American Eagle on Wednesday said it’s making gains in boosting profitability as it works to improve its product assortment and tweak operations. Still, its fiscal first-quarter sales came in weaker than Wall Street expected. 

While revenue came in slightly below estimates, it was 6% higher than the year ago period and marked a new record for the company, it said in a news release. 

Shares fell about 5% in extended trading on Wednesday.

Here’s how the apparel company did compared with what Wall Street was anticipating, based on a survey of analysts by LSEG:

The company’s reported net income for the three-month period that ended May 4 nearly quadrupled compared to the year ago period. American Eagle posted net income of $67.8 million, or 34 cents per share, compared with $18.5 million, or 9 cents per share, a year earlier. 

Sales rose to $1.14 billion, up about 6% from $1.08 billion a year earlier.

American Eagle said its continuing to expect full-year operating income in the range of $445 million to $465 million, reflecting revenue growth of up 2% to 4% compared to the prior year. That’s slightly below estimates of up 3.4%, according to StreetAccount. 

Finance chief Mike Mathias told CNBC that American Eagle is maintaining a “cautious” view for the back half of the year as it prepares to lap some tougher comparisons, awaits interest rate decisions from the Federal Reserve and prepares for “noise” around the upcoming presidential election. 

He added the company is waiting to see how the back-to-school shopping season goes to get a better idea on how the rest of the year plays out. 

For the current quarter, American Eagle expects operating income in the range of $95 million to $100 million, reflecting revenue growth of high single digits, which is in line with the 7.4% uptick that analysts had expected, according to LSEG. 

The apparel company, which runs its namesake banner and intimates brand Aerie, is in the midst of a new strategy to boost growth. It’s looking to grow sales by 3% to 5% each year over the next three years and get its operating margin to about 10%.

Some of its efforts are beginning to bear fruit. During the fiscal first quarter, American Eagle grew its gross margin by 2.4 percentage points. The gains were driven by better inventory management, lower product and transportation costs and leverage on expenses including rent, delivery and distribution and warehousing. 

American Eagle’s strategy has also focused on revamping its product assortment, removing items that weren’t working for its customers and drilling down on the categories that are resonating. 

Jennifer Foyle, American Eagle’s president and executive creative director, told CNBC that the company was just “over-skued” — meaning it had too many different individual products, often referred to in the industry as SKUs, for consumers to choose from. 

“We knew we could do more with less,” said Foyle. “So deeper investments in our bottoms but less SKUs so that we are servicing our customer on the fits that they’re demanding from us.” 

The company has also been working to revamp its stores and introduce new formats. It recently implemented a new store design for American Eagle, which is “outpacing the balance of the chain,” said Foyle. 

“We’re excited about remodeling our stores with a new feeling for the brand that I think expresses exactly what we’ve been up to,” said Foyle. “The customer, obviously is loving what they see in that store design based on the results.”

Shares of U.S. Cellular popped nearly 6% Tuesday after T-Mobile announced that it plans to acquire most of the company, including the wireless operator’s stores, some of its spectrum assets and its customers in a deal worth $4.4 billion.

The deal includes cash and up to $2 billion of debt, according to a press release from T-Mobile. Up to $100 million of the deal’s cash portion depends on certain financial and operating metrics being met between its signing and closing, according to a separate press release from U.S. Cellular.

Shares of T-Mobile were up more than 1% during Tuesday’s session.

T-Mobile will acquire about 30% of U.S. Cellular’s wireless spectrum as part of the deal, according to the U.S. Cellular release. It plans to use that to improve coverage in rural areas while offering better connectivity to U.S. Cellular customers around the United States, the two companies announced. The company said it will allow U.S. Cellular customers to keep their current plans or switch to a T-Mobile plan.

Both companies said that U.S. Cellular will retain 70% of its wireless spectrum and towers and will lease space on at least 2,100 additional towers to T-Mobile. The deal will also allow T-Mobile to sign new long-term leases on at least 2,015 U.S. Cellular-owned towers and extend existing leases on about 600 others, U.S. Cellular said in its release.

This will give U.S. Cellular customers a “strong anchor tenant” for at least 15 years after the deal’s close, the company said.

The news follows T-Mobile’s $1.35 billion acquisition of Ka’ena, the parent company of Mint Mobile. The U.S. Federal Communications Commission approved that deal in April. T-Mobile merged with Sprint in 2020 in a deal worth $26 billion.

The Wall Street Journal reported earlier in May that T-Mobile and Verizon were in talks to “carve up” U.S. Cellular’s wireless spectrum but said a deal with Verizon on a separate transaction could take longer or fall through.

The companies expect the deal to close in mid-2025.

The business world is increasingly banking on artificial intelligence to be the next big thing, and has found itself turning to one maker of computer chips in particular — Nvidia — to power the revolution.

On Tuesday, Nvidia shares were up another 5%, leading the Nasdaq stock index, which represents technology firms, to a new all-time high. Over the past 12 months, Nvidia shares are up some 180%.

What makes Nvidia so special?

Founded in 1993 — famously, over a meal at Denny’s — Nvidia designs a special kind of programmable computer chip.

For decades, Intel and Advanced Micro Devices had dominated the U.S. chip sector.

But those companies specialized in producing CPUs — central processing units, which serve as the foundation for basic computing and software processes.

Nvidia, meanwhile, specialized in graphics processing units (GPUs). As their name suggests, GPUs are better able to render images, which meant that they were first associated with video and computer games.

But it turns out GPUs are also able to perform calculations concurrently in a way that regular CPUs cannot — making them more energy efficient and better able to handle sophisticated computing demands.

Over time, the other big chip makers began manufacturing their own GPUs to compete — but Nvidia, having enjoyed a first-mover advantage in the space, was where companies began to turn to for GPU needs.

It combined its chips with a suite of accompanying software that programmers simply preferred. Plus, its supply chain allowed it to produce GPUs in larger volumes, faster, and more reliably, than its rivals.

For instance, auto companies began turning to Nvidia chips for use in driver-assistance software that must process image information from sensors.

Nvidia hardware is now found in all Tesla vehicles.

Still, until 2020, Intel was a larger company by market capitalization than Nvidia.

Pandemic surge turns into AI revolution

During the pandemic, the shift to remote work and subsequent demand for data centers that could enable cloud-based computing — plus even more interest in video games while everyone was stuck indoors — accelerated Nvidia’s revenues even further.

Then Silicon Valley, led by OpenAI, began to realize the potential of artificial intelligence to transform how all companies do business.

The Nvidia ecosystem, from its software to its sourcing of materials, allowed it to position itself as the go-to source for companies that needed massive computing power to handle their AI needs.

Nvidia’s fortunes have since gone stratospheric: Today, it is worth nearly $3 trillion according to its current stock price — nearly as much as Apple.

Company co-founder and CEO Jensen Huang acknowledged in an interview with CNBC last year that a combination of luck and skill has led to the company’s success.

“We just believed that someday something new would happen, and the rest of it requires some serendipity,” Huang said. “It wasn’t foresight. The foresight was accelerated computing.”

Today, virtually every major tech company, including Amazon, Google, Meta, Microsoft and Oracle, has made use of Nvidia chips.

Bloomberg News has called Nvidia’s chips the “workhorse for training AI models,” and PNC Financial Services Group analyst Amanda Agati described Nvidia’s lead in the category last fall, based on its valuation, as a “quasi monopoly.”

For Moody’s Senior Vice President Raj Joshi, Nvidia represents the “dominant” infrastructure player behind the current rise of the AI sector.

While other chip designers continue to work to catch up to Nvidia, the company’s three decades’ worth of GPU specialization — represents a massive advantage, he said.

“This emerging field [AI] is better supported by GPUs,” Joshi said in an interview with NBC News, adding: “Nvidia is providing the foundation for it in most cases.”

Nvidia also offers solutions for other sectors, like health care, that are not specifically tech-oriented, Joshi said.

“They have a big lead in these markets,” he said.

Nvidia’s specialization means it is able to charge a premium for its products. In fact, its chips, which are manufactured in Taiwan, are so unique that companies looking to build AI capabilities are complaining that there is a shortage of them.

While the Biden administration’s 2022 CHIPS and Science Act is designed to spur development of GPUs — and do so on U.S. shores — there is already concern about keeping up with market forces.

“The volume of chips that [AI companies] project they need is mind-boggling,” U.S. Commerce Secretary Gina Raimondo said this week. She suggested even more federal subsidies would be needed if the U.S. hoped to be a meaningful player in chip manufacturing.

“I suspect there will have to be — whether you call it ‘CHIPS Two’ or something else — continued investment if we want to lead the world,” Raimondo said during a virtual appearance at an Intel event. “We fell pretty far. We took our eye off the ball.”

In the meantime, investor interest in Nvidia remains frenzied. While some have speculated that its success could be a bubble, many Wall Street analysts say its financial statements have been proof that its product is viable.

“The health of their core data center business is genuinely stunning,” Goldman Sachs’ Tony Pasquariello wrote in a note to clients Friday.

Because it is now so much more valuable, Nvidia’s financial results carry greater weight for major stock indices, acording to Agati, who is chief investment officer and managing executive for investments at PNC.

In other words as Nvidia goes, so goes the stock market.

“[Nvidia] has become critical to the market’s path forward,” Agati said in an email to NBC News, adding: “In the saying ‘data is the new oil,’ Nvidia continues to prove it is in a league of its own.”

Nearly six months since McDonald’s opened its first CosMc’s location, the hours-long drive-thru lines have died down, but the chain is just getting started.

The burger giant created the spinoff using one of its lesser-known McDonaldland mascots, CosMc, an alien who loves McDonald’s cheeseburgers. While unveiling CosMc’s at an investor event in December, McDonald’s CEO Chris Kempczinski said the company set out to create a brand that could sell customizable drinks and coffee popular in the afternoon segment to attract younger consumers.

The new brand rollout comes as beverages are increasingly “looked at now as part of that snack area — more affordable, indulgent and perhaps even a healthier treat,” said Katie Belflower, an editor at restaurant research firm Technomic. “It’s a good profit margin for restaurants. With beverages, you can get really creative, without necessarily having the product lines that you would have to invest in with food.”

Since opening the initial location in the Chicago suburb of Bolingbrook, McDonald’s has opened three more CosMc’s restaurants, all in Texas. For now, the chain is planning to open 10 locations by the end of this year for a test run, with all but one located in the Lone Star State.

In another sign of the new brand’s expansion, it will launch its own mobile app and loyalty program, called CosMc’s Club, on Tuesday. Customers can use the app to place orders that they pick up either inside the restaurant or in the drive-thru lane. And loyalty program members earn 10 points for every dollar they spend; once they rack up 400 points, they can redeem them for $2 rewards.

While the long-term fate of CosMc’s is still too soon to tell, the gamble could pay off for McDonald’s even if the spinoff never makes it past the 10-location test phase. The app and loyalty program will give the chain even more consumer insight.

“The cost of doing this, to McDonald’s, is a rounding error. Even if they shut them all down six months from now, they still learn some things. Sometimes the learnings can be more valuable than you might imagine they would be,” Mark Kalinowski, restaurant industry analyst and chief executive of Kalinowski Equity Research, told CNBC.

At McDonald’s December investor presentation, Kempczinski downplayed the short-term effect of CosMc’s.

“Let me emphasize again, we’re talking about 10 stores,” he said at the event. “The big story isn’t about CosMc’s, per se. The big story is what it says about McDonald’s and our potential.”

But for many consumers, CosMc’s was the headline. When the first location opened days later in Illinois, eager customers waited for hours in drive-thru lines that dragged around the shopping center for the chance to buy McPops and Churro Frappes.

Weeks later, the buzz had started dying. According to Intouch Insight, the average wait time from entering the CosMc’s drive-thru line to reaching the speaker to order was 11 minutes and 13 seconds, based on visits from mystery shoppers in January and February. But the average service time, after ordering, was just four minutes and one second, trailing the industry benchmark by just six seconds.

On a Monday afternoon in May, there was no line for this CNBC reporter to reach one of the four drive-thru intercoms to place an order.

Investors’ interest has also cooled as other parts of McDonald’s business draw more attention.

“Six months ago, there was a lot of curiosity, but now that you’ve seen McDonald’s same-store sales decelerate, that’s where my clients’ focus is,” Kalinowski said.

In the first quarter, McDonald’s reported U.S. same-store sales growth of 2.5%, a slowdown as price increases fade and diners pull back their restaurant spending.

From the outside, the CosMc’s location in Bolingbrook isn’t much to look at. Four drive-thru lines await customers to place their orders. The building’s indigo exterior features the brand’s name — but no sign of its namesake mascot.

In fact, while CosMc plays an outsize role in the brand’s fictional origin story on the CosMc’s website, he’s basically invisible from its branding or restaurant.

“He is not as well-known of a character,” Belflower said. “I think that’s almost to their benefit, because people can understand how CosMc’s is different from McDonald’s itself — but it still has a retro font and coloring and things like that, so I think all of that helps tie it into the nostalgia.”

CosMc’s absence could also be due to the fact that the chain’s target customer likely wasn’t born yet when McDonald’s advertisements featuring CosMc aired in the ’80′s and ’90’s. 

“Just in looking at the menu, it looks like it’s designed for half my age and under,” said Kalinowski, whose industry experience spans more than two decades.

CosMc’s customers can choose from a vast array of drinks and a smaller snack menu. Sour Cherry Energy Burst, Island Pick-Me-Up Punch and Popping Pear Slush are among the beverages that McDonald’s created specifically for the chain.

Drinks, like a Tropical Spiceade, can be customized with “boosts,” like a vitamin C shot or an energy shot, tapioca pearls known as boba or a choice of eight different syrups. The chain also offers coffee drinks — like its Churro Cold Brew Frappe, whose largest size contains nearly five times the amount of caffeine found in an average cup of brewed coffee.

CosMc’s is also the latest example of a beverage-focused restaurant that doesn’t just sell coffee. There’s Utahan soda chain Swig, now majority-owned by Larry Miller’s family office. Dutch Bros gets about a quarter of its sales from its Blue Rebel energy drink. And Starbucks’ Refreshers, first introduced a dozen years ago, are the chain’s fastest-growing beverage category in the U.S., with new spicy flavors available this spring.

Non-coffee drinks tend to appeal more to consumers looking for a pick-me-up in the afternoon. While they still might want caffeine, a flavored beverage like a Blueberry Ginger Boost from CosMc’s might be more appealing than another coffee.

CosMc’s level of customization would be difficult at a traditional McDonald’s because it would slow down its drive-thru lanes too much. For example, Starbucks has credited the shift to cold drinks and pricy customizations, like cold foam, for its sales growth in recent years, but both customers and baristas have griped about complicated orders slowing service too much.

One way to speed up CosMc’s service could be using its digital menu boards differently. The CosMc’s menu board plays ads until a car pulls up next to the nearby intercom, leaving customers little time to ponder the menu of more than 70 drinks and food items. The launch of mobile and online ordering will likely also help speed up wait times.

Once customers finish ordering, they can pay at the speaker or wait to pay with a cashier at the pick-up window. CosMc’s also has customers wait by the intercom where they ordered until their order is ready to pick up. The menu board relays what pick-up window to drive up to grab the order.

Envisioned as a small-format location, CosMc’s doesn’t offer any in-restaurant seating, leaving it up to customers to sit in the 10-spot parking lot or keep driving. The Bolingbrook CosMc’s, a former Boston Market location, is much larger than McDonald’s intends for the rest of the brand’s locations. But with empty real estate, a 45-minute drive from the company’s Chicago headquarters and a traditional McDonald’s right next door, it makes sense why the company chose that location as the first spot for the spinoff.

But the location’s history is also a warning for McDonald’s. The company bought Boston Market out of bankruptcy in 2000, intending to use its real estate. But it instead kept running the brand.

Seven years later, McDonald’s sold it off, following a broader divestment in other secondary brands like Chipotle Mexican Grill. At the time, McDonald’s sales were struggling, and executives blamed some of its woes on a lack of focus.

Ryan Salame, a former top lieutenant of FTX founder Sam Bankman-Fried, has been sentenced to 90 months, or seven and a half years, in prison, followed by three years of supervised release. Salame has also been ordered to pay more than $6 million in forfeiture and more than $5 million in restitution.

The sentence is a heavier penalty than the five to seven years that prosecutors had suggested, and well beyond the 18 months that Salame’s defense team had requested.

In September, Salame pleaded guilty to conspiracy to make unlawful political contributions, defraud the Federal Election Commission, and conspiracy to operate an unlicensed money-transmitting business.

Judge Lewis Kaplan sentenced Sam Bankman-Fried to 25 years in prison in March.

In 2021, Salame transitioned from a high-ranking post at Bankman-Fried’s crypto hedge fund, Alameda Research, to co-CEO of FTX’s Bahamian subsidiary, FTX Digital Markets. Salame spent millions of dollars on real estate and campaign donations during his tenure.

One estimate by Bahamian lawyers claims Bankman-Fried and Salame spent $256.3 million to buy and maintain 35 properties across New Providence — real estate that Bahamian regulators wanted to retrieve in FTX’s U.S. bankruptcy protection proceedings. Meanwhile, data from the Federal Election Commission shows that Salame gave more than $24 million to Republican candidates and causes in the 2022 election cycle.

Days before FTX filed for bankruptcy in 2022, Salame went to Bahamian authorities to tell them that the Bankman-Fried may have committed fraud by sending customer money from the crypto exchange to his other firm, Alameda Research. According to a criminal filing, Salame disclosed “possible mishandling of clients’ assets” by Bankman-Fried.

It was one of the first public acknowledgments of an insider turning on Bankman-Fried, who was found guilty of stealing more than $8 billion worth of customer cash they believed was safely being stored on the exchange.

Since then, however, several other insiders, including Alameda’s former CEO and SBF’s ex-girlfriend, Caroline Ellison, FTX co-founder Gary Wang, and FTX’s ex-engineering head Nishad Singh, all gave testimony for the prosecution that ultimately contributed to his guilty verdict in November. Salame did not take the stand during Bankman-Fried’s trial.

In a statement, U.S. attorney Damian Williams said Tuesday’s sentence underscored “the substantial consequences for such offenses.” 

“Salame’s involvement in two serious federal crimes undermined public trust in American elections and the integrity of the financial system,” Williams added.

Salame is the first of SBF’s executive team to be sentenced since the exchange filed for bankruptcy in Nov. 2022.

— CNBC’s Dan Mangan contributed to this report.

Stellantis plans to offer a $25,000 all-electric Jeep vehicle in the U.S. “very soon” to better attract mainstream consumers amid slower-than-expected electric vehicle adoption, CEO Carlos Tavares said Wednesday.

Tavares disclosed few details about the upcoming vehicle, saying it will be priced around $25,000 in the U.S. to emulate Stellantis’ pricing of the Citroen e-C3 SUV, a low-cost model starting at 23,300 euros, or about $25,200, in Europe.

“In the same way we brought the 20,000 Euro Citroen e-C3, you will have a $25,000 Jeep very soon,” he said Wednesday during a Bernstein investor conference. “We are using the same expertise because we are a global company and this is totally fluid across the engineering world of Stellantis.”

Stellantis currently offers an all-electric version of its Avenger SUV in Europe, starting at about 35,000 euros, or about $37,800, according to its website. The vehicle is not sold in the U.S., where the automaker has focused on plug-in hybrid electric Jeep vehicles.

Offering a new EV for around $25,000 has long been a target for automakers such as Stellantis, Tesla and others. The importance of such a vehicle has grown more apparent as Chinese automakers such as BYD and Nio grow their sales of less-expensive EVs outside of China.

“If you ask me what is an affordable BEV, I would say 20,000 euros in Europe and $25,000 in the U.S.,” Tavares said. “So our job is to bring the safe, clean and affordable BEV to the U.S., $25,000. We’ll do it.”

Jeep’s first all-electric vehicle for the U.S. is expected to be the large Wagoneer S SUV, due later this year. The company is scheduled to officially reveal the vehicle Thursday in New York. A Jeep Wrangler-inspired off-road vehicle called the Recon also is expected as soon as this year.

Tavares said Wednesday that the company expects to achieve cost parity between its all-electric vehicles and traditional internal combustion engine vehicles in the next “three years, max” to better compete with the growing “China invasion” of affordable EVs.

“It’s a very challenging period, very chaotic, very Darwinian,” Tavares said regarding the Chinese competitors, EV transition and potential consolidation of the automotive industry. “We are in the storm, and this storm is going to last a few years.”

Tavares’ comments come amid increasing geopolitical tensions surrounding China-made EVs in the U.S., Europe and other regions. Many in and around the automotive industry fear the less-expensive, China-made vehicles will flood the markets, undercutting domestic-produced EVs.

Tavares also said tariffs such as those the U.S. is implementing against Chinese EVs may delay their expansion to the U.S. but will not completely stop it.

“Yes, time helps, but you cannot stop the competition,” Tavares said. “Putting you behind a protectionist bubble is not going to help you to be competitive. … If your strategy is to shrink and stay inside of the bubble, it will buy you time, but certainly it will cut your future.”

The Biden administration’s 100% tariff announced earlier this month, up from a current import tax of about 25%, covers EVs imported from China but could still leave room for the often-cheap Chinese models to undercut domestic prices and leaves loopholes for imports made by Chinese automakers in other countries, such as neighboring Mexico. It also does nothing to address current or future gas-powered vehicles imported from the Communist country to the U.S.

The world is mired in $315 trillion of debt, according to a report from the Institute of International Finance.

This global debt wave has been the biggest, fastest and most wide-ranging rise in debt since World War II, coinciding with the Covid-19 pandemic.

“This increase marks the second consecutive quarterly rise and was primarily driven by emerging markets, where debt surged to an unprecedented high of over $105 trillion—$55 trillion more than a decade ago,” the IIF said in its quarterly Global Debt Monitor report released in May.

Around two-thirds of the $315 trillion owed originates from mature economies, with Japan and the United States contributing the most to that debt pile.

However, the debt-to-GDP ratio for mature economies — which is seen as a good indicator of a country’s ability to service its debts — has been falling in general. 

On the other hand, emerging markets held $105 trillion in debt, but their debt-to-GDP ratio hit a new high of 257%, pushing the overall ratio up for the first time in three years.

China, India and Mexico were the biggest contributors, the report noted.

The IIF identified stubborn inflation, rising trade friction and geopolitical tensions as factors that could pose a significant risk to debt dynamics, “putting upward pressure on global funding costs.”

“While the health of household balance sheets should provide a cushion against ‘higher for longer rates’ in the near term, government budget deficits are still higher than pre-pandemic levels,” the IIF added.

Of the $315 trillion debt stock, household debt, which includes mortgages, credit cards and student debt, among others, amounted to $59.1 trillion.

Business debt, which corporations use to finance their operations and growth, stood at $164.5 trillion, with the financial sector alone making up $70.4 trillion of that amount. Public debt made up the rest at $91.4 trillion.