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These are bad times for Starbucks’s jet-setting new CEO and chairman, Brian Niccol. Niccol came in last month to knock the fading coffee giant back into shape, the way he did at Chipotle after it was savaged by poor management and a series of food-poisoning scandals. But Starbucks reported weaker than expected sales in its fiscal fourth quarter ending Sept. 29 and said it was suspending guidance for the next year while Niccol figures out what can be saved. Same-store sales fell by 6% in the U.S. as the number of cups of coffee (and new flavored drinks like Iced Apple Crisp Nondairy Cream Chai) fell 10%. Revenue for the quarter dropped 3% from a year earlier and adjusted earnings plummeted 24.5%. Results were worse in China, once seen as the next big growth area for the chain: China comparable store sales declined 14% in the quarter from a year earlier.

“We need to fundamentally change our strategy so we can get back to growth,” Niccol said Tuesday. He promised to slim down the menu, review pricing, change marketing strategies, and bring back the atmosphere that once drove Starbucks’s popularity. “We know they expect our stores to look and feel like the community coffeehouse they remember.”

But much of Starbucks’s margins come from drive-through-only locations and its digital rewards programs. Whatever Niccol does, it’s unlikely the company will return to its phenomenal pre-pandemic growth, which hit an annualized 14.8% over 20 years, as the Wall Street Journal reported. Still, shareholders seem to be giving Niccol room to maneuver. Share price is up 25% from the day he was appointed in August.

Elon Musk registered the corporate names United States of America Inc. and Group America LLC with the Texas secretary of state’s office in early October, Forbes reported. What’s his game plan? Donald Trump has repeatedly said he’d give Musk a cabinet position to reduce government waste and excess regulation, and Musk has dedicated $75 million to his America PAC supporting Trump. It’s quite the flip-flop for a man who said he voted for Biden over Trump in 2020. Vice-presidential candidate Tim Walz called Musk Trump’s “running mate” (that was the nicest thing he said) and the Guardian’s Blake Montgomery says Musk wants a break from all the regulators who he feels stifle his businesses, from X to SpaceX. Musk himself has said he wants to use AI-powered tools to cut back government waste and reduce the number of people who keep government programs operating. But job cuts haven’t worked out so well for Musk. Remember when he fired 80% of Twitter employees, and in the process cut the platform’s value by more than 80%? • The Daily Show’s Michael Kosta has a theory: “He’s so rich, he bought Twitter just to drive it into the ground for his own personal pleasure, and now he’s thinking, Well, what if I did the same with America?” • Musk’s gotten the attention of the G-men with his headline-grabbing offer of a daily $1 million check to a random registered voter who signs his petition to support the First and Second Amendments. CNN reports the Justice Department’s public integrity section told Musk’s America PAC that the offer may be considered an illegal inducement to get people to register to vote. But it’s not clear how well Musk’s efforts are panning out for Trump. Many of the Musk-funded campaign outreach workers who were supposed to get the vote out for Trump are sitting in coffee shops collecting paychecks instead of knocking on doors, Reuters reported, citing data from the app the campaign workers use to track their work. • On Monday the studio that made “Blade Runner 2049″ sued Musk and Tesla for copyright infringement over an image used in the RoboTaxi rollout earlier this month. Alcon Entertainment says Trump and Tesla owe them about $100,000. Last week, director Alex Proyas accused the RoboTaxi event of stealing imagery from his 2004 film, “I, Robot.” • It was a good quarter for Tesla, as the company reported Q3 net income rose 17.3% over a year ago, and car sales rose for the first time this year, to 462,890. Tesla said it made $2.17 billion from July through September, as it resorted to price cuts and low-interest financing to boost sales of its aging vehicle lineup. Musk said he expects EV sales to grow 20% to 30% next year. Shares rose 13% after hours Wednesday. • Musk got a hand up from Mark Zuckerberg, who has suspended all Meta accounts that track the jets of the rich and famous. Meta said it stopped the trackers “given the risk of physical harm” that knowledge of their travel movements could bring to Zuckerberg and his fellow plutocrats. • Musk’s sometime über-rival, Uber CEO Dara Khosrowshahi, said Musk might get the RoboTaxi to scale in five years, and then, he said, owners of robotaxi and autonomous Teslas would likely partner their fleets with Uber. “Those owners, if they want to have maximum earnings on those fleets, will want to put those fleets on Uber,” he told the Hard Fork podcast.

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• Fairytale Ending? Disney put a date on Bob Iger’s exit from his second run leading the House of Mouse: 2026. The first step was the appointment of former Morgan Stanley CEO Jamie Gorman as Disney chairman, and head of a soon-to-be-announced search committee. Iger served as CEO from 2002 to 2020, but Disney’s board sacked his successor Bob Chapek after 33 months and brought Iger back. Top candidates to replace Iger (as long as the board doesn’t extend his contract) are: television chief Dana Walden, theme parks boss Josh D’Amaro, ESPN chair Jimmy Pitaro, and studio head Alan Bergman.
• Prime Union Busting: Amazon told the National Labor Relations Board that its union-busting tactics are “protected by the First Amendment,” in a filing obtained by 404 Media. Amazon was responding to an NLRB complaint that the tactics it’s using to block unionization by delivery drivers broke the law. The complaint lists a series of union-busting statements by Amazon managers, including threats to terminate employees and promises of better benefits if they don’t unionize. In its reply, Amazon wrote: “All the statements Amazon allegedly made to employees were protected by the First Amendment to the U.S. Constitution.”
• It Doesn’t Get Better for Boeing: Even before the company’s 33,000 striking production workers rejected a new contract offer on Wednesday, the company turned in disastrous financial results this week. Boeing said it lost $6.7 billion in Q3, for a total of $8 billion since January, and has burned through $8.6 billion in cash this year. In a memo to staff, CEO Kelly Ortberg said Boeing must repair a broken culture, shrink itself and improve execution on new plane varieties. Boeing earlier said it planned to cut about 17,000 jobs, or 10% of its workforce. The strike is also taking a toll on Spirit AeroSystems, the Wichita, Kansas–based fuselage builder that Boeing spun off 20 years ago and is now repurchasing. Spirit says it will furlough 700 of the 12,000 people at its factory because of the Boeing strike. It’s built a “significant inventory” of fuselage parts since the Sept. 13 strike that halted production at Boeing’s Seattle assembly line. “It will take time to return Boeing to its former legacy, but with the right focus and culture, we can be an iconic company and aerospace leader once again,” Ortberg said. Despite the bad news, shares were actually up 1.4% over the past five days on Wednesday.
• That Old Frontier Spirit: After the Justice Department blocked JetBlue’s acquisition of Spirit Airlines in March, the troubled airline with its distinctive yellow jets is back in merger talks with its once and future fiancé Frontier Airlines. In 2022, Spirit and Frontier had reached a $2.9 billion buyout agreement that was annulled when JetBlue made a bigger offer. Spirit needs help if it is to stay aloft. It’s got $3.3 billion in debt, and a third of that comes due by the end of the year. The problem is that it hasn’t turned a profit since before Covid, and it keeps cutting routes and furloughing pilots. For Frontier, a successful merger would give it the heft to compete against the Big Three, Delta, United and American. Spirit shares jumped 46% on the news Wednesday.

• We’re Number One! The International Monetary Fund said the U.S. is the world’s strongest and fastest-growing economy, as a surge of investment, much of it from the Biden Administration’s Inflation Reduction Act, pays off in higher productivity and wages. For 2025, the IMF projects the U.S. to grow 1.9%, versus 1.7% for all advanced economies and 3.1% for the global economy. The IMF said the global economy is on track for a soft landing as the pandemic-fueled slowdown and subsequent inflation spike come to an end. “The big global inflation wave is in retreat,” IMF chief Kristalina Georgieva said. “And this has been done without tipping the global economy into recession and large-scale job losses—something which many feared we would see again.”
• Plug It In! Stellantis plans to upend the electric vehicle business in 2026, when it expects to launch a demo fleet of EVs that use solid-state batteries from U.S. startup Factorial. Solid-state batteries cut fire risk and allow for lighter, lower-cost cars that can travel farther on a single charge. But the batteries are proving tough to develop at scale. The Chrysler parent said the first new EVs will be Dodge Chargers.
• Don’t Mess With Europe: The EU’s incoming antitrust commissioner says she won’t be letting up on Big Tech, after Apple, Google, Microsoft and others were hit with billion-dollar-plus fines in Europe. “I will push for vigorous enforcement,” Teresa Ribera told EU lawmakers. She’s currently Spain’s minister for ecological transition and demographic challenge.
• Harsh Reality: Apple’s mixed-reality headset, the Vision Pro, is flailing in the market, and the company has already scaled back production and may abandon the product altogether by the end of the year, The Information reported, citing component suppliers. Part of the problem: price. Apple’s Vision Pro starts at $3,500, while Meta’s Quest 3 sells for about $500.
• Rupert Is Not Perplexed: Media mogul Rupert Murdoch, the 93-year old Australian-born inspiration for Succession’s Logan Roy, has sued Perplexity, accusing the AI-driven search engine of a “brazen scheme” to rip off the journalism of Murdoch’s media empire, including The Wall Street Journal and the New York Post, “diverting customers and critical revenue.” The lawsuit claims Perplexity is harming the brands by generating answers with false information based on content from the Post. (Hmmm…) On Wednesday, Perplexity CEO Aravind Srinavas said he wants to reach revenue-sharing agreements with news publishers. He was speaking at a Wall Street Journal event.
• Remember Denny’s? Better go now, because the 70-year-old round-the-clock diner chain is closing 150 locations, or about 10 percent of its restaurants, in 2025. Denny’s says they’re mostly in locations that have aged out of usefulness as neighborhoods have changed. On Tuesday, Denny’s reported its fifth straight quarter of year-over-year declines in same-store sales. Shares of Denny’s fell nearly 18% after the news.

Despite the Fed’s half-point cut in interest rates last month, home prices are still rising, mortgages are still pricy, and even with 1.4 million more homes on the market in September compared with a year ago, sales of existing homes fell 1% to a 14-year low. “It will take more rate cuts and more options to bring buyers back,” Jennifer Lee, a senior economist at BMO Capital Market, told Reuters.

When you get out bid on the start starter home by Blackrock...#housing #blackrock #property #starterhome #home #firsthome pic.twitter.com/rtxh1MZpzc

The sales drop may have partially reflected the one-to-two month lag between getting a mortgage and closing on a home sale, so it’s likely the data doesn’t yet account for the lower interest rates. But still, mortgage rates fell to about 6.08% on average after the Fed cut interest rates, but now they are up to 6.57% for a 30-year fixed mortgage. The big thing holding back home sales: The average rate on existing mortgages is 4%, leaving prospective homebuyers reluctant to give up their low rates. Some other data points may help explain the situation: Most of the homes sold last month were under $500,000, and houses were sitting on the market for 28 days in September, a week more than a year ago.

In its October report, Freddie Mac, the government-sponsored mortgage giant, said the housing market is showing “some signs of thawing” with the decline in mortgage rates and a slowdown in home price appreciation. And while demand is increasingly being driven by first-time homeowners eager to have their own place, they’re facing “headwinds” of affordability, supply, and the overall economy.

DETROIT (AP) — Tesla’s third-quarter net income rose 17.3% compared with a year ago on stronger electric vehicle sales, and an optimistic CEO Elon Musk predicted 20% to 30% sales growth next year.

The strong performance changed the trajectory of the year for the Austin, Texas-based company, which had seen sales and profits decline in the first two quarters.

In its letter to investors, Tesla predicted slight growth in vehicle deliveries this year, better than the 1.8 million delivered worldwide in 2023.

Tesla said Wednesday that it made $2.17 billion from July through September, more than the $1.85 billion profit it posted in the same period of 2023.

The earnings came despite price cuts and low-interest financing that helped boost sales of the company’s aging vehicle lineup during the quarter. It was Tesla’s first year-over-year quarterly profit increase of 2024, a year plagued by falling sales and prices.

Revenue in the quarter rose 7.8% to $25.18 billion, falling short of Wall Street analysts who estimated it at $25.47 billion, according to FactSet. Tesla made an adjusted 72 cents per share, soundly beating analyst expectations of 59 cents.

Shares in Tesla Inc. soared nearly 12% in trading after Wednesday’s closing bell.

On a conference call with analysts, Musk said the profit increase came despite a challenging environment for auto sales with still-high loan interest rates. “I think if you look at EV companies worldwide, to the best of my knowledge, no EV company is even profitable,” he said.

Musk qualified his prediction that Tesla would post 2025 vehicle sales growth of 20% to 30% by saying it could be changed by “negative external events.”

Earlier this month Tesla said it sold 462,890 vehicles from July through September, up 6.4% from a year ago. The sales numbers were better than analysts had expected.

The letter said that Tesla is on track to start production of new vehicles, including more affordable models, in the first half of next year, something investors had been looking for. The new vehicles will use parts from its current models and will be made on the same assembly lines as Tesla’s current model lineup, the letter said.

The new vehicles were not identified and the price was nebulous. Musk has said in the past the company is working on a car that will cost about $25,000, but said Wednesday that a new affordable vehicle would cost under $30,000 including government tax incentives.

Earlier this month, the company showed off a purpose-built two-seat robotaxi called “Cybercab” at a glitzy event at a Hollywood movie studio. Musk said it would be in production before 2027 and cost around $25,000.

By using parts from existing models and the current manufacturing system, Tesla won’t reach cost reductions that it previously expected using a new manufacturing setup.

Tesla said it reduced the cost of goods per vehicle to its lowest level yet, about $35,100.

The company’s widely watched gross profit margin, the percentage of revenue it gets to keep after expenses, rose to 19.8%, the highest in a year, but still smaller than the peak of 29.1% in the first quarter of 2022.

During the quarter, Tesla’s revenue from regulatory credits purchased by other automakers who can’t meet government emissions targets hit $739 million, the second highest quarter in company history.

Musk said Tesla's “Full Self-Driving” system is improving and would drive more safely than humans in the second quarter of next year. Despite the name, Teslas using “Full Self-Driving” cannot drive themselves, and human drivers must be ready to intervene at all times.

The company, he said, is offering an autonomous ride-hailing service to employees in the San Francisco Bay Area, but it currently has human safety drivers. It expects to start a robotaxi service for the public in California and Texas next year, he said.

Musk also conceded that it may not be possible to reach autonomous driving safety levels with older editions of “Full Self-Driving” hardware. If it can't do that, Tesla will upgrade computers in the older cars for free, he said.

The self-driving claims come just five days after U.S. safety regulators opened an investigation into the system's cameras to see in low-visibility conditions such as sun glare, fog and airborne dust. The probe raised doubts about whether the system will be ready to drive on its own next year.

The National Highway Traffic Safety Administration said in documents posted Friday that it opened the probe of 2.4 million Teslas after the company reported four crashes in low visibility conditions. In one, a woman who stopped to help after a crash on an Arizona freeway was struck and killed by a Tesla.

Investigators will look into the ability of “Full Self-Driving” to “detect and respond appropriately to reduced roadway visibility conditions."

Edward Jones analyst Jeff Windau said the earnings report and conference call showed that Tesla is making money on software, a business with high profit margins.

Still, he has a “hold” rating on the stock as the company moves toward robotics and autonomous vehicles. “They’ve got a lot of challenging goals out there,” he said.