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Airlines begin complex process of calling back more than 32,000 furloughed workers

Airlines will have to undo more than 32,000 furloughs as a condition for $15 billion in federal aid.

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Airline industry workers hold signs during a protest in Federal Plaza in Chicago, Illinois, on September 9, 2020.

Kamil Krzaczynski | AFP | Getty Images

U.S. airlines have begun the complicated process of calling back 32,000 workers they furloughed this fall, a condition struggling carriers need to comply with to receive $15 billion in additional federal payroll support.

The aid, included in the $900 billion coronavirus relief package Congress passed Monday night, also requires airlines to agree to keep employees on the payroll through the end of March and restore certain routes. The process is underway though President Donald Trump hasn’t yet signed the coronavirus relief bill. In a surprise request late Tuesday, he asked lawmakers to increase the amount of direct payments to families and individuals.

Bringing back more than 32,000 furloughed workers, including flight attendants, pilots and mechanics, requires restoration of security clearances and ensuring that returning workers are up to date on federally mandated training. Airlines will also have to untangle some furlough mitigation programs, such as no guaranteed pay, that were offered in exchange for maintaining medical benefits. The bill calls for airlines to provide backpay starting Dec. 1, prohibits dividend payments and caps compensation.

The aviation job cuts, mostly at American and United Airlines, began this fall after the terms of the last package, $25 billion in grants and loans, ran out Sept. 30. Delta and Southwest Airlines‘ employees escaped furloughs this year after tens of thousands of workers took buyouts, early retirement packages and temporary leave. Southwest earlier this month, however, warned close to 7,000 employees that they could be furloughed in March or April unless unions agree to pay cuts and other concessions, and Delta asked for more volunteers to take unpaid time off to help further lower costs. The aid will override at least briefly an agreement with the airline’s pilots for pay cuts in exchange for avoiding furloughs.

Labor unions have been urging lawmakers for additional aid since June and were later joined by airline executives as a meaningful rebound in travel demand didn’t materialize. Congress and the White House failed to reach a deal by the deadline and furloughs started Oct. 1, bringing U.S. airline employment to the lowest levels since 1986.

“We have taken steps to expedite payments to all furloughed team members,” American Airlines CEO Doug Parker and President Robert Isom said in staff memo on Tuesday, adding that funds should show up in their accounts on Thursday. American furloughed 19,000 employees, including nearly 8,000 flight attendants and more than 1,200 pilots. More than 900 other pilots are maintaining their medical benefits but don’t receive pay unless they can pick up trips.

Airlines are usually hesitant to furlough pilots because retraining them is costly. Without flying, they could lose currency on their aircraft and the clock was ticking.

“Luckily, the concrete hadn’t set yet,” said Dennis Tajer, a Boeing 737 captain and spokesman for the Allied Pilots Association, which represents American’s 15,000 pilots.

Employees will be brought back on the job in phases.

“We expect to continue to return employees to work in April and throughout 2021,” said a note to employees from Kimball Stone, American’s senior vice president of flight operations.

‘Temporary’ employment

The additional aid doesn’t mean airlines, or their workers, are on solid footing. A recovery in travel isn’t expected until the vaccine is widely available, so employees will likely only be called back “temporarily,” United CEO Scott Kirby and President Brett Hart warned in a note to workers before the stimulus bill passed.

“This is certainly good news for our economy, our industry, and our airline — but it’s especially good news for those who have been without a paycheck, and we can’t wait to welcome them back,” the note said.

But the United executives cautioned that they don’t expect a rebound in travel by the second quarter.

“The truth is, we just don’t see anything in the data that shows a huge difference in bookings over the next few months,” they wrote. “That is why we expect the recall will be temporary.”

Sara Nelson, president of the Association of Professional Flight Attendants-CWA, which represents 50,000 cabin crew members and was central to rallying workers and airlines for additional aid, called the United executives’ comments “inappropriate.”

“Let’s be clear: the law doesn’t say ‘temporary’ hires. It says you have to rehire everyone who is a permanent employee,” Nelson said in an interview with CNBC’s “The News with Shepherd Smith” on Monday night.

U.S. carriers are losing more than $180 million a day in December, and their pretax losses have exceeded $36 billion through September, according to trade group Airlines for America.

Successful trials of coronavirus vaccines sparked a rally in airline stocks on hopes that the public would start traveling again soon. In the current quarter, American shares are up 28%, United’ has risen 27%, Delta has gained 31% and Southwest is up 23%. Airlines even cited their role in transporting the vaccine in their pitch to lawmakers for additional aid.

Despite initial elation over the PfizerBioNTech and Moderna vaccines, those gains have faded as coronavirus cases spiked.

Airlines have seen a slowdown in bookings and weaker-than-expected revenue to end the year. A highly contagious strain detected in Britain has sparked a wave of new travel restrictions from more than two-dozen countries. Delta, Virgin Atlantic and British Airways — at New York Gov. Andrew Cuomo’s request on Monday — said they would start requiring negative Covid tests for passengers to board flights to Kennedy Airport.

Source: https://www.cnbc.com/2020/12/23/coronavirus-stimulus-gives-airlines-15-billion-to-call-back-furloughed-workers.html

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Stitch Fix shares surge as online styling service reports surprise profit

Stitch Fix shares jumped after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.

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The Stitch Fix application for download in the Apple App Store on a smartphone arranged in Hastings-on-Hudson, New York, U.S., on Saturday, June 5, 2021. Stitch Fix Inc. is scheduled to release earning on June 7.

Tiffany Hagler-Geard | Bloomberg | Getty Images

Stitch Fix shares jumped 14% in extended trading Tuesday after the online shopping and styling service reported a surprise profit for its fiscal fourth quarter.

Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in Stitch Fix’s women’s and kids’ categories. Menswear has been growing more slowly, the company said.

Consumers have been splurging on new outfits in recent months, as many head back to school and return to social gatherings. Some have also citied the need for new clothes after either gaining or losing weight during the Covid pandemic.

Here’s how Stitch Fix did compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

  • Earnings per share: 19 cents vs. a loss of 13 cents expected
  • Revenue: $571.2 million vs. $548 million expected

Net income attributable to shareholders was $28 million, or 19 cents per share, in the latest period. A year ago, it posted a net loss of $44.5 million, or 44 cents a share. Analysts had been looking for the company to book a loss of 13 cents per share.

Revenue grew to $571.2 million from $443.4 million a year earlier. That was better than analysts’ expectations for $548 million.

Stitch Fix reported nearly 4.2 million active clients, up 18% from a year earlier. The company said net revenue per active client was $505, surpassing the $500 threshold for the first time ever. Customers have been purchasing more items to keep at home, Stitch Fix said, as they have more brands and price points to choose from.

Stitch Fix defines active clients as people who either ordered a “Fix” subscription or bought an item directly from its website in the preceding 52 weeks from the final day of the quarter.

The company also said it had its lowest ever churn rate at the end of the period, meaning its customers are sticking around.

Last month, Stitch Fix finally opened up its direct-buy option, which is now known as “Freestyle,” to the public. This allows people to shop Stitch Fix for individual items of clothing, without needing to sign up for a subscription.

CEO Elizabeth Spaulding said this should help Stitch Fix grow its addressable market in the year ahead. The company’s next initiative will be to market and raise broader awareness around the offering, she said. Stitch Fix is preparing to roll out a national advertising campaign on the debut.

Early indications are that “Freestyle” is meaningfully accretive to the company’s revenue per active client metric, Spaulding told analysts on a conference call.

“Clients have agency, flexibility and choice while also experiencing a highly personalized shopping experience,” Spaulding said.

For its fiscal first quarter, Stitch Fix said it sees sales in a range of $560 million to $575 million. That’s below analysts’ expectations for $588 million.

For the upcoming fiscal year, Stitch Fix anticipates sales rising 15% or more from the prior year. Analysts polled by Refinitiv had been looking for an 18% increase.

While the entire retail industry is working through supply chain complications, Stitch Fix said it is seeing a small impact, but nothing that will hurt the business in the fall and winter months. The company said it is less reliant on Vietnam, where manufacturing has largely come to a standstill due to ongoing pandemic lockdowns in the region.

As of Tuesday’s market close, Stitch Fix shares have fallen nearly 39% this year. The company has a market cap of $3.8 billion.

Find the full press release from Stitch Fix here.

Sales for the three-month period ended July 31 also came in higher than analysts were expecting, thanks to outsized growth in Stitch Fix’s women’s and kids’ categories. Menswear has been growing more slowly, the company said.

Source: https://www.cnbc.com/2021/09/21/stitch-fix-sfix-q4-2021-earnings.html

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Earnings

Corporate Company Earnings, Find Earnings Per Share and Earnings History Online

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International: Top News And Analysis

CNBC International is the world leader for news on business, technology, China, trade, oil prices, the Middle East and markets.

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Source: https://www.cnbc.com/us-top-news-and-analysis/

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