2025-02-04 21:38

Feb 4 (Reuters) - Chipotle Mexican Grill (CMG.N) , opens new tab said on Tuesday that if President Donald Trump's proposed tariffs on Mexico go into full effect, the burrito maker would see a roughly 60-basis-point impact on its raw material costs this year. The forecast from the popular eatery — while yet a small hit — is among the first from companies that are rushing to assess any hit from these proposed tariffs. Chipotle also forecast tepid annual comparable sales growth on Tuesday, a sign that it was bracing for a hit from inflation to hurt demand for its premium burritos and bowls. Its shares fell 4% in extended trade. Chipotle, like other restaurants and fast food chains that rely on supplies from Mexico, could be handed higher costs of raw materials — including avocados — if President Trump's proposed tariffs take effect. Trump announced, and then paused for a month, tariffs on Mexico. The country accounted for about half of avocados that Chipotle serves, executives said on a post-earnings call on Tuesday. Chipotle forecast annual comparable sales growth at low to mid-single digits, which was below analysts' expectations of a 5.2% growth, according to data compiled by LSEG. The company has seen higher costs of commodities such as avocado and beef, as it looks to reinvigorate its menu by adding popular limited-time offers, including the smoked brisket and its honey chicken, in order to keep consumers interested. This is the first quarter with Scott Boatwright at Chipotle's helm. Boatwright officially became CEO in November but had been operating as interim CEO since mid-August, when Starbucks poached Brian Niccol with one of corporate America's most lucrative contracts. Boatwright said he would continue efforts at kitchen automation technology that began under Niccol, such as deploying an advanced produce slicer to all restaurants with the potential to cut labor costs. For now, the 2% price hike it made to menu prices in December is likely to carry through for the rest of the year. "If something that came up throughout the year that would be a permanent hit to the business in the form of inflation, we would consider taking price, but at this point, we feel we are covered," Chief Financial Officer Adam Rymer said. Chipotle's operating margin in the reported quarter ended Dec. 31 was 14.6%, compared with 16.9% in the preceding quarter. "I think most restaurants right now are very reluctant to take any price. But if inflation continues, I don't know that they're going to have much of a choice," said Peter Saleh, analyst at BTIG. "(Chipotle has) taken a fair amount of price over the past four or five years and they haven't really seen pushback on demand. I still think they're a good value for play for the consumer," he added. Fourth-quarter comparable sales grew 5.4%, below estimates of a 5.6% growth, while its adjusted earnings per share of 25 cents beat estimates by 1 cent. Sign up here. https://www.reuters.com/business/retail-consumer/chipotle-mexican-grill-reports-smaller-than-expected-rise-quarterly-sales-2025-02-04/

2025-02-04 21:33

Feb 4 (Reuters) - Cadbury-parent Mondelez International (MDLZ.O) , opens new tab forecast a bigger-than-estimated drop in its annual profit on Tuesday, signaling pressures from higher costs, including from surging cocoa prices, sending its shares down nearly 6% after the bell. Prices of cocoa — a key ingredient in chocolate — have increased relentlessly over the past year, forcing companies such as Mondelez to hike prices of their products. That has pushed budget-strained consumers, who were already grappling with a cost-of-living crisis, toward cheaper alternatives. Chicago-based Mondelez expects its 2025 profit to fall 10% on an adjusted basis, compared with analysts' average estimate of a 6.7% decline, according to data compiled by LSEG. "This outlook does not reflect any imposition of import tariffs by the U.S. and potential retaliatory actions taken by other countries, as the tariff and trade environment is uncertain and rapidly evolving at this time," the Oreo and Toblerone maker said. Mondelez's volumes in Europe, its largest market by revenue, fell in the fourth quarter on account of incremental price hikes. In North America, however, volumes increased following a 0.9-percentage-point reduction in prices. The surge in cocoa prices, coupled with higher transportation costs, led to a 650-basis-point decline in the company's adjusted gross profit margin to 31.5%. Mondelez reported net revenue of $9.60 billion for the three months ended Dec. 31, compared with the estimates of $9.64 billion. On an adjusted basis, it earned 65 cents per share, below analysts' estimate of 66 cents per share. Sign up here. https://www.reuters.com/business/retail-consumer/mondelez-misses-fourth-quarter-revenue-estimates-2025-02-04/

2025-02-04 20:46

Feb 4 (Reuters) - Coinbase Global (COIN.O) , opens new tab on Tuesday renewed its call for U.S. banking regulators to clarify or revise their position on banks offering cryptocurrency services as well as potentially doing tie-ups with companies in the digital assets sector. The crypto exchange's move comes amid a broader industry push to lobby lawmakers for a regulatory framework to support the sector's growth. Most traditional U.S. banks have steered clear of digital asset firms, citing lack of regulatory clarity. "For the last several years, U.S. bank regulators have unilaterally and undemocratically barred banks from offering crypto services," Coinbase Chief Policy Officer Faryar Shirzad said on social media platform X. The industry had donated millions of dollars to back Donald Trump's return to the White House, as it sought making cryptocurrency regulation a top priority for the new administration after years of enforcement actions that companies have criticized as overreach. Shirzad also sent a letter to top U.S. banking regulators, including, the Office of the Comptroller of the Currency (OCC), the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), urging them to permit banks to offer services tied to the crypto sector. The OCC declined to comment, and the Fed and FDIC did not immediately respond to Reuters' requests for comments. While crypto companies have alleged that U.S. bank supervisors have made a concerted effort to choke them off the traditional financial system, regulators have denied the claim. Last month, the U.S. Securities and Exchange Commission's new leadership created a task force to develop a regulatory framework for crypto assets. Trump, who has promised to be a "crypto president", has also named former PayPal (PYPL.O) , opens new tab executive David Sacks as his "White House A.I. & Crypto Czar". The administration is expected to reshape U.S. policy on digital currency, but U.S. bankers have so far remained cautious on cryptocurrencies. Sign up here. https://www.reuters.com/technology/coinbase-urges-us-regulators-clear-path-banks-offer-crypto-services-2025-02-04/

2025-02-04 20:43

HOUSTON, Feb 4 (Reuters) - Canadian pipeline operator Trans Mountain said it expects to see increased interest to ship on its system if the United States slaps tariffs on Canadian oil imports in a month. The pipeline, which can carry up to 890,000 barrels per day of crude from Alberta to Canada's Pacific Coast, has been about 80% utilized, with about 20% capacity available for spot shipping at more expensive rate. While exports of crude oil that flowed through Trans Mountain's pipelines represented only 9% of Canada's total crude exports, it has come in the spotlight after U.S. President Donald Trump said he would slap 10% tariffs on Canadian oil imports by the United States. The tariffs, which were due to take effect on Tuesday, were paused for 30 days on Monday. Nearly all of Canada's oil exports - some 4 million barrels per day - head to the United States to be processed by refiners or re-exported from U.S. Gulf Coast ports to Asia. The Trans Mountain pipeline expansion, which started operations in May, provided Canada an alternative route to export more volumes of crude directly, primarily to Asia, and reduced the country's reliance on the United States. "We anticipate there will be increased interest to ship on our system in the face of U.S. tariffs, but it is too early to predict what the volumes will be," Trans Mountain said in an emailed statement. Deliveries to Asia are also likely to increase, the company said, adding that deeper discounts for Canadian crude were likely. The company said it was investigating ways to improve the throughput efficiency and increase the capacity of the expanded system, ideally in the next four to five years under the current regulatory regime. Exports from Vancouver averaged about 370,000 barrels per day in the last eight months, according to data from ship tracking firm Kpler. About 51% of that headed to Asia, primarily China, in 2024, while the rest went to the United States. Sign up here. https://www.reuters.com/markets/commodities/canadas-trans-mountain-expects-more-interest-pipeline-system-if-us-implements-2025-02-04/

2025-02-04 20:42

CHICAGO, Feb 4 (Reuters) - Global grains trader Archer-Daniels-Midland (ADM.N) , opens new tab is slashing costs and cutting staff to weather a commodity downturn made more challenging by uncertainty about U.S. biofuels policies and a brewing trade war, the company said on Tuesday. ADM's difficulties follow an accounting scandal last year that forced the company to twice revise financial statements and triggered an ongoing federal investigation. ADM on Tuesday posted its weakest fourth-quarter profit in six years and forecast what could be a third-straight annual earnings drop in 2025. ADM said it is eliminating up to 700 jobs and aiming to cut up to $750 million in costs in the next three to five years, joining agribusiness rival Cargill in tightening its belt. CEO Juan Luciano said it was difficult to predict how ADM's global trading business would fare if President Donald Trump's orders to raise tariffs on Canada, Mexico and China spark broad retaliation from the top three buyers of U.S. farm goods. China launched limited tariffs on Tuesday in retaliation against sweeping new U.S. levies on Chinese goods. Beijing's tariffs did not include crops. Trump suspended the tariffs on Canadian and Mexican goods for one month. "Tariffs imposed by the U.S. government tend to have a slightly positive benefit to us," Luciano said, adding "the issue is the retaliatory measures." ADM is on a short list of grain-trading companies that can benefit from such trade turmoil, he said. If an overseas buyer curbs its imports of U.S. farm products, ADM could still supply that market with crops from other countries such as Brazil, although such disruptions can dent trading margins. ADM flexed its global grain origination and distribution footprint in 2018 when China slashed its U.S. soybean purchases, prompting the company to tap its Brazilian supply chain to supply that country. Meanwhile, ADM and other crop processors were awaiting policy guidance from the Trump administration on the size and scope of tax credits for U.S. biofuels producers that could bolster oilseed crushing and biodiesel margins, Luciano said. An ethanol pioneer and for years the top U.S. producer, ADM's massive corn- and soybean-processing facilities supply biofuels makers including Marathon. Sign up here. https://www.reuters.com/markets/commodities/adm-2025-outlook-clouded-by-trade-tensions-biofuel-policies-2025-02-04/

2025-02-04 20:34

Feb 4 (Reuters) - WEC Energy Group (WEC.N) , opens new tab said on Tuesday that its profit more than doubled in the fourth quarter, with the electric utility benefiting from lower operating expenses and higher revenue as it grows its service to data centers like Microsoft (MSFT.O) , opens new tab. U.S. power companies like Milwaukee-based WEC Energy are welcoming a rise in electricity demand from the recent proliferation of AI data centers along with the electrification of buildings and industries. WEC is planning to supply electricity to a $3.3 billion Microsoft data center campus being developed in southeast Wisconsin, as reports come in that the technology giant is buying up more land in the state. Data center power demand in the United States is expected to nearly triple in the next three years and consume as much as 12% of the country's electricity, according to a study by Lawrence Berkeley National Laboratory. WEC is planning for 1,800 megawatts of added power demand over the next five years. That plan doesn't include the development of a 1,700-acre Wisconsin data center campus, which was announced this year by Cloverleaf Infrastructure, WEC executives said on a conference call. The site, which was initially expected to amount to 1 gigawatt of capacity, may end up being much larger, WEC executives said. Construction on the site may begin in the fall, but it would likely be between 2028 and 2029 before energy begins to substantially increase to the site, WEC said. As data center development ramps up, utilities like WEC are racing to develop power agreements with terms aimed specifically at these new major customers. "We're actively working with very large customers on tariffs," WEC CEO Scott Lauber said. Residential power use rose 0.5% while electricity consumption by small commercial and industrial customers rose 0.7% in 2024, compared to a decline in 2023. The utility reported total operating expenses of $1.69 billion in the fourth quarter, a drop from $1.88 billion last year, with sales costs down about 3% to $738.4 million. Revenue for the fourth quarter rose about 3% to $2.28 billion from a year earlier. WEC provides electricity and gas to nearly 4.7 million customers in Wisconsin, Illinois, Michigan and Minnesota. Sign up here. https://www.reuters.com/business/energy/wec-energy-quarterly-profit-jumps-lower-operating-expenses-2025-02-04/