Stay Updates: Inventory Market, Goal Earnings Report and Volvo

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Credit…Brendan Mcdermid/Reuters

Target’s sales continued to climb in the fourth quarter, surpassing analysts estimates, as the retailer capitalized on the shift in consumer shopping habits to buying online and picking up their purchases in stores.

The company said on Tuesday that its sales in the fourth quarter increased nearly 21 percent, higher than the 17 percent that Wall Street expected.

The strong fourth quarter, buoyed in part by stimulus spending by consumers, caps a year of staggering growth at Target. Target reported that its sales growth for 2020 of more than $15 billion “was greater than the company’s total sales growth over the prior 11 years.”

After years of investment in its online ordering and in-store pickup services, the company has emerged as a top winner during the pandemic, gaining billions in market share from less adept retailers.

Amid such strong results in 2020, the company was also being hailed for its decision to raise its starting wage to $15 an hour last year.

“Target tops a record year with a phenomenal fourth quarter,” Molly Kinder, a fellow at the Brookings Institution, wrote on Twitter. “After — but not despite — raising its starting wage to $15/hour.”

The company did not provide guidance for the coming year. Analysts noted that it would be difficult for Target to top its growth in 2020 as other retailers are likely to see their businesses bounce back in the next few months.

Customers eager to avoid shopping in stores are using Instacart’s app-based grocery ordering service.Credit…Rosem Morton for The New York Times

Instacart, the grocery delivery company, said on Tuesday that it has raised another $265 million in a funding that values it at $39 billion, more than doubling its valuation for the second time in a year.

Andreessen Horowitz and Sequoia Capital, which are existing investors in Instacart, participated in the latest financing for the eight-year-old start-up. Over the last year, Instacart has raised two rounds of funding totaling $525 million. It was previously valued at $17.7 billion.

The pandemic has supercharged Instacart’s growth. Customers eager to avoid shopping in stores are using the company’s app-based grocery ordering service. Laid-off workers have also turned to gig-economy jobs, like Instacart shopping, to make money. Instacart now has 500,000 shoppers who work on contract.

“This past year ushered in a new normal, changing the way people shop for groceries and goods,” Nick Giovanni, Instacart’s chief financial officer, said in a statement.

Instacart has weathered criticism of its business model as it has expanded. Earlier this year, layoffs of some of Instacart’s few unionized workers prompted accusations of union busting. Grocery stores have said the app’s fees of around 10 percent have made it difficult to make a profit.

The company delivers goods from 600 retailers across 45,000 stores in the United States and Canada. It has expanded beyond groceries to include office supplies, sporting goods, prescription drugs and pet supplies from chains including Staples, Dick’s Sporting Goods, CVS and Petco.

Instacart said it planned to use the new funding to hire more employees and to expand business lines including advertising for consumer packaged goods companies and enterprise software for retailers.

In a statement, Jeff Jordan, a partner at Andreessen Horowitz, said his firm had been impressed by the way Instacart had shown resilience in the pandemic and “met the moment of 2020.”

The company has been named as a candidate to go public. In January, it appointed Mr. Giovanni, formerly of Goldman Sachs, as chief financial officer.

The Senate Banking Committee will weigh Gary Gensler’s confirmation as the S.E.C. chairman in a virtual hearing.Credit…Kayana Szymczak for The New York Times

President Biden’s picks to lead the Securities and Exchange Commission and the Consumer Financial Protection Bureau are laying out their regulatory agendas before the Senate Banking Committee.

Gary Gensler, the nominee to chair the S.E.C., and Rohit Chopra, the C.F.P.B. nominee, spoke about a number of consumer-centric topics, including transparency and accountability in the financial markets and protections for people dealing with the fallout of the coronavirus crisis.

The committee chairman, Senator Sherrod Brown, Democrat of Ohio, said both men were fitting picks to serve “at a time when so many people don’t feel like they have a voice in our economy.”

He added, “After years of allies of the largest corporations and the biggest banks running these agencies, and setting government up to fail, Mr. Chopra and Mr. Gensler are here to fight for everyone else.”

But Republicans will be challenging both nominees over their views of the limits of regulatory power. Pat Toomey, the ranking Republican, said he worried Mr. Gensler would push the bounds of the law to promote a progressive agenda including on climate change. He also described the agency Mr. Chopra was nominated to lead as “hyperactive.”

Senate Democrats told DealBook that they welcomed additional discussion on increased corporate disclosure:

  • “I’ll be carefully watching Gary Gensler’s answers on issues like climate risk disclosure, corporate diversity, and investor protection,” said Tina Smith of Minnesota.

  • Bob Menendez of New Jersey intends to ask about increased disclosure of corporate political spending, a representative said. He wants companies to reveal more about their donations and seek shareholder approval for spending.

  • Chris Van Hollen of Maryland is curious about the rules and limits on the timing and disclosure of insider stock trades.

And then there is GameStop. Mr. Brown railed against Wall Street during the meme-stock frenzy, and that episode is sure to come up on Tuesday. A representative for Jack Reed, Democrat of Rhode Island, said that he intended to ask Mr. Gensler about payment for order flow.

Cynthia Lummis, Republican of Wyoming and the first senator to invest in Bitcoin, will focus on the nominee’s commitment to “financial regulations that foster innovation,” according to a representative. Mr. Gensler, who teaches blockchain courses at M.I.T. and is also a former Goldman banker, should be game. Alluding to his job at the intersection of finance and technology, the banker-turned-regulator-turned-academic cautiously acknowledged the promise of fintech in his statement and said rules must evolve with new tools.

Republicans are also wary of Mr. Chopra, who would lead an agency whose enforcement powers had waned under President Trump.

Mr. Toomey said during Tuesday’s hearing that Mr. Chopra had been hostile to businesses in the past, including for-profit colleges. In his opening statement, Mr. Chopra focused on the challenges consumers face as the economy recovers from the coronavirus pandemic.

“Consumers continue to discover serious errors on their credit reports or feel forced to make payments to debt collectors on bills they already paid or never owed to begin with, including for medical treatment related to Covid-19,” he said.

Michelle Gass, the chief executive of Kohl’s, in 2010. A group of activist investors is demanding changes at the retailer.Credit…Elaine Thompson/Associated Press

The chief executive of Kohl’s, Michelle Gass, is standing firm against one of the main demands made by a group of activist investors that has taken a 9.5 percent stake in the retailer — selling its properties and then leasing them back.

“We don’t believe sale-leaseback is right for us right now,” Ms. Gass said in an interview on Tuesday, citing the company’s strong investment grade rating and low interest rates that allow for less-constrictive financing options.

The investors — Macellum Advisors, Ancora Holdings, Legion Partners Asset Management and 4010 Capital — revealed their stake in Kohl’s last month. They detailed a long list of complaints and demands in a letter to Kohl’s shareholders and pushed to add nine directors to the company’s 12-member board. They also pushed for sale-leaseback transactions, which they said could bring in $3 billion that the company could put to use by buying back stock.

When asked about the activists’ demands, Ms. Gass said the company would “love to find a common ground.” Adding nine seats, though, is “a control play — and that we are not supportive of,” she said.

Kohl’s said on Tuesday that it was bringing back a dividend and a stock buyback program.

The tussle at Kohl’s is notable because activist investors have recently avoided picking fights with department store chains given the broader challenges the industry faces and the rocky track record activists have had, like William A. Ackman at J.C. Penney and Starboard at Macy’s. And retailers have pushed back against the sale-leaseback strategy, which can temporarily jolt a stock price but can also leave a retailer with less flexibility in the longer term.

“I’ve seen this playbook before,” Terry Lundgren, a former Macy’s chief executive, told CNBC last month. Under Mr. Lundgren’s leadership, Macy’s resisted pressure from Starboard to do its own sale-leaseback program. Kohl’s can improve its performance “with or without outside influences from these investors or other investors,” he said.

Kohl’s on Tuesday reported earnings that topped analyst expectations. Sales still fell — from $6.54 billion to $5.88 billion, as its stores were forced to close in an effort to curb the spread of the coronavirus — but online sales jumped 22 percent and accounted for 42 percent of all total sales.

Other retailers like Target have declined to provide an outlook, but Kohl’s forecast an increase in its net sales over the year prior and an operating margin of up to 5 percent.

“We feel very confident in our guide,” Ms. Gass said.

University of Hawaii employees monitor a Board of Regents meeting via Zoom. The teleconference company’s revenue surged more than 300 percent in its fiscal year.Credit…Audrey Mcavoy/Associated Press

  • The S&P 500 was unchanged in early trading on Tuesday. On Monday, it gained 2.4 percent, the most since June. The Nasdaq and Dow Jones industrial average had jumped by the most since early November.

  • Traders are recovering from a volatile few days when a sell-off in government bonds rattled the equity market. On Monday, the rout eased but now bond yields are pushing higher again. The yield on 10-year U.S. Treasury notes rose 3 basis points, or 0.03 percentage point, to 1.45 percent on Tuesday.

  • Analysts at RBC Capital Markets said markets had been testing the central banks’ resolve to keep interest rates low globally and that policymakers would have to take action to drive this message home.

  • “However, we remain convinced that the structural upward pressure on yields remains,” they wrote in a note. “The reopening of the economies coupled with sizable fiscal spending programs and supply constraints will make it difficult for bond markets” to gain. Bond prices rise when their yields decline.

  • Shares in Zoom rose more than 6 percent in early trading after the video conferencing company said its revenue surged 326 percent in its past fiscal year to $2.65 billion.

  • Stock indexes across Europe were mostly higher. The Stoxx 600 Europe gained 0.5 percent.

  • The annual inflation rate for the eurozone was 0.9 percent in February, the same as the previous month and in line with economists’ expectations, data published Tuesday showed. “These numbers represent the calm before the storm,” Claus Vistesen, an economist at Pantheon Macroeconomics, wrote in a note. In a few months, he wrote, inflation will jump to reflect the change in energy prices over the past year.

  • Most stock indexes in Asia dropped after China’s top financial regulator said that the high leverage in the financial system needed to be reduced. Guo Shuqing said he was “very worried” about bubbles in China’s property sector and that bubbles in U.S. and European markets could burst.

Hakan Samuelsson, the chief executive of Volvo Cars, at an auto show in 2018. He said on Tuesday that Volvo’s electric models would be sold exclusively online.Credit…Pierre Albouy/Reuters

Volvo Cars said it would convert its entire lineup to battery power by 2030, phasing out internal combustion engine vehicles faster than other automakers like General Motors.

Volvo, based in Sweden and owned by Geely Holding of China, has been ahead of larger rivals in converting to electric power. In 2019, all the models it sold were either hybrids or ran solely on batteries.

By 2030, Volvo will “phase out any car in its global portfolio with an internal combustion engine, including hybrids,” the company said in a statement on Tuesday.

Hybrids have better fuel economy than conventional vehicles, but they may not be much better for the climate or for urban air quality if drivers do not use the electric capabilities.

G.M.’s promise to sell only emission-free vehicles, which it made in January, does not take effect until 2035.

Volvo acknowledged that it was responding in part to pressure from governments, many of which have announced bans on internal combustion engines in coming years.

The company said its decision was based “on the expectation that legislation as well as a rapid expansion of accessible high quality charging infrastructure will accelerate consumer acceptance of fully electric cars.”

In another break from industry practice, Volvo’s electric models will be sold exclusively online, bypassing dealers.

“Instead of investing in a shrinking business, we choose to invest in the future — electric and online,” Hakan Samuelsson, the chief executive of Volvo, said in a statement.

Amazon has posted signs in its fulfillment center in Bessemer, Ala., and held meetings with workers, urging them not to unionize.Credit…Wes Frazer for The New York Times

A unionizing campaign that had deliberately stayed under the radar for months has in recent days blossomed into a star-studded showdown to influence the workers.

On one side is the Retail, Wholesale and Department Store Union and its many pro-labor allies in the worlds of politics, sports and Hollywood. On the other is one of the world’s dominant companies, an e-commerce behemoth that has warded off previous unionizing efforts at its U.S. facilities over its more than 25-year history: Amazon.

The attention is turning this union vote into a referendum not just on working conditions at Amazon’s warehouse in Bessemer, Ala., which employs 5,800, but on the plight of low-wage employees and workers of color in particular, Michael Corkery and Karen Weise report for The New York Times. Many of the employees in the Alabama warehouse are Black, a fact that the union organizers have highlighted in their campaign seeking to link the vote to the struggle for civil rights in the South.

The warehouse workers began voting by mail on Feb. 8 and the ballots are due at the end of this month. A union can form if a majority of the votes cast favor such a move.

Amazon’s countercampaign, both inside the warehouse and on a national stage, has zeroed in on pure economics: that its starting wage is $15 an hour, plus benefits. That is far more than its competitors in Alabama, where the minimum wage is $7.25 an hour.

“It’s important that employees understand the facts of joining a union,” Heather Knox, an Amazon spokeswoman, said in a statement.

The situation is getting testy, with union leaders accusing Amazon of a series of “union-busting” tactics.

The company has posted signs across the warehouse, next to hand sanitizing stations and even in bathroom stalls. It sends regular texts and emails, pointing out the problems with unions. It posts photos of workers in Bessemer on the internal company app saying how much they love Amazon.

Thermal scanners check every visitor to the Student Union Building at the University of Idaho in Moscow, Idaho. So far, only 10 people have been turned away and instructed to get a coronavirus test.Credit…Rajah Bose for The New York Times

The University of Idaho is one of hundreds of colleges and universities that adopted fever scanners, symptom checkers, wearable heart-rate monitors and other new Covid-screening technologies this school year. Such tools often cost less than a more validated health intervention: frequent virus testing of all students. They also help colleges showcase their pandemic safety efforts.

But so far the fever scanners, which look like airport metal detectors and detect skin temperature, have flagged fewer than 10 people out of the 9,000 students living on or near campus, Natasha Singer and Kellen Browning report for The New York Times. Even then, university administrators could not say whether the technology had been effective because they have not tracked those students to see if they went on to get tested for the virus.

One problem is that temperature scanners and symptom-checking apps cannot catch the estimated 40 percent of people with the coronavirus who do not have symptoms but are still infectious. Temperature scanners can also be wildly inaccurate.

Administrators at Idaho and other universities said their schools were using the new tech, along with policies like social distancing, as part of larger campus efforts to hinder the virus. Some said it was important for their schools to deploy the screening tools even if they were only moderately useful. At the very least, they said, using services like daily symptom-checking apps may reassure students and remind them to be vigilant about other measures, like mask wearing.

Some public health experts said it was understandable that colleges had not methodically assessed the technology’s effectiveness against the coronavirus. After all, they said, schools are unaccustomed to frequently screening their entire campus populations for new infectious diseases.

Even so, some experts said they were troubled that universities lacked important information that might help them make more evidence-based decisions on health screening.

“It’s a massive data vacuum,” said Saskia Popescu, an infectious-disease epidemiologist who is an assistant professor at George Mason University. “The moral of the story is you can’t just invest in this tech without having a validation process behind it.”

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