1 big thing: Southwest plots return trip

2. Key earnings after the bell

3. HanesBrands takes a tumble

4. What's happening

5. The Punxsutawney short

Today's newsletter is 646 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed up 1.5%.

Biggest gainer? Align Technology (+27.4%), the medical device company, on strong quarterly earnings.

Biggest decliner? Air Products and Chemicals (-7.1%), the industrial gas supplier, missed expectations on earnings and revenue.

Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller.

Closer

Picture of a golden bell on a white background.

green

Catch up on the day's biggest business stories and look ahead to important trends. Led by Hope King and Nathan Bomey.

Axios Closer

1 big thing: New starter homes are nearly extinct

2. Charted: Fizzling zoom

3. What's happening

4. Carlyle deal could have lasting impact

5. What they're saying

Today's newsletter is 651 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed up 1.3%.

Biggest gainer? Skyworks Solutions (+12.5%), the semiconductor company, following quarterly earnings.

Biggest decliner? Incyte (-4.0%), the specialty drugmaker, despite beating expectations on quarterly earnings.

1 big thing: EVs' big energy challenge 

2. Charted: KFC international

4. Uber's in the fast lane

5. And so it begins

Illustration of the Netflix logo made of dollar bills.

6. What they're saying

Today's newsletter is 695 words, a 2½-minute read.

🚨 Situational awareness: Affirm shares plunged 18% in after-hours trading following a quarterly earnings miss and an announcement that it's laying off 19% of its workforce.

🔔 The dashboard: The S&P 500 closed down 1.1%.

Biggest gainer? Fortinet (+10.9%), the cybersecurity company, beat expectations in its most recent quarter.

Biggest decliner? Lumen Technologies (-20.9%), the cloud data company, following a Q4 loss and disappointing earnings guidance.

1 big thing: What gives?

2. Charted: Where jobs are booming

3. What’s happening 

4. Elon Musk makes another promise to creators

Illustration of the Twitter logo cut out of a hundred dollar bill. 

5. Global sensation attracts global deals

 Shohei Ohtani #17 of the Los Angeles Angels pitches 

6. What they’re saying

There was a lot to process today! Let's catch you up.

Today's newsletter is 625 words, a 2½-minute read.

🔔 The dashboard: The S&P 500 closed down 1.0%.

Biggest gainer? Clorox (9.8%), the cleaning products company, beat expectations for the quarter.

Biggest decliner? Gen Digital (9.6%), the cybersecurity company, following its quarterly earnings yesterday afternoon.

Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller. 

1 big thing: Black small-business owners are more optimistic

2. Charted: Where's the beef?

4. AMC is shaking up movie pricing 

Today's newsletter is 632 words, a 2½-minute read.

Situational awareness: A magnitude 7.8 earthquake has killed over 3,400 people in Turkey and Syria. (Axios)

🔔 The dashboard: The S&P 500 closed down 0.6%.

Biggest gainer? Catalent (+19.6%), the contract manufacturer, following a Bloomberg report on takeover interest from Danaher.

Biggest decliner? VF Corp. (-6.4%), the apparel company. ¯\_(ツ)_/¯

National

AMC Theatres plans to charge moviegoers different prices depending on the seats they select, mimicking a strategy already deployed by concerts, plays and games.

Why it matters: After the pandemic cratered movie ticket sales, the theater industry is looking for ways to boost revenue.

How it works: AMC announced three different tiers of seats at "participating locations":

Standard sightline: "the most common" seats, which "are available for the traditional cost of a ticket."

Value sightline: "primarily in the front row," which "are available at a lower price" than a standard sightline seat.

Preferred sightline: "typically in the middle of the auditorium and cost slightly more" than standard sightline seats.

Worth noting: The variable pricing applies only to showtimes at 4pm or later — and doesn't apply on Tuesdays, when AMC sells tickets at a discount.

Customers must be a member of the chain's free loyalty club tier to get value pricing for sightline seats, while paid members of the club can get preferred sightline seats without paying the step-up price.

AMC Theatres to charge different movie ticket prices depending on seat

Willing to sit in the front row? Your movie ticket will now be cheaper at AMC.

A glass enclosed, round movie theater box office 

AMC Theatres will charge different prices depending on the seat. Photo by Kevin Winter/Getty Images

Movies

AMC Theatres plans to charge moviegoers different prices depending on the seats they select, mimicking a strategy already deployed by concerts, plays and games.Why it matters: After the pandemic <a class="gtmContentClick" data-vars-link-text="cratered" data-vars-click-url="https://www.axios.com/pro/media-deals/2022/08/22/box-office-stalled-rebound-hurting-theaters" data-vars-content-id="0e845f25-99b5-4b76-9731-709e2eec147b" data-vars-headline="AMC Theatres to charge different movie ticket prices depending on seat" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/pro/media-deals/2022/08/22/box-office-stalled-rebound-hurting-theaters" target="_self">cratered</a> movie ticket sales, the theater industry is looking for ways to boost revenue.

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

The maybe-things-won't-be-so-bad-after-all narrative is playing out in earnings season, with a slew of major American companies remaining resilient despite fears of a downturn.

Why it matters: The recession watch has become positively obsessive as observers look for clues that the economy is growing increasingly wobbly.

The latest: Several major earnings reports on Tuesday suggest a recession may not be imminent at all:

General Motors reported fourth-quarter revenue up 28.4% and net income up 14.8%, outpacing expectations. 

UPS stock jumped 5% in early-afternoon trading after the company said it met its earnings targets despite consumers shifting from goods spending to services.

McDonald's U.S. comparable sales rose 10.3% in the fourth quarter, powered by increased foot traffic and promotions like the adult Happy Meal.

Other issues that once served as obstacles for the economy are also clearing up, such as the supply chain crisis.

Caterpillar CEO Jim Umpleby said Tuesday that the company now enjoys "the highest level of parts availability in our history."

The big picture: The resilient U.S. economy was part of the reason why the International Monetary Fund raised its global growth outlook on Monday, saying it expects growth of 2.9% in 2023, up from a previous expectation of 2.7%.

The IMF now expects the economy to rebound in 2024, with its chief economist Pierre-Olivier Gourinchas saying "a global recession is not in our baseline," Axios' Rebecca Falconer reports.

And inflation is "peaking," with 84% of countries forecast to face lower headline inflation in 2023 compared to 2022, according to the IMF World Economic update. 

Yes, but: The economy isn't exactly rock solid as the housing market has slowed down and consumers are exhausting their savings to maintain their level of spending.

“The last bastion of strength is the labor market, but I don’t think it can withstand all these other forces,” Nationwide Chief Economist Kathy Bostjancic told the Wall Street Journal.

The bottom line: The recession watch will continue, but it doesn't look like one is imminent.

Obsessive recession watch gives way to strong corporate earnings

Illustration of a giant stack of money in a briefcase

Earnings

The maybe-things-won&#x27;t-be-so-bad-after-all narrative is playing out in earnings season, with a slew of major American companies remaining resilient despite fears of a downturn.Why it matters: The recession watch has become positively obsessive as observers <a class="gtmContentClick" data-vars-link-text="look for clues" data-vars-click-url="https://www.axios.com/2023/01/18/unpredictable-consumer-spending" data-vars-content-id="1ec84e53-f906-4154-b228-5ef1b1f410f9" data-vars-headline="Obsessive recession watch gives way to strong corporate earnings" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/01/18/unpredictable-consumer-spending" target="_self">look for clues</a> that the economy is growing increasingly wobbly.

Bed Bath & Beyond is trying to take advantage of an unexpected surge in its share price Monday by announcing the sale of a new set of securities that could raise more than $1 billion.

Why it matters: The retailer is at imminent risk of filing for bankruptcy protection, a process that typically wipes out shareholder value even if the company survives.

Driving the news: Bed Bath & Beyond said it's aiming to raise the funds through an offering of convertible preferred stock and warrants.

But the deal would only raise around $225 million right off the bat — the rest would come at a later date. 

The company plans to use those initial proceeds to repay certain loans after missing a recent interest payment.

The big picture: Bed Bath & Beyond has enjoyed a sudden stock surge — its shares rose 92% on Monday to $5.86 — as retail stock traders show faith in a company that may soon tip into bankruptcy. 

With a higher stock price comes a greater ability to raise cash.

Yes, but: Shares fell 33% in after-hours trading as investors absorbed the news.

Our thought bubble, via Axios' Felix Salmon: Given the price action in Bed Bath & Beyond shares on Monday, it would almost be irresponsible for the company not to attempt this kind of hail-mary. But the chances of it succeeding remain minuscule.

What they're saying: The move is the "last roll of the dice from a company that is desperate to raise cash to provide some financial headroom to pay down debts and keep operations going," attempt to stay in business, GlobalData managing director Neil Saunders wrote in a research note on Monday.

"Many investors are likely to be deterred by the incredibly weak balance sheet, the mountain of debt, and a business that remains fundamentally broken. They will see this as throwing good money after bad. However, there may be some — in the form of the less rational meme stock crowd — who will take the bait."

Bed Bath & Beyond tries to raise funds as bankruptcy looms

The retailer is trying to take advantage of a sudden stock surge

Going out of business signs afixed to a window

"Everything on Sale" signs at a Buy Buy Baby store, a Bed Bath & Beyond brand. Photo: Stephanie Keith/Bloomberg via Getty Images

Retail

Bed Bath &amp; Beyond is trying to take advantage of an unexpected surge in its share price Monday by announcing the sale of a new set of securities that could raise more than $1 billion.Why it matters: The retailer is <a class="gtmContentClick" data-vars-link-text="at imminent risk of filing for bankruptcy protection" data-vars-click-url="https://www.axios.com/2023/01/05/bed-bath-beyond-bankruptcy" data-vars-content-id="1ee16ce5-4fe0-4d38-9a71-040c9cc394c7" data-vars-headline="Bed Bath &amp; Beyond tries to raise funds as bankruptcy looms" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.axios.com/2023/01/05/bed-bath-beyond-bankruptcy" target="_self">at imminent risk of filing for bankruptcy protection</a>, a process that typically wipes out shareholder value even if the company survives.

HanesBrands shares plunged more than 27% Thursday as the apparel maker pulled its dividend and said it would direct all of its free cash flow to paying off debt.

The big picture: The company's fourth quarter sales plummeted — a reflection of how fickle life can be for apparel companies that suddenly find themselves on the wrong side of shifting consumer preferences.

Not long ago, the company's Champion brand was electric, enjoying a resurgence in sales among America's youth.

Between the lines: HanesBrands said Thursday it's taking steps to strengthen its balance sheet after net sales fell 16% to $1.47 billion in the fourth quarter, including an 18% decline in sales of the Champion brand.

The company blamed "soft consumer demand" in the U.S. and Europe, and retailers slashing inventory. Sales of innerwear and activewear fell 19% and 16%, respectively.

In its continuing operations, the company swung from income of $68 million in the fourth quarter of 2021 to a loss of $418 million in the fourth quarter of 2022.

What they're saying: CEO Steve Bratspies said in a statement the company is taking "actions to navigate the extremely challenging environment" but has "created a clear path to improving cash flow and margins as the year progresses." 

The big picture: HanesBrands is suffering a "severe slide" in sales, indicating that the company was caught flat-footed as consumer preferences changed, GlobalData Retail managing director Neil Saunders tells Axios.

The "athleisure" trend — which had been bolstering the company — has slowed down, but not as much as HanesBrands is experiencing, Saunders noted.

"The Champion brand has taken a big tumble," he said. "It’s a really sharp reversal. It was doing fairly well, and now it’s doing extraordinarily badly."

Of note: Bratspies told investors on a conference call that "innovation is coming" for Champion: "I'm confident that it's going to continue to improve, but we have work to do this year for sure."

Threat level: With $3.66 billion in long-term debt, HanesBrands has a "very negative looking balance sheet," Saunders said.

In addition to its elimination of its dividend and focus on debt reduction, it's also planning to refinance debt due in 2024.

Worth noting: It doesn't help that certain retailers have pivoted to selling more of their own activewear brands, such as Target with its All in Motion lineup.

"Target used to sell quite a lot of Champion products," Saunders said. 

The bottom line: HanesBrands needs to deliver "improvements to operating metrics and the balance sheet," CFRA Research analyst Zachary Warring writes.

HanesBrands stock plunges as company directs all free cash flow to debt paydown

HanesBrands shares plunged Thursday as the apparel maker said it would direct all of its free cash flow to paying off debt after its sales plummeted.

Illustration of a dollar sign being sewn into a piece of fabric with a needle and thread.

HanesBrands shares plunged more than 27% Thursday as the apparel maker pulled its dividend and said it would direct all of its free cash flow to paying off debt.The big picture: The company&#x27;s fourth quarter <a class="gtmContentClick" data-vars-link-text="sales plummeted" data-vars-click-url="https://ir.hanesbrands.com/news-releases/news-release-details/hanesbrands-announces-fourth-quarter-and-full-year-2022-results" data-vars-content-id="5a4230f5-9c39-441a-8b7c-57dde977e824" data-vars-headline="HanesBrands stock plunges as company directs all free cash flow to debt paydown" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://ir.hanesbrands.com/news-releases/news-release-details/hanesbrands-announces-fourth-quarter-and-full-year-2022-results" target="_blank">sales plummeted</a> — a reflection of how fickle life can be for apparel companies that suddenly find themselves on the wrong side of shifting consumer preferences.

Bed Bath & Beyond Inc. said Tuesday that it's mapping out a "turnaround plan" as it attempts to avoid bankruptcy after raising hundreds of millions of dollars.

The company, which had about 950 locations as of November, said it's closing more locations and hopes to keep about 480 open, including 360 of its namesake stores.

Why it matters: The company has taken steps in recent days to raise money and continue cutting costs. 

Driving the news: Bed Bath & Beyond said it has begun "incremental" closures of its namesake locations and its buybuy Baby stores "in response to evolving shopping preferences." 

"The Company will continue to execute its customer-focused turnaround plans by optimizing its store footprint, investing in inventory, and pursuing infrastructure improvements," Bed Bath & Beyond said in a statement.

Bed Bath released two new store closings lists in January, which include the closure of its Harmon beauty shops.

Worth noting: The company announced Tuesday that it had completed its plan to raise $225 million in a securities sale that could also lead to it receiving another $800 million in proceeds.

The cash injection comes at a crucial time as Bed Bath & Beyond recently warned that it was considering filing for bankruptcy protection.

"This transformative transaction will provide runway to execute our turnaround plan," CEO Sue Gove said in a statement. 

What's next: The retailer also said it had "identified significant opportunities across its infrastructure and operations" to streamline costs, including supply chain and technology.

Bed Bath & Beyond closing more stores in new "turnaround plan"

The retailer said it hopes to keep about 480 stores open as it attempts to avoid bankruptcy.

A Bed Bath & Beyond store in the Brooklyn borough of New York. Photo: Stephanie Keith/Bloomberg via Getty Images

Nathan Bomey

Stories

Bed Bath & Beyond closing more stores in new "turnaround plan"

Bed Bath & Beyond tries to raise funds as bankruptcy looms

AMC Theatres to charge different movie ticket prices depending on seat

HanesBrands stock plunges as company directs all free cash flow to debt paydown

Obsessive recession watch gives way to strong corporate earnings

Newsletter editions

🛑 Netflix crackdown

💻 Zoom cutting 1,300

🍿 AMC price ploy

🚀 What slowdown?

🩲 HanesBrands plunges