Business

The Covid-19 vaccine maker reported a net loss of more than $169 million for the third quarter, compared to a loss of $322 million in the same period last year.
Novavax reported third quarter revenue of $735 million, a more than 300% increase year over year.
But Novavax also revised its 2022 revenue guidance to $2 billion, the lower end of its previous forecast.

In this photo illustration a silhouette of a man holding a medical syringe and a vial seen displayed in front of the Novavax logo on a screen.
Cezary Kowalski | Lightrocket | Getty Images

Novavax posted an unexpected loss on Thursday but beat Wall Street’s revenue expectations for the third quarter.
The Covid-19 vaccine maker reported a net loss of more than $169 million for the third quarter, compared to a loss of $322 million in the same period last year.

Novavax reported third quarter revenue of $735 million, a more than 300% increase year over year. The company’s stock rose more than 2% in extended trading.
Here’s how the company performed compared with what Wall Street expected, based on analysts’ average estimates compiled by Refinitiv:

Adjusted earnings: Loss of $2.15 per share vs. profit of $1.57 per share expected
Revenue: $735 million vs. $586.2 million expected

But Novavax also revised its 2022 revenue guidance down to $2 billion, the lower end of its previous forecast. The company previously slashed its annual revenue expectations by 50% to a range of $2 billion to $2.3 billion in the second quarter. Covid vaccine demand has softened globally as the pandemic has eased and more people are immunized than ever before.
The Food and Drug Administration authorized a booster dose of Novavax’s Covid vaccine for people ages 18 and older last month. The authorization was a major milestone for the company because the FDA also allowed people who got Pfizer and Moderna as their primary series to receive Novavax as their first booster.
The FDA first approved the Novavax’s primary vaccination series back in July. Although Novavax was one of the original participants in the race to produce a Covid vaccine, the company struggled to gets its manufacturing up and running and fell behind Pfizer and Moderna.
As a consequence, the small Maryland biotech company has struggled to break into the U.S. market. Only 43,000 doses have been administered in the U.S. so far.

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Lucid confirmed that it’s still on track to make between 6,000 and 7,000 of its Air luxury sedans in 2022.
The company announced plans to raise $1.5 billion, including over $900 million from Saudi Arabia’s public wealth fund, already its largest investor.
Lucid reported a net loss of $530 million for the third quarter, on $195.5 million in revenue.

Electric vehicle start-up Lucid on Sept. 28, 2021 said production of its first cars for customers has started at its factory in in Casa Grande, Arizona.

Electric vehicle maker Lucid Group on Tuesday reported that it lost $530 million in the third quarter but confirmed that it’s still on track to make between 6,000 and 7,000 of its Air luxury sedans in 2022.
The company also revealed plans to raise $1.5 billion from investors, including a significant new investment from Saudi Arabia’s public wealth fund, which currently owns about 60% of Lucid.

Shares were down over 13% in after-market trading.
Here’s what the company reported:

Revenue: $195.5 million, versus $232,000 in the year-ago quarter, when it was beginning production of the Air sedan.
Loss per share: 40 cents, versus a loss of 43 cents in the year-ago period.

On Oct. 12, Lucid said that it produced 2,282 vehicles and delivered 1,398 vehicles to customers in the third quarter. CFO Sherry House told CNBC in an interview that many of the remaining vehicles are in transit to customers, and that the company’s production totals may exceed deliveries for the next few quarters as it ramps up production.
Lucid also confirmed that it plans to open reservations for its next vehicle, an electric luxury SUV previewed by its Project Gravity show vehicle, early next year.
Lucid said that it had “over 34,000” reservations as of Nov. 7. When it last reported its reservation total, on Aug. 3, it had “over 37,000” customer reservations. Lucid said in April that Saudi Arabia’s government had agreed to buy up to 100,000 of its vehicles over the next 10 years; those vehicles aren’t included in the reservation totals.

The company said it ended the third quarter with $3.85 billion of cash, down from $4.6 billion as of June 30. Its plan to bolster its reserves by about $1.5 billion include $915 million from a series of new investments by Saudi Arabia’s public wealth fund, and $600 million via a traditional secondary stock offering. The funding round is structured to keep the Saudi public wealth fund’s stake in Lucid at its current level.
Lucid confirmed that it’s still on track to meet the revised production guidance it first gave in August, when it said that it expects to produce between 6,000 and 7,000 vehicles in 2022, despite ongoing supply-chain disruptions.

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Disney added 12.1 million Disney+ subscribers and 14.6 million total direct-to-consumer customers in its fiscal fourth quarter.
But Disney’s streaming operating losses more than doubled in the quarter.
Shares slumped as investors viewed lower-than-expected profit and revenue as more bearish than better-than-expected streaming subscriber growth.

The Disney+ Marvel website home screen on a laptop computer in the Brooklyn borough of New York, US, on Monday, July 18, 2022.
Gabby Jones | Bloomberg | Getty Images

The biggest companies in media and entertainment are telling investors to focus on revenue and profit instead of streaming subscriber growth — that message backfired on Disney Tuesday.
Disney added 12.1 million Disney+ subscribers and 14.6 million total direct-to-consumer customers in its fiscal fourth quarter. Both numbers surpassed most analyst estimates and blew away quarterly additions from Netflix, which gained just 2.4 million new subscribers in the quarter.

A year ago, the robust streaming growth numbers may have pushed Disney shares higher. But media and entertainment executives are pushing investors to value their companies on profit and revenue instead of purely subscriber growth. And those numbers weren’t kind to Disney this quarter.
Disney shares fell 6% after hours.
Total quarterly Disney revenue of $20.1 billion missed the average analyst estimate by nearly $1 billion, based on Refinitv consensus estimates. Net operating losses in Disney’s streaming division, which includes Disney+, Hulu and ESPN+, ballooned to $1.47 billion in the quarter. That’s more than double the loss from a year ago, which Disney partially blamed on the lack of “premier access” content, or theatrically released films for which Disney charged an extra $30 to stream, such as “Black Widow” and “Jungle Cruise.”

Better results coming

Disney said it expects this quarter to be the nadir for streaming losses, and it reaffirmed profitability is coming. Disney Chief Financial Officer Christine McCarthy said during Disney’s earnings conference call operating losses will improve by about $200 million next quarter and will be even lower in the fiscal second quarter of 2023.
Disney is launching its advertising-supported tier for $7.99 per month on Dec. 8. The company announced significant price increases that will also kick in next month. Both measures are being put in place to jumpstart revenue and profit rather than subscriber growth. The benefits from both changes will drive Disney’s improved revenue and profit, especially in next year’s fiscal second quarter, McCarthy said on the call.

“We expect our DTC operating losses to narrow going forward and that Disney+ will still achieve profitability in fiscal 2024, assuming we do not see a meaningful shift in the economic climate,” Disney Chief Executive Officer Bob Chapek said in a statement.
Disney warned core Disney+ subscribers would only increase “slightly” next quarter after the company added 9.3 million non-Hotstar customers this quarter. Core Disney+ customers are higher paying than Disney’s India subscribers with average revenue per user of $5.96 per month compared to $0.58 per month for Hotstar.
But for the moment, Disney found itself caught in between a prior narrative of robust subscriber growth and a present and future story about business fundamentals. And investors weren’t forgiving.
WATCH: Disney earnings reaction

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Sweetgreen reported a wider-than-expected loss for the third quarter and lowered its full-year revenue outlook.
This marks the second consecutive quarter that it has lowered its revenue outlook.
In the third quarter, Sweetgreen’s same-store sales rose 6%, entirely driven by menu price hikes.

A worker wears a Sweetgreen Inc. hat while preparing food inside the company’s restaurant in Boston, Massachusetts.
Adam Glanzman | Bloomberg | Getty Images

Shares of Sweetgreen fell 10% in after-hours trading on Tuesday after the salad chain reported a wider-than-expected loss and lowered its full-year revenue outlook.
For 2022, the company now anticipates its revenue will be at or below its prior range of $480 million to $500 million. This marks the second consecutive quarter that it has lowered its revenue outlook.

In the third quarter, Sweetgreen said its same-store sales rose 6%, boosted entirely by menu price hikes. On Monday, the chain announced the launch of its first national dessert in an effort to push up sales.
Sweetgreen executives said in August that the company’s sales began softening around Memorial Day. They attributed the slowdown a number of factors, including summer travel, delays in the return to the office and another wave of Covid-19 cases.
Other restaurant chains have reported a broader shift in consumer spending tied to high inflation. Executives at Chipotle Mexican Grill and McDonald’s told investors that higher-income consumers are spending more at their restaurants, while some lower-income customers are dining out less frequently or buying cheaper menu items.
Sweetgreen reported fiscal third-quarter net loss of $47.4 million, or 43 cents per share, wider than its net loss of $30.1 million, or $1.58 per share, a year earlier. Wall Street analysts surveyed by Refinitiv were expecting a 37 cent loss per share.
In August, Sweetgreen announced it laid off 5% of its support center workforce and planned to downsize to a smaller office building to save money. In the third quarter, it spent $11.1 million before taxes related to those restructuring costs. That figure includes $600,000 it spent abandoning future restaurant sites to streamline future development.

Net sales climbed 29% to $124 million, falling short of expectations of $129.4 million. The chain also missed Wall Street’s estimates for same-store sales growth.
The stock has fallen 45% this year, as of Tuesday’s close, dragging its market value down to $1.9 billion.

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Levi Strauss & Co. tapped Kohl’s CEO Michelle Gass to become its next leader.
Levi CEO Chip Bergh said Kohl’s activist investors nudged Gass to consider the new job.
In her new role at Levi, Gass will lead the iconic denim brand as it works to sell more apparel directly to consumers through its own stores and website.

As Levi Strauss & Co. searched for its next leader, it got help from a surprising source.
Levi CEO Chip Bergh said pressure from activist investors prompted Kohl’s CEO Michelle Gass to consider the job. On Tuesday, Levi announced that Gass will join the company in January as president and become chief executive within 18 months.

“She’s been through the wars,” Bergh told CNBC. “It’s one of the reasons we called her — and she wasn’t out looking. I think the activist situation, the fact that they struck with another letter back in mid to late September, kind of created the conditions for her to take a phone call.”
Gass will succeed Bergh, who has been its CEO since 2011. She declined to comment through Levi and Kohl’s representatives.

Levi Strauss & Co. CEO Chip Bergh speaks at the CNBC Evolve conference November 19th in Los Angeles.
Jesse Grant | CNBC

Gass has led an embattled Kohl’s, which has rebuffed repeated attempts by activist investors to push her out. The retailer’s board struck an agreement last April with a group of the investors by appointing three new directors, including former Burlington Stores CEO Tom Kingsbury.
On Tuesday, Kohl’s named Kingsbury its interim CEO.
Shares of Levi closed Tuesday at $14.86, down about 3%. Shares of Kohl’s ended the day at $28.82, up about 7%.

By the numbers: Levi Strauss and Kohl’s

Levi Strauss

16,600 employees
1,043 stores
Sales in fiscal 2021: $5.76 billion

Kohl’s

99,000 employees
1,166 stores
Sales in fiscal 2021: $19.43 billion

Source: Company filings, FactSet

In her role at Levi, Gass will lead the iconic denim brand as it works to sell more apparel directly to consumers through its own stores and website. About 36% of total sales came from direct sales in the retailer’s most recent fiscal year ended last November. By 2027, Levi said it aims to expand its direct-to-consumer business to 55% of total sales.
Levi is also pressing beyond its signature jeans to sell more tops and activewear. It acquired apparel brand Beyond Yoga last year and plans to nearly double revenue from tops by 2027. It has benefited from a shift to more casual clothing because of the pandemic and a fresh fashion cycle that favors looser-fitting denim rather than skinny jeans.
Bergh said Gass is ready for the role because of her more than two decades of retail experience. He said he’s known her for about a decade and watched as she built brands, launched new initiatives and led a retailer through the challenges of the pandemic.
Led by Gass, Kohl’s has tried to win over more customers and put a modern spin on the department store chain. It added Amazon returns at stores, expanded its online business and opened hundreds of Sephora beauty shops in its department stores. It also expanded its assortment in athleisure — a background that could help after Levi’s acquisition of Beyond Yoga.
Some Kohl’s investors question whether those investments have paid off. The retailer slashed its full-year guidance in August, citing softer demand as consumers get squeezed by inflation. On Tuesday, it shared preliminary third-quarter results. The company anticipates comparable sales to be down 6.9% in the three-month period ended Oct. 29 compared with the year-ago period.
Bergh, however, said Kohl’s changes have had a direct impact on Levi’s sales. At Kohl’s stores with a Sephora, he said its sales have grown “at a faster clip.”
As of this holiday season, Kohl’s had 600 Sephora shops inside of its stores. It plans to add those shops to all of its more than 1,100 locations.
“We’re already starting to see the impact of Sephora stores on our women’s business in Kohl’s,” he said. “It’s definitely driving a new customer there.”

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Astra announced Tuesday it would lay off about 16% of its employees as the space company faces a pivot in its rocket development program.
The company pivoted on its rocket system over the summer, suspending flights to develop a larger rocket that Astra hopes to debut in late 2023.

Astra CEO Chris Kemp speaks inside the company’s headquarters during the company’s “Spacetech Day” on May 12, 2022.
Brady Kenniston / Astra

Astra announced Tuesday it would lay off about 16% of its employees as the space company faces a pivot in its rocket development program.
“Given the challenging macroeconomic environment, we made the difficult but prudent decision to reduce our operating expenses to support our primary near-term objectives,” Astra CEO Chris Kemp said in a press release alongside the company’s third-quarter results.

Astra, which currently has over 400 employees, said it expects to see savings from the headcount reduction in the first quarter of 2023.
The company pivoted on its rocket system over the summer, ending development and flights of its Rocket 3.3 vehicle, in favor of a larger, upgraded Rocket 4.0 vehicle that Astra hopes to debut in late 2023. Astra is now building out its production facility and conducting testing an development of Rocket 4.0.

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The company reported a third-quarter adjusted EBITDA loss of $41.4 million, a 26% larger loss than the same period a year prior. Astra brought in $2.8 million in revenue for the quarter from sales of its spacecraft engines. It had $150.5 million in cash on hand at the quarter’s end.
Astra stock is down 94% this year as of Tuesday’s close of $0.58 a share. The company received a de-listing warning from the Nasdaq in October after its stock fell below $1 a share. The company has until April to lift the stock price back above the level.

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Strange, but true: The S & P 500 has been solidly higher 12 months after the midterm elections in every cycle since 1954, according to Yardeni Research, regardless of which party won or lost. The broad market index’s average one-year gain in 17 post-elections windows has been about 15%. Those facts are on our minds this Election Day, as voters cast their ballots amid a rough year on Wall Street. Everyone is wondering when we’ll see, or whether we’ve already seen, the bottom in the current bear market. Of course, past performance is not indicative of future outcomes, and right now many strategists are worried that inflation and recession fears could continue to weigh on stocks . We recognize the uncertain macro environment may complicate the usual post-midterm rally. Nevertheless, we think the history is worth pointing out to Club members. We also wanted to zoom in on it through a Club-specific lens, analyzing how the 31 stocks in Jim Cramer’s Charitable Trust have done in the 12 months following recent midterm elections. Here’s what we did, with some caveats. We looked at only the past five midterms — 2018, 2014, 2010, 2006 and 2002 — to see which current Club stocks had the biggest 12-month gains following the election. The S & P 500’s average 12-month gain following those five elections is 8.3%. One limitation of the exercise is that not every stock in our portfolio was publicly traded in all five election cycles. Salesforce (CRM) and Alphabet (GOOGL) held initial public offerings in the summer of 2004, while Facebook parent Meta Platforms (META) went public in May 2012. While we chose to highlight the best performers, there were also underperformers and stocks that were in the red in each of the past cycles we looked at. This exercise is designed to show how much stocks moved during these bullish cycles not why they performed as they did. 2018 election These are the five Club stocks with the largest gain between Nov. 6, 2018 — when the midterms were held — and Nov. 6, 2019: Advanced Micro Devices (AMD), Microsoft (MSFT), Qualcomm (QCOM), Procter & Gamble (PG) and Estee Lauder (EL). The S & P 500 advanced 11.7% in that stretch. 2014 election The S & P 500 rose 4.5% between Nov. 4, 2014 and Nov. 4, 2015. These are the five best-performing Club stocks over those 12 months: Amazon (AMZN), Starbucks (SBUX), Constellation Brands (STZ), Nvidia (NVDA) and Meta Platforms. 2010 election Between Nov. 2, 2010 and Nov. 2, 2011, the S & P 500 climbed 3.7%. These are the Club’s top five performers in that span: Estee Lauder, Starbucks (SBUX), Humana (HUM), Bausch Health (BHC) and Costco Wholesale (COST). Note: This list does not include Coterra Energy (CTRA), which soared 163% in the 12 months following the 2010 midterms. The company was known as Cabot Oil & Gas back then. In 2021, it rebranded as Coterra following an all-stock merger of equals with Cimarex Energy. 2006 election The S & P 500 rose 6.7% between Nov. 7, 2006 and Nov. 7, 2007. These 5 Club names registered the largest gains during those 12 months: Apple (AAPL), Amazon, Wynn Resorts (WYNN), Nvidia and Google parent Alphabet. 2002 election Over the past five midterm cycles, the S & P 500 saw its largest 12-month gain between Nov. 5, 2002 and Nov. 6, 2003, jumping 14.9%. These are the best-performing Club holdings in that stretch: Amazon, AMD, Cisco Systems (CSCO), Humana and Wynn Resorts. Final Club thoughts Only two Club holdings outperformed the S & P 500 in each of the 12-month windows following a midterm election: Apple, which was the biggest winner in the 2006 cycle, and Honeywell (HON), even thought it never cracked the top five in an individual yearlong span. Interestingly, there were five Club holdings — Apple, Amazon, Honeywell, Costco and Estee Lauder — that were positive in the 12 months after the midterms in each of the past five election cycles. Finally, it’s also worth reminding everyone that performance over a 12-month period following a specific event — in this case, a midterm election — is just a snapshot in time and does not, necessarily, reflect how the company’s underlying business did during the period. A wide range of factors — some specific to a company, others more macro in nature — affect how a stock trades in the near term. But over the long run, the best companies tend to get rewarded by the market. (See here for a full list of the stocks in Jim Cramer’ Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

People walk past the New York Stock Exchange (NYSE) on Wall Street on July 12, 2022 in New York City.
Angela Weiss | AFP | Getty Images

Strange, but true: The S&P 500 has been solidly higher 12 months after the midterm elections in every cycle since 1954, according to Yardeni Research, regardless of which party won or lost. The broad market index’s average one-year gain in 17 post-elections windows has been about 15%. More

Kohl’s CEO Michelle Gass is leaving the retailer in early December.
The chief executive and retailer have been under pressure from investors.
In a separate release, Levi Strauss & Co. said Gass will step into the role of CEO within the next 18 months.
Kohl’s terminated talks this summer to sell to the Franchise Group, owner of The Vitamin Shoppe.

Kohl’s Chief Executive Officer Michelle Gass
Source: Kohl’s

Kohl’s said Tuesday that CEO Michelle Gass is leaving for a new opportunity after the retailer came under pressure to shake up its leadership.
In a separate release, Levi Strauss & Co. said Gass will join the company in early January as president and step into the role of CEO within the next 18 months, succeeding Chip Bergh.

Shares of Kohl’s closed Tuesday at $28.82, up about 7%. Shares of Levi ended the day at $14.86, down about 3%.
Kohl’s — and Gass — have faced scrutiny and skepticism from investors, as the retailer invested in refreshing its brand and reported lackluster sales results. Activist investor Ancora Holdings pushed Kohl’s to remove Gass from the position. Another activist investor, Macellum Advisors, also urged a change in leadership, including an ouster of the company’s chairman.
The calls for a shake-up intensified after Kohl’s ended talks this summer to sell to the Franchise Group, owner of The Vitamin Shoppe, sending its stock plummeting.
On Tuesday, Kohl’s said Tom Kingsbury, a Kohl’s director, will serve as interim CEO as it searches for a permanent leader. The leadership change will take effect Dec. 2.
In preliminary third-quarter results announced Tuesday, Kohl’s said it anticipates comparable sales to be down 6.9% for the three-month period ended Oct. 29, with net sales falling 7.2%, from a year ago. The company plans to release its full quarterly results on Nov. 17.

Kohl’s board has rebuffed criticism from activist investors and pressed ahead with plans to redesign stores, add new brands and offer more e-commerce options for customers. In 2020, it struck a deal with Sephora to open hundreds of beauty shops in its stores — and now plans to add them to all of its stores.
Early this month, Kohl’s opened a new store format in Tacoma, Washington, with a smaller footprint, more mannequins and a merchandise assortment geared toward local preferences. And ahead of the holidays, it added self pick-up to all stores, an area where customers can retrieve online purchases.
Kohl’s has disappointed with its sales and guidance, especially as middle-income consumers feel squeezed by inflation. In August, it cut its forecast for the year, saying shoppers are making fewer store visits and buying fewer items and less expensive brands when they do. Kohl’s also said it expects net sales for fiscal 2022 to be down 5% to 6% from a year ago, compared with a prior forecast for sales to be flat to up 1%.
It said it anticipated adjusted earnings per share to be between $2.80 and $3.20, compared with earlier guidance of $6.45 to $6.85.
Kohl’s stock is down more than 40% so far this year, and the company has a market cap of about $3.37 billion.
Kingsbury, who was previously CEO of Burlington Stores, joined the board late last year as part of a deal with a group of activist investors including Macellum and Ancora.
In a statement Tuesday, Ancora said it is pleased that Kingsbury is stepping into the interim CEO role and that another director it nominated, Margaret Jenkins, will be part of the CEO search. It echoed its previous letter to Kohl’s, saying it is the right time for the company to get a new leadership team with “strong turnaround experience.”

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