Starbucks posts record fourth quarter revenue after opening hundreds of new stores

 Starbucks reported record revenue in its fourth quarter as it improved sales and efficiency at its existing stores and opened hundreds of new ones.

Revenue for the July-September period rose 11% to $9.4 billion. That surpassed Wall Street’s expectation of $9.3 billion, according to analysts polled by FactSet.

The Seattle coffee giant opened 816 net new stores in the quarter, ending its fiscal year with more than 38,000 stores worldwide.

But the company said an ongoing revamp of its existing North American stores is also improving sales and making operations more efficient.

The company announced the $450 million revamp last fall. It includes new workstations that cut the time and effort it takes to make iced drinks, which now make up 75% of U.S. sales. The company is also installing new ovens and warmers for hot food.

Global same-store sales – or sales at stores open at least a year -- rose 8%, also surpassing analyst forecasts for a 6.8% increase. U.S. same-store sales rose 8%; store traffic was up 2% and consumers spent more per visit on things like food and customized drinks.

Same-store sales in China – the company’s second-largest market – rose 2%. Starbucks said store traffic in China rose 4% but consumers spent less per visit.

Net income jumped 39% to $1.2 billion, or $1.06 per share. That was also higher than Wall Street expectations for 97 cents.

Starbucks shares rose more than 6% in premarket trading Thursday.

The tentative agreement between the UAW and Ford Motor Co. comes with a special separation package being offered to hourly workers.

Listed on page 13 of a 36-page document called the UAW "highlighter" is a $50,000 buyout for an unlimited number of UAW members.

"Your UAW bargaining committee was successful in negotiating enterprise-wide buyout offerings for our legacy members," the document says. "The Special Retirement Incentive (SRI) will be for $50,000 (gross pretax) for an unlimited number of eligible production and skilled trade members. The sign-up period for the SRI will be determined by the national parties and all eligible applicants will be required to retire during the 2024 calendar year."

The eligible parties must retire by Dec. 1, 2024, according to the summary.

What isn't listed on the UAW website is who is eligible to apply for the retirement bonus. The Detroit Free Press confirmed who may apply with a UAW source not authorized to speak on the matter:

  • Workers with 30 or more years of credited service
  • Workers age 55 or older with 10 or more years of credited service
  • Workers age 65 years or older with one or more years of credited service.
Ford Motor Company inspector Roderick "Treetop" Williams takes readings while checking the seal gaps on a Ford F-150 in the Body Shop at the Dearborn Truck Plant in Dearborn on Tuesday, June 6, 2023.
Ford Motor Co. inspector Roderick "Treetop" Williams takes readings while checking the seal gaps on a Ford F-150 in the Body Shop at the Dearborn … Show more   

Ford has many UAW employees whose family members have worked for "Ford's" for generations.

Roderick Williams, 70, of Westland, told the Free Press in June that he planned to retire soon but didn't know when. He had been reporting to the Dearborn Truck Plant since 1970.

"I've been in the Rouge complex all my existence. When I first started out, I didn't care for it. The work was hard," said Williams, a second-generation factory worker. "Ford gave me a life that endured through time."

Williams has hit his 53-year mark and has not retired, Ford spokeswoman Jessica Enoch confirmed on Wednesday.

"I do my job. I get up at 3:55 and start work at 5:30 a.m.," he told the Free Press in June. "I'm just grateful for the fact that I was able to endure, to enjoy what I'm doing, coming in every day."

The UAW strike on the Detroit Three began Sept. 15. Ford reached a tentative agreement on Oct. 25. Some 57,000 union members who work for Ford began the ratification vote on Wednesday. The process is expected to last until mid-November.

Uber (UBER.N) and Lyft (LYFT.O) will pay a combined $328 million to settle claims by New York's attorney general that the ride-sharing companies systematically cheated drivers out of pay and benefits.

Attorney General Letitia James said Uber will pay $290 million and Lyft will pay $38 million to resolve her office's multi-year investigation.

Drivers will also be guaranteed minimum hourly rates and paid sick leave, and be given notices and in-app chat support to address their questions about earnings and other working conditions.

More than 100,000 current and former drivers in the state stand to receive settlement funds and related benefits.

"This settlement will ensure they finally get what they have rightfully earned and are owed under the law," James said in a statement.

She called the accord with the San Francisco-based companies the largest wage theft settlement in her office's history.

Uber and Lyft have long defended against claims nationwide that they shortchange drivers, many of whom are immigrants, out of pay and benefits, sometimes by classifying them as independent contractors instead of employees.

James accused Uber and Lyft of improperly deducting sales taxes and fees for a workers compensation fund from drivers' payments, though passengers should have paid those amounts.

Uber's alleged violations occurred from 2014 to 2017, and Lyft's from 2015 to 2017.

James said both companies also denied drivers sick leave that state and New York City employees are legally entitled to receive.

The probe arose from concerns from the New York Taxi Workers Alliance, which says it represents about 21,000 yellow taxi, green cab, app-based, livery, and corporate car drivers.

Under the settlement, drivers outside New York City will receive a minimum of $26 per hour for rides and sick leave, adjusted annually for inflation.

Drivers in New York City already receive minimum pay and some paid time off, as required by the city's Taxi and Limousine Commission. James said Uber and Lyft drivers there will receive $17 per hour for sick leave, with inflation adjustments.

Sam Bankman-Fried's fraud trial has given an unprecedented window into how a group of graduates from elite U.S. universities in their late 20s and early 30s tried, and ultimately failed, to avert one of the biggest and swiftest corporate meltdowns ever.

Now, the 31-year-old former billionaire's fate could hinge on how jurors view his actions in the 10 days before the FTX cryptocurrency exchange's collapse nearly one year ago.

During the monthlong trial in Manhattan federal court, jurors saw social media posts made by Bankman-Fried during that week assuring panicked FTX customers their funds were safe. They have also seen internal text messages showing Bankman-Fried and other executives discussing a shortfall in funds and debating how to spin the events.

Prosecutors say Bankman-Fried used customer funds to pay lenders to his Alameda Research hedge fund, and that his false assurances to anxious customers in November 2022 were a critical part of his fraud scheme.

The jury deliberations, set to begin on Thursday, will take place behind closed doors. But the 10-day window before FTX's Nov. 11, 2022, bankruptcy declaration could be a significant part of their discussions.

FTX's death spiral began on Nov. 2 when crypto news outlet CoinDesk published an Alameda balance sheet showing it held large quantities of FTT, FTX's in-house token - suggesting close ties between the exchange and a trading firm that Bankman-Fried said on Twitter was treated like any other customer.

Nothing happened at first, testified Caroline Ellison, Alameda's former CEO, and Bankman-Fried's on-and-off girlfriend. But on Nov. 6, FTX's chief engineering officer Nishad Singh wrote her and Bankman-Fried on encrypted messaging application Signal to say FTX customers had withdrawn $1.25 billion over the past day.

"Oof," Bankman-Fried replied, in a message jurors saw.

The Massachusetts Institute of Technology graduate testified net withdrawals rarely exceeded $50 million before then.

Later that day, Changpeng Zhao, chief of rival crypto exchange Binance, wrote on Twitter that his exchange had decided to sell its stockpile of FTT "due to recent revelations that have come to light."

With withdrawals piling up, former FTX chief technology officer Gary Wang testified that Singh - a 2017 graduate of the University of California at Berkley - knocked on the door to his bedroom in the $35 million penthouse apartment they shared with seven other FTX and Alameda employees in the Bahamas, where the exchange was based.

FTX could not process the withdrawals fast enough, and Wang testified that Singh needed his help to speed its systems up.

"I was very concerned that this might spell doom," Singh - who, alongside Wang and Ellison, pleaded guilty to fraud charges and agreed to cooperate with prosecutors - testified.

Wang, a 30-year-old MIT graduate, said Bankman-Fried asked him that day to figure out how much additional money FTX needed to satisfy customer withdrawals.

Wang ran some calculations and then told Bankman-Fried the answer: $8 billion.

"That sounds correct," Bankman-Fried responded, with a neutral demeanor, according to Wang.

Bankman-Fried then created a Signal group of executives to discuss "potential fundraising," Ellison testified. Early on Nov. 7, Bankman-Fried sent tables estimating customer funds at $12 billion, about $8 billion more than the $3.9 billion in cash FTX could pull together within a week.

In a message seen by jurors, Bankman-Fried suggested four options: call venture capitalists, send a "confident tweet thread," halt withdrawals, or reduce the values of deposits.

"What we need is a few billion USD," Bankman-Fried wrote in a document shared with the group. "We will take whatever we can get."

Later that morning, Bankman-Fried posted on Twitter, "FTX is fine. Assets are fine ... FTX has enough to cover all client holdings. We don't invest client assets (even in treasuries)."

Ellison, Wang, and Singh each testified that the post on the platform now known as X was misleading.

Testifying in his own defense, Bankman-Fried said he thought the post was accurate at the time and deleted it a day later after a plunge in the value of cryptocurrencies held by Alameda.

After posting the tweet, Bankman-Fried turned to raising capital. Can Sun, FTX's former general counsel, testified that around 1 p.m. he was asked to join a call with private equity firm Apollo, which asked to see FTX's financial statements before potentially providing emergency capital.

Sun said he was "shocked" when the spreadsheet he received showed FTX was short $7 billion. He sent it to Apollo anyway. He said Bankman-Fried later told him Apollo had asked for a "legal justification" for the missing funds.

That evening, he told Bankman-Fried there was no justification.

"Sam basically said something like, got it. He was not surprised at all," Sun testified.

There would be no bailout from Apollo. Late on Nov. 7, Bankman-Fried reached out to Zhao - whose tweet less than two days earlier accelerated the run on FTX - and struck an initial deal for Binance to acquire FTX.

"I was extremely relieved," said Ellison, a 28-year-old Stanford graduate. "If the deal went through, it would mean that all of FTX customers would get their money back."

But the deal fell through on Nov. 9. Singh, who testified that he was suicidal at the time, returned to the U.S. that day. Ellison moved back to her parents' house on Nov. 11, when FTX declared bankruptcy. Wang left the Bahamas on Nov. 16.

All three would have their first meetings with federal prosecutors by the end of the month.

Eli Lilly on Thursday reported third-quarter revenue and adjusted earnings that topped estimates on strong demand for its diabetes drug Mounjaro, but slashed its full-year profit guidance due to charges primarily related to its recent acquisitions.

Here’s what Eli Lilly reported for the third quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

  • Earnings per share: 10 cents per share adjusted vs. 13 cents loss per share expected
  • Revenue: $9.50 billion vs. $8.95 billion expected

For the quarter ended Sept. 30, Eli Lilly posted a loss of $57.4 million, or six cents a share, compared with a profit of $1.45 billion, or $1.61 a share, a year earlier. Excluding one-time items, the company posted a per-share profit of 10 cents.

Revenue jumped 37% to $9.5 billion.

Eli Lilly recorded pre-tax “in-process research and development” charges of $2.98 billion, which are primarily related to a slew of recent buyouts. That compares to charges of $62.4 million in the third quarter of 2022.

The company lowered its 2023 adjusted earnings guidance to a range of $6.50 to $6.70, from a previous range of $9.70 to $9.90 per share.

With a market cap of roughly $526 billion, Eli Lilly is the largest pharmaceutical company based in the U.S. The company’s stock has been on a tear this year, with shares up nearly 52% through Wednesday’s close. 

That’s primarily due to the company’s blockbuster diabetes drug Mounjaro and its promising lineup of obesity drugs. 

Investors have pinned high hopes on Mounjaro’s potential mega-blockbuster trajectory beyond diabetes, with some research suggesting that it may be even more effective at reducing weight than Novo Nordisk’s popular Wegovy and Ozempic injections. 

Earlier this year, Eli Lilly filed for Food and Drug Administration approval of the injection for chronic weight management.

Eli Lilly shares also got a boost by recent late-stage data from rival Novo Nordisk, which found that its obesity treatment Wegovy reduced the risk of cardiovascular events like heart attack and stroke by 20%. The results suggest that Wegovy and similar obesity and diabetes medications like those in development by Eli Lilly and others could have long-lasting health benefits beyond shedding unwanted pounds.

Eli Lilly will hold an earnings call with investors at 9:00 a.m. ET.

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