflated warranty costs, which have affected its earnings.

The Ford display at the New York International Auto Show on March 28, 2024. 
Danielle DeVries | CNBC

DETROIT — Sales of Ford Motor trucks and other commercial vehicles led the automaker to beat Wall Street’s earnings estimates for the first quarter, offsetting losses of its electric vehicles.
The company maintained its 2024 earnings guidance of adjusted earnings before interest and taxes, or EBIT, of between $10 billion and $12 billion. It slightly lowered capital expenditure expectations and raised its adjusted free cash flow outlook for the year.

The automaker now expects to generate adjusted free cash flow of $6.5 billion to $7.5 billion, up from a previous outlook of $6 billion to $7 billion. Its forecast for capital expenditures is now $8 billion to $9 billion, narrower than the $8 billion to $9.5 billion range it originally estimated.
Ford Chief Financial Officer John Lawler on Wednesday described the quarter as “solid,” with the company tracking to the higher end of its previously announced guidance.
While the automaker beat earnings estimates, it slightly missed on automotive revenue. Here are the results for Ford’s first quarter, compared with Wall Street expectations, according to LSEG:

Earnings per share: 49 cents adjusted vs. 42 cents expected
Automotive revenue: $39.89 billion vs. $40.10 billion expected

Ford’s overall revenue for the first quarter, including its credit business, increased about 3% year over year to $42.78 billion.
Net income for the period was $1.33 billion, or 33 cents per share, compared with $1.76 billion, or 44 cents, a year earlier. Adjusted EBIT declined 18% year over year to $2.76 billion, or 49 cents per share.

Ford’s traditional business, known as Ford Blue, reported adjusted earnings that were down 66% compared to a year earlier to $905 million. Its Ford Pro commercial business earned $3.01 billion, up 120% from the first quarter of last year. Ford’s Model e electric vehicle unit posted a $1.32 billion loss from January through March.

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2024 Ford vs. GM shares

The notable decline in Ford Blue was related to the launch of the company’s refreshed F-150 pickup, which it held shipments of during most of the quarter to address undisclosed quality issues.
Ford CEO Jim Farley said the company avoided “about 12 recalls” thanks to the additional quality checks during the stop-shipment, helping to lower warranty costs for the company.
“What we’re going to see long-term is less recalls and lower warranty costs because of this new process,” Farley said Wednesday during the company’s first-quarter earnings call. “I’m really proud of the team’s progress and quality and we have so much more to do.”
Ford has faced years of inflated warranty costs, including $1.9 billion in 2023, which have affected its earnings. The company last year said it has a $7 billion to $8 billion annual disadvantage compared to traditional rivals due to production costs, quality issues and other operational inefficiencies.
Ford previously said it assembled 144,000 of the F-150 full-size and Ranger midsize pickups during the first quarter of the year. Those vehicles began shipping to dealers and customers earlier this month. Roughly 92% of the pickups built were F-150s.
As part of its 2024 guidance, first released in February, Ford said it expected its EV business to lose between $5 billion and $5.5 billion this year. Ford Blue earnings were expected to be roughly flat at $7 billion to $7.5 billion for 2024, while Ford Pro was expected to come in around $8 billion to $9 billion for the full year.Lawler said Ford remains on track this year to take $2 billion in costs out of the business through reductions in things such as materials, freight and manufacturing. He said much of those savings will occur during the second half of the year.
Ford’s first-quarter earnings come a day after its crosstown rival General Motors reported strong first-quarter results and raised its full-year guidance.
— CNBC’s Michael Bloom contributed to this report.

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Few companies have had a worse start to the year than Boeing. In January a panel plugging an unused emergency exit blew out of a 737 MAX over Oregon. Thankfully the plane landed safely. A preliminary investigation into the near-disaster concluded that the bolts that should keep the panel in place were missing. The incident prompted internal investigations and brought federal regulators to Boeing’s factories to audit manufacturing processes. If that were not enough, on April 16th a whistleblower claimed that unacknowledged defects with 787 Dreamliners were symptomatic of a firm with “no safety culture”.The immediate consequences of the added scrutiny was a sharp fall in deliveries of planes—83 commercial jets in the first quarter, compared with 130 a year ago and, gratingly, with 142 by Airbus, Boeing’s European arch-rival (see chart). The damage was apparent when Dave Calhoun, its boss, presented quarterly results on April 24th. After announcing a net loss of $355m, he sought to assure sceptical investors that the company was making good progress in resolving its manufacturing problems. Hanging over the earnings call was also the question of who might replace Mr Calhoun, who a month ago announced his departure at the end of the year amid a big shake-up of management and the immediate appointment of a new chairman.Chart: The EconomistMr Calhoun’s successor will face an unenviable in-tray. A comparison with the fortunes of Airbus highlights Boeing’s slide. In 2017 Boeing’s market value was two and half times its only rival’s; now it is roughly the same. Since 2019, when the entire 737 MAX fleet was grounded for nearly two years after two fatal accidents attributable to faulty software, Boeing’s combined annual net losses have amounted to $24.5bn. In the same period Airbus has made profits of nearly $10bn. Boeing’s orders of 6,200 planes are far below the 8,600 in the European firm’s books.The roots of Boeing’s many crises are summed up by Aviation Strategy, a consultancy. An “obsession with quarterly results and share price momentum” resulted in too much cash being returned to shareholders and too little put into developing new products or ensuring production quality. Between 2014 and 2020 Boeing handed out $61bn in dividends and share buy-backs. It was not just shareholders who benefited. So did managers, whose bonuses were tied to their employer’s surging share price. Ron Epstein of Bank of America notes that a merger with McDonnell Douglas in 1997 foreshadowed a “cultural shift away from engineering excellence”. Boeing began to favour short-term financial management in a long-term industry, while Airbus focused less on investors and more on its aircraft, which might have a life-cycle measured in decades.Reversing the cultural slide will be the hardest job for the new boss. It could take years. More immediately Mr Calhoun’s replacement will have to ramp up production of the 737 MAX and guide new variants of this and other long-haul planes to certification. At the same time, he or she must prepare the ground for the next generation of short-haul passenger jets. Airlines are angry with Boeing for delivery delays of the 737 MAX. Regulators, awaiting Boeing’s plan to improve quality control, have capped production at 38 a month. Boeing’s troubles mean that it does not actually expect to hit that rate until later in the year, by which time Airbus may be making 65 of its competing A320s.Delays could have a lasting effect. Switching to Airbus would be no easy matter for airlines, not least because the European firm has no free delivery slots for its short-haul jets until the end of the decade. Yet a point could come when carriers feel they can no longer depend on Boeing. United Airlines is rumoured to be considering replacing an order for a larger version of the 737 MAX that is five years behind schedule but, with certification still pending, as yet with no prospect of delivery.Boeing’s reliance on its past reputation as an American industrial behemoth won’t cut it. As Mr Epstein observes, it may be “too big to fail but it is not too big to be mediocre”. A struggling Boeing could open the door for challengers. COMAC, a Chinese one, has long-standing plans to break the duopoly, though so far without a plane that can truly compete with a Boeing or an Airbus. Embraer, a Brazilian maker of smaller regional jets, could also move into bigger aircraft.New short-haul jets, likely to enter service around 2035, are another priority. It is a huge and expensive task that Mr Calhoun reckons will cost $50bn. To investors’ consternation, that is nearly double the figure for Boeing’s previous clean-sheet designs. Choosing the right technology is a task that Boeing has to get right. But some observers fear that the firm, which has not launched an all-new plane since the 787 in 2004, may have lost the institutional memory for such a huge undertaking.The new boss will inherit other headaches. A third of Boeing’s revenues come from its defence-and-space division. In the past those profits have insulated Boeing from the cycles of the passenger-jet business. In the past two years they have turned to losses. Boeing has mismanaged fixed-price development deals, even as the Pentagon increasingly favours these to conventional “cost-plus” contracts, which remove most financial risk from the contractor. Boeing has also fallen far behind Elon Musk’s SpaceX, whose rockets are already serving the International Space Station. Starliner, the rival vehicle from Boeing, has yet to make a crewed test flight.Who, then, might take the yoke? External candidates are thin on the ground. Larry Culp, who has successfully turned around GE, another troubled icon of America Inc, appears to have ruled himself out. Bill Brown, who led the merger that in 2019 created L3Harris, a defence company, is instead taking the top job at 3M, an industrial conglomerate. Pat Shanahan, currently the boss of Spirit AeroSystems, one of Boeing’s suppliers, could be a contender—were it not for the fact that Boeing is seeking to acquire his company in an effort to improve oversight. The most plausible insider is Stephanie Pope, promoted to head of the commercial-aircraft division in the recent reshuffle. Accepting the top job at Boeing would once have been a no-brainer. Now Ms Pope, or anyone else, will think long and hard about it. ■ More

On the night before Elon Musk unveiled Tesla’s first-quarter results on April 23rd, your columnist brought his car to a halt, noticing a futuristic vehicle hooked up to a Tesla charging station in Los Angeles. It was a dark-purple Cybertruck. Twinkling lights glittered behind the tinted windows. It looked so wedgelike, angular and otherworldly that it could have moonlighted as an armoured personnel carrier in “Civil War”, a new apocalyptic film.Its owner, Dennis Wang, is a Tesla devotee. Besides his four-month-old Cybertruck, he has owned Mr Musk’s original (“sexy”) quartet: the Models S, 3, X and Y. He has held shares in the company since 2018. He has full faith in Mr Musk. Despite a 40% plunge in Tesla’s share price this year in the run-up to the earnings report, as well as the announcement in recent weeks of falling vehicle sales and unprecedented lay-offs, he believes the billionaire remains the best person to run the company. Even an embarrassing Cybertruck recall, caused by a stuck accelerator, was quickly fixed, he says, pointing to a new bolt in the pedal.Yet however much Mr Wang loves Teslas, he does not think of Tesla as a car firm. He says it is a tech company. As he puts it, all electric vehicles (EVs) offer a similar driving experience. What differentiates them is the software—the brains beneath the dashboard. In Tesla’s case, that is the latest version of its self-driving technology, which he calls “fantastic”. His view is shared by many Tesla loyalists. It is why the company’s shares trade at a multiple of earnings typical of a zippy software firm, not of a metal-basher.Wall Street takes a different view. Though investors hope Tesla will one day make money from its snazzy artificial intelligence (AI), for now they want it to restore growth by selling more cars—the cheaper the better. Hence the sigh of relief when Tesla outlined plans within an otherwise dismal earnings report (revenues, profit margins and free cashflow all crashed) to start producing affordable vehicles by 2025 that would not rely on big new investments. Tesla’s share price promptly soared more than 10%. Call that a $50bn thumbs up from the unit-economics guys.Mr Musk has a history of trying to have it both ways. When investors were doubtful about demand for Tesla’s EVs at the end of the 2010s, he promised shareholders that its so-called full self-driving (FSD) technology would put 1m robotaxis on the road by 2020. That did not happen, so during the pandemic, as Tesla’s sales rocketed, he changed his tune. He boasted that sales were growing faster than Henry Ford’s Model T, and that Tesla aspired to sell 20m EVs a year by 2030.This year it is touch and go whether Tesla will sell more than the 1.8m cars it shipped in 2023. So Mr Musk has flipped the script again. Once more he is highlighting FSD, though this time with a twist: the latest version is so good, he told analysts this week, that it is impossible to understand the company without trying it. He went so far as to say: “If someone doesn’t believe Tesla will solve autonomy, I think they should not be an investor in the company.” His competing narratives create quite the conundrum among investment types. Can Tesla be a car company as well as a tech company? The answer, broadly, is yes. But it depends on which of its markets you are talking about.From a volume-growth perspective, no country is more important than China. It is the world’s biggest EV market, and though sales are slowing, they are still rising much faster than in America. However, competition is fierce and a price war is shredding Tesla’s business there. Tesla has not said where the cheaper model it is planning will be sold. But if it is made available globally, it could help it fend off competition from BYD, a low-cost Chinese competitor that is not just the biggest EV seller in China but also has a strong presence around the globe (though not in America).Tesla’s American home market is different. Mr Musk’s firm is already the market leader, so its growth prospects are probably constrained, more so because of the rising popularity of hybrids. Yet it needs to sell more cars in order to generate cash to fund the purchase of huge volumes of AI chips that it needs to run its FSD technology. That is where a cheaper car comes in. It could help Tesla cross a bridge to the future while it attempts to overcome the huge engineering and regulatory challenges necessary for cars to drive people, rather than the other way around.There are lots of potential roadblocks ahead. First is the risk of crumbling morale. Besides the sacking of one-tenth of its workforce, Tesla has lost several highly respected executives recently (the latest announced his departure on the quarterly earnings call). Second, trust between Mr Musk and big investors is gossamer-thin. Who knows how he will react if a majority at next month’s shareholder meeting vote against the board’s efforts to reinstate his $56bn payout from 2018 that was voided by a Delaware judge. Third, the difficulty of running many businesses besides Tesla is compounded by Mr Musk’s “demon mode”—irascible outbursts that can leave rubble in their wake.View from the CybertruckLike many Muskophiles, Mr Wang expects him to pull through. As a carmaker, Mr Musk excels. The Cybertruck, says its driver as his corgi scampers on the back seat, is the most comfortable car he has ever owned. As a technologist, Mr Musk continues to improve. Though Mr Wang acknowledges that the latest version of Tesla’s FSD requires driver supervision, he says being able to “sit back and decompress” on his commute is a value equivalent to money. Above all, no one matches Mr Musk when it comes to turning engineering dreams into reality. As he puts it, “If Elon wants to put a chip in your head, you will get a chip in your head.” Just don’t expect it to be implanted until years after it is promised. And be prepared for its Svengali to melt down in the meantime. ■ More

Biogen reported first-quarter profit that topped estimates as the company’s cost-cutting efforts took hold and sales of its closely watched Alzheimer’s drug, Leqembi, came in higher than expected.
Leqembi brought in approximately $19 million in sales for the quarter, up from the $10 million the drug generated last year.
The number of patients on the therapy increased nearly 2.5 times since the end of 2023, according to Biogen.

A test tube is seen in front of displayed Biogen logo in this illustration taken on, December 1, 2021.
Dado Ruvic | Reuters

Biogen on Wednesday reported first-quarter profit that topped estimates as the company’s cost-cutting efforts took hold and sales of its closely watched Alzheimer’s drug, Leqembi, came in higher than expected.
Biogen and Eisai’s Leqembi became the first drug found to slow the progression of Alzheimer’s disease to win approval in the U.S. in July. The treatment’s launch has been sluggish, but uptake appeared to accelerate in the first quarter. 

Leqembi brought in about $19 million in sales for the quarter, up from the $10 million the drug generated last year. That blows past the $11 million analysts had expected, according to estimates compiled by FactSet. 
The number of patients on the therapy increased nearly 2.5 times since the end of 2023, according to Biogen. The company added that the number of new patients who started Leqembi jumped in March, making up more than 20% of the cumulative patients now on the treatment. 
Biogen did not provide a specific number of patients using Leqembi. In February, Biogen CEO Chris Viehbacher told reporters that there were around 2,000 patients currently on Leqembi.
The company hopes the drug and other newly launched products will drive growth as it cuts costs and sees sales plummet for its multiple sclerosis therapies, some of which face generic competition.
Here’s what Biogen reported for the first quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG: 

Earnings per share: $3.67 adjusted vs. $3.45 expected
Revenue: $2.29 billion vs. $2.31 billion expected

The biotech company booked sales of $2.29 billion for the quarter, down 7% from the same period a year ago. It reported net income of $393.4 million, or $2.70 per share, for the first quarter, up from net income of $387.9 million, or $2.67 per share, for the same period a year ago. 
Adjusting for one-time items, the company reported earnings of $3.67 per share.
Biogen reiterated its full-year 2024 adjusted earnings forecast of $15 to $16 per share. Analysts surveyed by LSEG had expected full-year earnings guidance of $15.49 per share. 
The company also reiterated its 2024 sales guidance of a low- to mid-single-digit percentage decline compared with last year. 

Newly launched drugs top estimates

Apart from Leqembi, investors also have their eyes on other newly launched drugs. 
That includes Skyclarys, brought in by Biogen’s acquisition of Reata Pharmaceuticals in July. That drug notched $78 million in first-quarter revenue.
Analysts had expected sales of $68.8 million, according to FactSet estimates. 
The Food and Drug Administration cleared Skyclarys last year, making it the first approved treatment for Friedreich’s ataxia, a rare inherited degenerative disease that can impair walking and coordination in children as young as 5. In February, European Union regulators approved Skyclarys for the treatment of Friedreich’s ataxia in patients ages 16 and up. 
Biogen has also partnered with Sage Therapeutics on the first pill for postpartum depression, which won FDA approval in August. But the agency declined to clear the drug for major depressive disorder, which is a far larger market. 
Biogen said that pill, called Zurzuvae, generated first-quarter sales of $12 million. Analysts had expected just $5 million in sales of that drug, FactSet said.

Multiple sclerosis drugs, other treatments

Meanwhile, Biogen’s first-quarter revenue from multiple sclerosis products fell 4% to $1.08 billion as some of its therapies face competition from cheaper generics. 
The company’s once-blockbuster drug Tecfidera, which is facing competition from a generic rival, posted revenue of $254.3 million in the first quarter, down from $274.5 million from the same period a year ago. 
Still, that came in higher than analysts’ estimate of $227.7 million, according to FactSet. 
Vumerity, an oral medication for relapsing forms of multiple sclerosis, generated $127.5 million in sales. That came in below analysts’ estimates of $137.9 million, FactSet estimates said. 

More CNBC health coverage

Biogen’s rare disease drugs recorded $423.9 million in sales, down from the $443.3 million in the same period a year ago. 
Spinraza, a medication used to treat a rare neuromuscular disorder called spinal muscular atrophy, recorded $341.3 million in sales. That came under analysts’ estimate of $415.1 million in revenue, according to FactSet. 
Biogen said the timing of Spinraza shipments and increased competition affected first-quarter revenue comparisons outside of the U.S.
The company’s biosimilar drugs booked $196.9 million in sales, up slightly from the $192.4 million reported during the year-earlier period. Analysts had expected sales of $192.5 million from those medicines.
Correction: Skyclarys had $78 million in first-quarter revenue. An earlier version misstated the quarter.

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Boeing reported a narrower loss and lower cash burn than analysts feared.
Boeing’s departing CEO Dave Calhoun says the company’s 737 Max supply chain is starting to stabilize.
The company is under increased scrutiny from the FAA after a door panel blew out of one of its Max 9 jetliners in January.

An aerial photo shows Boeing 737 Max airplanes parked on the tarmac at the Boeing Factory in Renton, Washington, on March 21, 2019.
Lindsey Wasson | Reuters

Boeing on Wednesday reported a narrower-than-expected loss and lower cash burn than anticipated, and said it is stabilizing its supply chain as it grapples with the latest 737 Max safety crisis.
Boeing burned $3.9 billion in the first quarter, beating a previous company forecast and Wall Street analysts’ expectations for cash burn of as much as $4.5 billion for the three-month period.

“Near term, yes, we are in a tough moment,” CEO Dave Calhoun, who announced in March that he would step down by year-end, said in a note to employees on Wednesday. “Lower deliveries can be difficult for our customers and for our financials. But safety and quality must and will come above all else. We are absolutely committed to doing everything we can to make certain our regulators, customers, employees, and the flying public are 100 percent confident in Boeing.”
Boeing has been hamstrung in ramping up production, especially of its best-selling 737 Max planes, and instead has lowered output. After the door plug blew out on the Alaska Airlines Max 9 on Jan. 5, the Federal Aviation Administration has barred Boeing from increasing output. The FAA also said it found numerous issues of noncompliance along Boeing’s supply chain.
Calhoun said the company has lowered production to below 38 Max jets per month. Deliveries have slowed sharply this quarter.
Boeing’s all-important commercial airplane unit revenue dropped 31% to $4.65 billion in the quarter compared with last year, with negative margins widening to 24.6% from 9.2%.
“We are using this period, as difficult as it is, to deliberately slow the system, stabilize the supply chain, fortify our factory operations and position Boeing to deliver with the predictability and quality our customers demand for the long term,” Calhoun said. “As these efforts begin to take hold, we’re seeing early signs of more predictable, stable and efficient cycle times in our 737 factory, and expect this will continue to slowly improve.”

Boeing lost $355 million in the first quarter, or 56 cents a share, down from a $425 million, or 69 cent per-share, loss a year earlier. Excluding one-time items, including pension costs, Boeing lost $388 million, or $1.13 a share.
Revenue fell 8% to $16.57 million, slightly ahead of analysts’ estimates.
Here’s what the company reported compared with what Wall Street analysts surveyed by LSEG were expecting:

Loss per share: $1.13 adjusted, vs. estimated adjusted loss $1.76
Revenue: $16.57 billion, vs. estimated $16.23 billion

Boeing executives will hold a call with analysts at 10:30 a.m. ET, and questions abound for Boeing’s lame duck CEO Calhoun and other Boeing leaders.
Among those questions: When will Boeing stabilize its production line and increase production of the 737 Max and other planes? When will Boeing appoint a new CEO? How much will the current crisis cost Boeing? When might Boeing finalize a deal to buy back fuselage maker Spirit AeroSystems. More

Foot Locker debuted its new “store of the future” concept that will be rolled out in five cities and inspire the revamping of 900 stores the sneaker retailer is planning over the next two years.
The store design features an immersive layout, a “drop zone” for new sneaker releases and a “sneaker hub” for customized options like specialized lacing. 
The longtime sneaker retailer does the bulk of its sales in stores so revitalizing its sprawling footprint, and ensuring it’s a place brands want to be, is critical to its survival.

A Foot Locker, Inc. store. 
Courtesy of: Foot Locker, Inc.

A new and improved Foot Locker debuted at a New Jersey mall on Wednesday as the sneaker retailer looks to reverse a sales slump, keep brand partners loyal and win back Wall Street’s confidence by revamping the footprint for its all-important stores. 
The new concept Foot Locker bills as its “store of the future” turns the retailer’s tired mall format on its head through a streamlined layout that’s more immersive than the typical format, which tends to be two walls of shoes with a middle section used for trying on sneakers. The new format also includes a “drop zone” that shows off new sneaker releases, a communal try-on area, elevated brand product displays and a “sneaker hub” for customized options like specialized lacing.

Even the Striper uniform, the iconic black and white striped outfit worn by Foot Locker’s store associates, is getting a refresh, Frank Bracken, Foot Locker’s chief commercial officer, told CNBC in an interview. 
“They’ll be familiar and recognizable; I’d say they’ll be modernized in a really tasteful sort of elegant way,” said Bracken. “We sweated the details between our men’s and our women’s tops and bottoms so that the fit and the choice that they have to put together a uniform could really personalize it to their body and for their style preference.” 

A Foot Locker, Inc. store. 
Courtesy of: Foot Locker, Inc.

The new store, located at the Willowbrook Mall about 20 miles west of Manhattan in Wayne, is the first of five slated to open this year. It is a critical part of the retailer’s “Lace Up” strategy that CEO Mary Dillon unveiled at its investor day in March 2023. Similar concepts are set to open at Foot Locker’s 34th Street flagship store in New York City, in Paris ahead of the Summer Olympics, as well as in Melbourne and Delhi. 
As the retailer draws about 80% of its revenue from its more than 2,500 physical locations, Dillon has focused on revitalizing Foot Locker’s store footprint since she took over in September 2022. She’s working to build new, off-mall locations, close underperforming stores and refresh existing locations. 
Dillon and her team are betting that the new store designs will bring in customers who are shopping outside of malls and give sneakerheads a reason to come to its shops rather than go directly to a brand’s website or store.

A Foot Locker, Inc. store.
Courtesy of: Foot Locker, Inc.

In fiscal 2023, Foot Locker spent $242 million remodeling and building out new stores, among other capital expenditures. The company plans to spend another $200 million on real estate projects this year, according to company securities filings. 
In addition to the five “store of the future” shops Foot Locker plans to open this year, the retailer is using the concept to inspire 900 store redesigns in 2024 and 2025, with about 100 planned for each quarter, said Bracken. 
“All the standards around the storefront, the fixturing, the storytelling, the merchandising standards, we’re going to rapidly deploy that across 900 stores, and there’s a real sort of symbiotic relationship between those refreshes and then the ‘store of the future,’ so they’ll look very complementary,” he said.

Frank Bracken Executive Vice President and Chief Commercial Officer of Foot Locker, Inc.
Courtesy of: Foot Locker, Inc.

Foot Locker’s shifting real estate strategy comes as the retailer contends with an ongoing sales decline and a stock price that is down about 29% year-to-date as of Tuesday’s close, compared to the S&P 500’s gains of more than 6%.
Foot Locker has struggled to grow sales in part because it now competes against its own brand partners, which have spent the last few years building out their own websites and stores and reducing their reliance on wholesalers. 
Keeping brands like Nike and Adidas happy isn’t just critical to Foot Locker’s top line, it’s imperative to the company’s survival. That’s why elevated brand storytelling and enhanced product displays — two central requests from Foot Locker’s partners — are integral parts of the retailer’s new store concepts. 

A Foot Locker, Inc. store. 
Courtesy of: Foot Locker, Inc.

An overall view of a Foot Locker, Inc. store.
Courtesy of: Foot Locker, Inc.

“When we think about this, this isn’t just Foot Locker in isolation thinking what’s important, or what do we want,” said Bracken. “[We’re] partnering very closely with our brand partners to bring digital storytelling and then product merchandising and storytelling to another level.”
Luckily for Foot Locker, its store redesign plans come at a time when sneaker brands like Nike are rethinking their sales strategy and realizing that wholesalers, especially ones with massive footprints, are necessary for their own growth. Earlier this month, Nike CEO John Donahoe acknowledged the company moved too far away from wholesale partners in its quest to drive direct sales and has since “corrected that” by reinvesting with its retail partners. 
That “shift in tides” hasn’t gone unnoticed, said Bracken. 
“We’ve got the support of our brand partners in a way that’s refreshing and maybe hasn’t been as clear and transparent as the last couple of years,” he said. “We feel like we’re very well positioned as a critical, strategic retail partner in the future and now it’s on us. [2024] is definitely an inflection point.”

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Starbucks and the Workers United union will resume bargaining, ending a long stalemate.
In February, the two sides said they found a “constructive path forward,” marking a major strategic pivot for the coffee giant.
Labor laws do not require that the employer and union reach a collective bargaining agreement, only that both bargain in good faith.

Starbucks and the union that represents its baristas will resume contract negotiations on Wednesday, ending an extended stalemate.
The two sides’ return to the bargaining table follows their February announcement that they found a “constructive path forward” during mediation discussions related to litigation over the union’s use of Starbucks’ branding. It marked a major pivot for Starbucks, which had spent the previous two years battling Workers United and the broader movement to unionize its cafes.

Roughly 500 company-owned Starbucks in the U.S. have voted to unionize under Workers United since the first elections in December 2021, according to a tally from the National Labor Relations Board, as of Monday. But none of those locations, which make up a small fraction of total U.S. footprint, have come close to a collective bargaining agreement.
Starbucks and the union, which is affiliated with the Service Employees International Union, have previously met to bargain, but those talks quickly ended in stalemate. Both sides have accused the other of sabotaging the talks.
Starbucks had previously insisted on face-to-face negotiations, with no representatives appearing via Zoom. The union has accused Starbucks of using that excuse as a stalling tactic. It is unclear if all representatives will be appearing in person in the latest round of talks.
Store agreements will be negotiated and ratified separately, but the union might make proposals that could affect all of the Starbucks workers it represents. Workers United has broadly pushed for higher wages and more consistent scheduling, among a range of other priorities.
Labor laws do not require that the employer and union reach a collective bargaining agreement, only that both bargain in good faith. After a year, workers who lose faith in the union can petition to decertify, putting a ticking clock on negotiations. 

The NLRB has 19 pending petitions to decertify. Citing unfair labor practices by Starbucks, the labor board has denied 18 other petitions to decertify.
The company said it has also been negotiating with other unions that represent its cafes, such as the International Brotherhood of Teamsters, which is bargaining for a store outside of Pittsburgh.
The resumption of contract negotiations comes a day after another significant moment for both Starbucks and unions. On Tuesday, the company appeared before the Supreme Court to appeal a lower court’s approval of an injunction sought by the NLRB to reinstate seven fired workers at a Memphis cafe.
Starbucks argued that other agencies seeking injunctions have a higher threshold to receive one than the labor board does. Experts have said that the Supreme Court’s eventual ruling could weaken the NLRB — and organized labor. The court is expected to release its decision this summer.
Starbucks could share more about the union negotiations during its quarterly earnings call. The coffee giant is expected to report its results on Tuesday.

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More than 3 million people with Medicare could be eligible for coverage of Wegovy now that the popular weight loss drug is also approved in the U.S. for heart health, according to an analysis by health policy research organization KFF. 
But some beneficiaries could still face out-of-pocket costs for the highly popular and expensive drug, and certain Medicare prescription drug plans may also wait until 2025 to cover Wegovy.
Medicare’s budget could also be strained as more Part D plans cover the costs of Wegovy.

Boxes of Wegovy made by Novo Nordisk are seen at a pharmacy in London, Britain March 8, 2024. 
Hollie Adams | Reuters

More than 3 million people with Medicare could be eligible for coverage of Wegovy now that the blockbuster weight loss drug is also approved in the U.S. for heart health, according to an analysis released Wednesday by health policy research organization KFF.
But some eligible beneficiaries could still face out-of-pocket costs for the highly popular and expensive drug, KFF said. Certain Medicare prescription drug plans may also wait until 2025 to cover Wegovy.

Medicare’s budget could be strained as more plans cover the costs of Wegovy. The program’s prescription drug plans could spend an additional net $2.8 billion if just 10% of the eligible population, an estimated 360,000 people, use the drug for a full year, according to KFF.
Under new guidance issued in March, Medicare Part D plans can cover Wegovy for patients as long as they are obese or overweight, have a history of heart disease and are specifically prescribed the weekly injection to reduce their risk of heart attacks and strokes. The Food and Drug Administration approved Wegovy for that purpose in March.
KFF said that applies to 3.6 million, or 7%, of total beneficiaries, based on 2020 data. That group also makes up 1 in 4 of the 13.7 million Medicare patients who are obese or overweight. Those numbers may be higher based on more recent data, the nonprofit group said.
The analysis suggests that, for the first time, certain Medicare beneficiaries will be able to access Novo Nordisk’s Wegovy without having to shoulder the total $1,300 monthly price tag alone.
Notably, Medicare prescription drug plans administered by private insurers, known as Part D, currently cannot cover Wegovy and other GLP-1 drugs for weight loss alone. GLP-1s are a buzzy class of obesity and diabetes treatments that work by mimicking a hormone produced in the gut to suppress a person’s appetite and regulate their blood sugar. 

But KFF’s analysis found that Medicare beneficiaries who take Wegovy could still face monthly out-of-pocket costs of $325 to $430 if they have to pay a percentage of the drug’s list price for a month’s supply.
A new Part D cap on out-of-pocket spending would limit beneficiaries’ out-of-pocket costs to around $3,300 in 2024 and $2,000 in 2025. Still, those sums are a significant burden for those who live on modest incomes.
Some patients also may struggle to access Wegovy if Part D plans that decide to cover it implement certain requirements to control costs and ensure the drug is being used appropriately. That could include “step therapy,” which requires plan members to try other lower-cost medications or means of losing weight before using a GLP-1 such as Wegovy.
“These factors could have a dampening effect on use by Medicare beneficiaries, even among the target population,” KFF wrote in its analysis.
Some Part D plans have already announced that they will begin covering Wegovy this year, but it’s unclear how widespread coverage will be. KFF said many plans may be reluctant to expand coverage now since they can’t adjust their premiums mid-year to account for higher costs associated with use of the drug.
That means broader coverage in 2025 could be more likely, KFF added.
Medicare already covers GLP-1s and other treatments for diabetes, such as Novo Nordisk’s blockbuster Ozempic. 
Among the Medicare beneficiaries who are obese or overweight and have a history of heart disease, 1.9 million also have diabetes, according to KFF. That makes them already eligible for Medicare coverage of other GLP-1 drugs approved for that condition.

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