Business
Pepsico Cuts Growth Forecast Amid Tariffs and Slowed Consumer Spending
Consumers, worried about the economy, are pulling back on their spending, and that anxiety is translating into lower sales and profits for some of the country’s largest consumer-oriented companies.
On Thursday, PepsiCo cut its full-year guidance outlook, citing a reduction in consumer spending as well as the impact the company is feeling from increased global tariffs.
“Relative to where we were three months ago, we probably aren’t feeling as good about the consumer now,” Jamie Caulfield, the chief financial officer of PepsiCo, told Wall Street analysts and investors on an earnings call Thursday morning.
The company, which manufactures Pepsi and Gatorade drinks as well as popular snacks like Doritos and Cheetos, cut its profit forecast for the full year to flat from its earlier guidance that expected earnings growth to be in the mid-single digits. It reported a decline of 1.8 percent in revenue, to $17.9 billion, for the quarter that ended March 22, and a drop of 10 percent in net income, to $1.8 billion, from a year earlier.
PepsiCo’s stock fell more than 4 percent, to $136, by early afternoon.
Comments made on PepsiCo’s earnings call echoed what executives at other consumer companies have said in recent days about how apprehension in the global economy is key to less consumer spending. The pullback has started to weigh on some companies’ revenues and dampen their outlook for the coming months, especially as they try to calculate the costs they’ll incur from the Trump administration’s new or increased tariffs on imported goods.
At Chipotle, same-store sales fell for the first time since 2020 in the most recent quarter, the chain reported this week. Uncertainty about the path forward for the U.S. economy started to affect spending in February, the company said, shortly after President Trump’s inauguration — a trend that continued into April.
“It was all around this idea of saving money, economic uncertainty — they’re eating at home more frequently than they’re eating out,” Scott Boatwright, the burrito chain’s chief executive, said when asked about consumer behavior. The underlying trend, he added, is “really tied to the consumer sitting on the sideline.”
Chipotle also lowered its full-year guidance. Beyond sluggish consumer spending, the chain said it expected Mr. Trump’s tariffs imposed in April — a broad 10 percent duty on many imports and tariffs on aluminum — to raise the company’s food, beverage and packaging costs this year.
Another signal of distress among shoppers: Consumers are doing less laundry to scale back on detergent purchases, an executive from Procter & Gamble, which makes household staples like Tide detergent, told Yahoo Finance.
On Thursday, P.&G. cut its full-year outlook and said whiplash on tariff policy had factored into a “pause” in consumption as consumers also tried to make sense of stock market volatility and job market uncertainty, said Andre Schulten, the company’s chief financial officer.
Signs that economic concerns are starting to affect consumer spending are appearing in the airline industry, too. American Airlines pulled its full-year guidance on Thursday, mirroring a move last month from Delta Air Lines. Robert Isom, the chief executive of American Airlines, told CNBC on Thursday that domestic leisure travel “fell off considerably” starting in February.
The most recent survey from the Conference Board showed consumer confidence tumbling in March to its lowest level since January 2021. Americans are increasingly anxious about their jobs and finances, the business group reported.
Hoping to entice consumers who are tightening wallets, executives at PepsiCo said it was offering less expensive, under $2, individual bags of snacks along with smaller snack packs in stores.
PepsiCo said it had calculated into its lower profit estimates the higher costs associated with the tariffs. “We also factored in some of our mitigation plans, some we will be able to execute more quickly than others,” Mr. Caulfield said on the call on Thursday.
Analysts had been keeping a close eye on the impact that tariffs would have on the food and beverage industry, specifically a 25 percent tariff on imported aluminum.
And while Wall Street analysts have been watching for potential fallout of the Trump administration’s trade wars on sales of American brands in key international markets, specifically Europe and China, PepsiCo said its global markets performed well in the first quarter.
In the United States, the popularity of using Ozempic and other weight-loss drugs has curbed sales for snacks and shifted purchases to smaller portions, Ramon Laguarta, the chief executive of PepsiCo, told analysts.
PepsiCo is also navigating demands by Health Secretary Robert F. Kennedy Jr. This week, Mr. Kennedy declared that “sugar is poison” during a news conference and said he had “an understanding” with major food manufacturers to remove petroleum-based food colorings from their products by the end of 2026.
Mr. Laguarta said that PepsiCo had been an industry leader in reducing sodium and sugar in products and that more than 60 percent of its business was from products with no artificial colors. In the next few years, he added, the company will have “migrated all the portfolio into natural colors or at least provide the consumer with natural color options.”
Business
Angry Ferrari fans say the Italian company’s new EV is too Californian
Ferrari’s first-ever fully electric vehicle triggered some fans who said it looks more like an iPhone than an Italian supercar.
The $640,000 Ferrari Luce, which was unveiled on Wednesday, looks like a distant relative of many Apple products. It was built with the help of Jony Ive, the person who designed the look and feel of the Cupertino company’s iPhone, iPod and Macintosh through 2019.
“Legend has it that if you pull the Ferrari badge off the side of the new Luce you see an Apple logo underneath,” one user wrote on X.
A meme circulated portraying the Luce with iPhone applications photo-shopped onto the top, and another showing the car upside down and plugged into an iPhone charger.
To accommodate more batteries and seats, the new EV is bigger and boxier than most classic Ferraris. Ive’s design firm, LoveFrom, which he started in San-Francisco after leaving Apple, was brought in to try to meld the traditions of Ferrari with the new functionality and form allowed by a battery-powered engine.
In a marketing video, Ferrari’s chief design officer, Flavio Manzoni, said he sees the Luce “acting as a bridge between San Francisco and Maranello,” the northern Italian city where Ferrari is headquartered.
The four-door, five-seat car comes onto the scene at a difficult moment for electric vehicles, an industry that has been battered by President Trump’s policies.
Trump has cut EV incentives for manufacturers and customers, prompting several major automakers to move away from EV efforts and focus on gas-powered options.
A luxury EV effort from Sony and Honda, a high-tech vehicle dubbed Afeela, was shut down before it ever hit the road due to Honda paring back its EV offerings.
Legacy automakers such as Ferrari face a particularly difficult landscape for launching an EV, as die-hard fans are attached to traditional, gas-powered models.
Ferraris are known for roaring engines and bold, angular designs, a far cry from the smooth, rounded exterior of the Luce.
To be sure, aggressive redesigns often attract ridicule. The early electric Mustang models were shunned by some but have become popular.
One X user posted a meme with a photo of fictional Italian gangster Tony Soprano saying, “I don’t want any California bulls—.”
The online launch page for the car emphasizes that the Luce is “100% Ferrari.”
Still, Luca di Montezemolo, Ferrari’s former chairman, told reporters on Tuesday that the automaker is “risking the destruction of a legend.”
Ferrari shares have fallen about 8% since the launch of the Luce, signaling investors’ concerns that the car won’t resonate with customers.
Business
Donald E. Newhouse, newspaper publisher and heir to media empire, dies at 96
NEW YORK — Donald E. Newhouse, president of one of the largest family-controlled publishing companies in the nation and a former board chairman of the Associated Press, died Tuesday. He was 96 and died at his home in New Jersey, his family said.
During his career, Newhouse served as president of the Star-Ledger in Newark, N.J., and head of Advance Publications’ newspaper group, which he navigated into the internet age.
“You reveled in his company. He filled you with energy and humor when you felt doubtful and weak,” said Anna Wintour, the global editorial director of Vogue and Conde Nast’s chief content officer.
“He was scrupulous about not interfering in editorial business, but if you turned to him for counsel, he invariably offered judicious advice,” she said in an obituary released Tuesday night by the Newhouse family.
Newhouse, who lived in New York, spent nearly 50 years overseeing the 35 newspapers of Advance Publications, the media business started by his late father, Samuel Irving Newhouse Sr., in 1922. His older brother, S.I. Newhouse Jr., was chairman of the company and oversaw Conde Nast magazines. He died in 2017.
Louis D. Boccardi, retired president and chief executive of the AP, said Newhouse was an extraordinary chairman for the cooperative.
“His voice was never the loudest in the room, but it was often the wisest,” Boccardi said. Newhouse was instinctively private, but behind that, Boccardi said, was a generous man, at home anywhere and curious about everything.
“He could come across as self-effacing and deferential, but in Don’s skilled hands those were qualities that made him an enormously strong and effective leader,” Boccardi said. “You don’t often see the adjective ‘warm’ attached to a titan of industry, but it applied to him.”
A man who didn’t chase the spotlight
Newhouse, born in 1929, was known for staying out of the public eye. A reporter once asked him to list the biggest chances he took in his career. The answer: “Inviting your questions.”
The usually reserved Newhouse did step into the spotlight when he took on the role of chairman of the Newspaper Assn. of America from 1993 to 1994 and then chairman of the AP board of directors from 1997 to 2002. He had served on the AP board for nine years before becoming its chairman.
“He was a smart and shrewd businessman but as thoughtful and kind a man as you’ll find. Being in his presence was always a joy,” said Doug Clifton, editor of one of Newhouse’s papers, the Plain Dealer in Cleveland, from 1999 to 2007.
Newhouse attended Syracuse University but never graduated, heading into the family’s newspaper business instead. He would regularly visit his newspapers but left the ultimate authority of running them to his publishers.
“Each of our newspapers operates independently, with publishers who are strong, who set policy for their individual organizations and who have the authority and responsibility of carrying out the policies they set,” he said in 1993 when taking over as chairman of the newspaper association.
Newhouse was known for spending money to make sure that papers got the best stories. Jim Willse, editor of the Star-Ledger in Newark, N.J., from 1995 until 2010, said he would give “us all the resources we needed to make the Ledger really special.” Willse said Newhouse loved newspapers and newspaper people.
“He especially enjoyed it when we’d have a story about some politician caught with his hand in the cookie jar, or a spicy feature about stuffed shirts behaving badly,” Willse said.
Newhouse’s philosophy of spending money to produce quality coverage and a hands-off approach toward his editors led to many successes, including multiple Pulitzers.
Many of those newspapers were able to thrive and remain profitable because they dominated their market, but Newhouse said he was very much aware of what he called the “dramatically changing media landscape” and how people get their news.
“The 15th-century revolution was epitomized by the printing of the Gutenberg Bible; ours by Ted Turner’s cable news network and by web-based news sites — news in real time from anywhere to everywhere,” he said in 2004 at the rededication of a communications school named after his father at Syracuse University.
Three years later, he told one of his papers, the Post-Standard of Syracuse, N.Y., that newspapers can survive “by producing content that is relevant, interesting, accurate and entertaining for newspapers and the internet.”
He steered through financial struggles
Yet the papers did ultimately struggle financially.
Advance was known in the industry for a pledge that employees who weren’t in a union would have jobs regardless of economic downturns or technological advances. In 2009, the company announced that the pledge would be withdrawn.
The company also moved away from daily publishing of several papers. In 2012, it announced that the Post-Standard; the Times-Picayune in New Orleans; the Patriot-News in Harrisburg, Penn.; and the Birmingham News, the Press-Register of Mobile and the Huntsville Times, all in Alabama, would cease daily publication and would only offer print editions on Wednesdays, Fridays and Sundays. Those changes were accompanied by hundreds of layoffs.
“His conservative approach left both the papers and its employees somewhat unprepared for the realities of the internet,” said Thomas Maier, who wrote a 1994 biography of the family.
Newhouse’s eldest son, Steven, spearheaded the company’s growth on the internet and on mobile devices. Steven Newhouse is currently co-president of Advance Publications.
“My dad spent his life in the newspaper business and was devoted to it, built it up and enjoyed many good years. When it became more challenging, he was first in line to work through, finding solutions to keep the local journalism franchise going,” he said.
Newhouse is also survived by another son, Michael, daughter Katherine Mele and grandchildren. His wife, Susan, died in 2015.
Mayerowitz writes for the Associated Press.
Business
Child safety groups want FTC to investigate Roblox
Child safety advocates say the massively popular gaming platform Roblox could be bad for kids.
Fairplay and the National Center on Sexual Exploitation have requested the Federal Trade Commission to investigate if the games on Roblox are designed to make kids spend an unhealthy amount of time and money on their screens.
Roblox’s core users are young kids.
In a letter submitted to the FTC, the groups argue that Roblox’s engagement-maximizing design features, virtual currency system, and voice and text chat communication features are inappropriate for the platform’s user base and pose a substantial risk of harm.
“Alone and in combination, these three components capitalize on young users’ developmental vulnerabilities, exploit their desire for authentic self-expression, monetize their lack of impulse control, and turn in-game purchasing power into a form of social status,” the groups noted in the letter submitted Thursday to the FTC.
Roblox allows the purchase of virtual assets — clothing and dance moves, for example — which can only be purchased with the platform’s in-game currency, Robux. The platform obscures the exchange rate between dollars and the in-game currency, leaving young players to navigate a complex system of fluctuating conversion rates that increases the amount of real-world money players spend, according to the letter.
For instance, players can receive more Robux per dollar by purchasing larger bundles of currency or buying a “Roblox Premium” subscription, making it harder for children to perform financial calculations on how much they are spending on the platform.
The letter pointed to instances of unexpected Roblox charges, as one parent discovered that his daughter spent more than $5,000 on Roblox without understanding that she was spending real money.
The letter also outlined examples of “scarcity marketing” techniques that increase demand through limited-quantity assets and time-based reward to drive sales of virtual items, driving a false sense of urgency. Some see it as a strong-arm sales technique that should not be used on children:
“Items only available for a limited time encourage both rapid purchases and returning to the platform frequently — sometimes multiple times per day — to avoid missing out on items,” the letter said.
A Roblox spokesperson said that the company “strongly disputes these claims. Our platform is designed to provide a positive, healthy and enjoyable experience — we build for fun and connection, not short-term engagement. While no system can be perfect, we have a set of safeguards designed to support a safe and civil environment, and clear policies for game creators that require fair treatment of players.”
The groups pointed out that third-party games developed on Roblox are designed to profit from in-game purchases, and have “gambling-like” engagement mechanisms such as lootboxes, in which players cannot see what’s inside until after they have purchased it — and the items vary in value.
“We have clear policies prohibiting both actual and simulated gambling, and a set of rules governing how game creators can use gameplay mechanics like paid random items,” the Roblox spokesperson said. “Most games on Roblox are free to play and no one is required to purchase Robux. In the first quarter of 2026, only 1.4% of our 132 million daily active users were payers on the platform.”
The letter also alleged that the voice and text chat features on the platform expose children to sexual content, and argue that recent changes to age checks have not eliminated opportunities for adult-minor contact.
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