With higher prices and elevated interest rates stubbornly sticking around, Chipotle burrito bowls and European vacations are still on the table for many consumers. But Big Macs and kitchen remodels aren’t.

The most recent round of quarterly earnings reports helped to sort companies into largely two camps: McDonald’s, Starbucks and Home Depot were among the consumer-centric companies that surprised investors with weaker-than-expected results, saying customers had pulled back their spending. Others, like Sweetgreen and Delta Air Lines, bucked the trend and reported growth.

The takeaway? Consumers have become more selective about how and where they spend their dollars.

“Consumers continue to be even more discriminating with every dollar that they spend as they faced elevated prices in their day-to-day spending,” McDonald’s CEO Chris Kempczinski said on the company’s conference call in late April.

For more than two years, consumers have dealt with sharply rising prices. This year, most companies expect that their pricing strategies will return to their pre-pandemic approaches, thanks to stabilizing commodity prices. But that doesn’t mean the actual prices seen on grocery store shelves or restaurant menus will fall, and shoppers are feeling that pinch.

The consumer price index rose 3.4% over the last 12 months through April, according to Department of Labor data. On Tuesday, a day before the monthly CPI report, Federal Reserve Chair Jerome Powell reiterated that inflation is falling more slowly than expected, which likely means the central bank won’t be cutting interest rates anytime soon.

Making matters worse, many consumers have run through the savings they accumulated during the pandemic when they were collecting stimulus checks in place of traveling. Instead, many are paying their everyday bills with credit cards as they face higher costs for gas, rent and groceries. The average consumer owes $6,218 on their credit cards, up 8.5% year over year, according to a TransUnion quarterly report out last week.

Aurelia Concepcion, 57, a case manager in New York, said she is planning only essential travel this year, drawing the line at visiting family in Georgia and Ohio.

“Everything is too high … taxis, rent.” Concepcion says she avoids restaurants: “It’s too expensive. I’d rather prepare my own food.”

Concepcion isn’t the only consumer changing spending habits. Executives have been warning about a more cautious spending environment for awhile. But it’s finally starting to show up in some companies’ quarterly results.

KFC, Pizza Hut and Starbucks were among the restaurant companies that reported declining same-store sales in the most recent quarter. Home Depot’s revenue was weaker than expected because potential customers are putting off renovations until interest rates fall, executives said. And Apple iPhone sales fell 10% in the tech company’s latest quarter, suggesting consumers weren’t upgrading to the latest version of the smartphone in the patterns that they have in the past.

“Some of the things that have seen the biggest run-up in prices over the last few years are items that confront people on a daily basis: the cost of eating out, the cost of groceries and the costs of fuel and gasoline and rents,” said Columbia Business School economics professor Brett House. “Regardless of whether inflation is slowing amongst those goods, even with lower inflation, prices remain very high, and people get a daily reminder of that.”

Big-box giant Walmart said last Thursday that shoppers are prioritizing buying food and health-related items over general merchandise, like home goods and electronics. The retailer has reported that trend for several quarters now. Finance chief John David Rainey told CNBC that Walmart’s grocery business has gotten a boost from the widening gap between restaurant prices and the cost of cooking at home. 

Lower-income consumers are struggling more than other demographics. They couldn’t save as much during the pandemic, and evidence suggests that they’ve exhausted those savings, according to House. On top of that, rent prices have surged, and low-income consumers are more likely to rent than own.

PepsiCo, for one, particularly called out a weaker low-income consumer. The Gatorade owner saw volume for its North American beverage business fall 5% in the quarter.

“The lower-income consumer in the U.S. is stretched … [and] is strategizing a lot to make their budgets get to the end of the month,” CEO Ramon Laguarta told analysts on the company’s conference call in April.

Pepsi is leaning into promotions and discounts to lure back the low-income shopper. Other companies are similarly hoping deals will attract more customers. McDonald’s, king of the low-price fas-food segment, plans to start offering a $5 value meal on June 25.

While some CEOs have said that consumers are growing more cautious, others — like those in the airline industry — have celebrated strong and persistent spending.

“Consumers continue to prioritize travel as a discretionary investment in themselves,” Ed Bastian, CEO of Delta Air Lines, the most profitable U.S. carrier, said in an interview in April.

Delta and its rival United last month each forecast earnings ahead of analysts’ estimates for the second quarter. Both carriers offer sprawling global networks and have benefited from a rebound in international travel in the wake of the pandemic, particularly to Europe and popular destinations in Asia for U.S. travelers like Japan. Both carriers have predicted record summer travel demand.

Those airline trends align with a broader consumer shift that started after pandemic lockdowns: spending more money on experiences rather than apparel or electronics.

“We’re still spending disproportionately on activities and services rather than on goods,” House said.

Delta and United are also capitalizing on travelers who have been willing to pay up for more expensive seats, like first class or premium economy. U.S. airlines have been racing to add more high-priced seating to their planes and grow lounges for top spenders. Inflation hasn’t hurt high-income consumers as much as it has the budget-conscious, giving them more room to spend.

Higher-income consumers have also bolstered fast-casual restaurant chains, like Chipotle, that come in at a slightly higher price point than the cheapest options. The burrito chain’s same-store sales grew 7% during the first quarter, fueled by a 5.4% increase in foot traffic. Chipotle has a strong perception of value among diners, CEO Brian Niccol said on the company’s conference call. Executives have also previously emphasized that most of its customers come from higher-income brackets.

Even Walmart have been attracting consumers with deeper pockets. As customers pay more for groceries, the discounter has attracted more affluent customers and stolen market share from rivals like Target, which has historically been more popular with wealthier shoppers. The company also credited its remodeled stores and expanded merchandise on its website for appealing to households that have a more than $100,000 annual income. 

Target is schedule to report its quarterly earnings on Wednesday. 

Not all companies with higher-income customer bases have seen the same strong demand, however. Corporate misfires can also lead to disappointing sales, even if their shoppers aren’t necessarily pulling back on their spending.

For example, athleisure brand Lululemon’s U.S. sales lagged in its most recent quarter, which CEO Calvin McDonald attributed in part to a shortage in key product sizes and not enough colorful items.

Then there’s Starbucks, which has always positioned itself as a premium coffee brand. The coffee giant announced a surprise decline in its U.S. same-store sales and lowered its full-year forecast, sending its shares tumbling. While CEO Laxman Narasimhan gave a laundry list of factors explaining the weak quarter, including a more value-minded consumer, Bank of America analyst Sara Senatore wrote in a research note that a social media boycott might still be the primary culprit.

And Peloton’s latest report was the latest in a string of disappointing results for the company. Earlier this month, the pandemic darling fired its chief executive and announced plans to lay off 15% of its staff as fewer consumers bought its pricey equipment or its much cheaper fitness subscriptions in its latest fiscal quarter.

“With the economic outlook for consumers unlikely to improve across the balance of this year, Peloton’s trajectory on the product front is unlikely to change course … But worryingly, app subscriptions are also under pressure — most likely because consumers are reviewing their expenses more carefully as they suffer from subscription fatigue,” GlobalData managing director Neil Saunders said in emailed comments.

Red Lobster has filed for voluntary Chapter 11 bankruptcy in Florida, the company confirmed in a statement late Sunday night — but it intends to keep its locations open.

The 56-year-old seafood chain, the largest of its kind in the U.S., said it would ‘drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern.’

The company said it lost $76 million last year and had seen a 30% drop-off in guest count since 2019.

As part of its reorganization, Red Lobster has agreed to sell its business to a new entity wholly owned and controlled by its lenders, a so-called stalking horse arrangement. The company said it had received a $100 million financing commitment to fund ongoing operations.

The bankruptcy petition lists the company’s assets as worth between $1 billion and $10 billion and lists debt obligations within the same range.

The chain had recently announced it was closing some 99 locations across the country.

But the company stressed that its remaining restaurants will stay open during the bankruptcy process and that it has been ‘working with vendors to ensure that operations are unaffected.’

In its bankruptcy filing, Red Lobster stated it employs 36,000 workers who serve some 64 million customers per year.

Jonathan Tibus, the company’s CEO, said: ‘This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth.’

Founded in 1968, Red Lobster grew to nearly 700 locations by 2019. But it failed to regain its footing after the pandemic. Between 2019 and 2023, U.S. sales fell 13% on net. The privately held company has since struggled under its debt load, while also seeing payments to vendors disrupted.

That’s coincided with a stream of executive turnover announcements, and ill-fated strategic initiatives including an all-you-can-eat shrimp offering that resulted in heavy losses.

In the bankruptcy filing, Tibus cited ‘the difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition within the restaurant industry’ as the reasons for its struggles. He highlighted the fact that dining costs have outweighed groceries, and that 50% of U.S. states had increased their minimum wages, further reducing Red Lobster’s profit margin.

Perhaps the most prominent of the poor decisions was an ‘endless shrimp’ offering by a previous CEO that Tibus said ultimately cost the company $11 million. The circumstances that led to the promotion are under investigation, Tibus said.

The company has also seen multiple owners over the past five years; most recently seafood conglomerate Thai Union had taken a controlling stake, but it announced in January its intention to sell it.

Department stores are aging — and so are their customers.

For over a century, the stores won over multiple generations with a promise to sell shoppers a wide variety of everything. For many Millennial and Gen Z consumers, that hasn’t been enough — especially as they discover items on social media, and specialty retailers, big-box stores and online players steal away sales.

Department stores like Macy’s, Kohl’s and Nordstrom face an existential crisis, as they try to persuade investors to bet on their futures while sales slow and their core customers age. Harsh scrutiny from Wall Street has contributed to a fresh attempt by Nordstrom to take the company private, and a bid by activist investors to take over Macy’s and turn it into a private company. Kohl’s, too, has been the target of activist investors in the past few years.

Oliver Chen, a retail analyst at TD Cowen, said attracting younger customers has become more urgent, since the retailers have “lost so much ground already.”

“When you’re a department store, you need to — and you should — be catering to younger and older,” he said.

Customer data illustrates the challenge for the retailers. At Kohl’s, 40% of customers are Baby Boomers, according to Numerator, a market research firm that tracks retail trends and sales patterns with a panel of 150,000 U.S. consumers that’s balanced to represent the population. At Macy’s, more than a third of customers — 36% — are Boomers. (Macy’s data includes just its namesake stores and website, not Bloomingdale’s and beauty chain Bluemercury.)

Baby Boomers are age 60 or older, according to Numerator’s definition. The firm defines Gen X as between ages 43 and 59. Numerator puts Millennials in the age 29 to 42 range, and Gen Z between 18 and 28, since it only collects data from consumers 18 or older.

Nordstrom is the only one of the three that has a larger base of Millennial and Gen X shoppers than Baby Boomers, with Boomers accounting for 25% of its customer base. Its customer data includes both its namesake stores and its off-price retail chain, Nordstrom Rack, which has been known to draw in younger, fashion-forward customers hunting for deals.

All three department stores have announced plans to woo new customers — including younger ones. Yet they have shared weak outlooks for the fiscal year, calling for little, if any, year-over-year sales growth.

Chen said the retailers are paying more attention to the problem, since Macy’s and Kohl’s both have new CEOs and all three are trying to improve their private brands. The lines can help a retailer stand out because they are exclusive and often priced lower than national brands.

Aging customers isn’t department stores’ only hurdle. The chains, like other retailers, have struggled with foot traffic and sales as consumers spend less on clothing, bedding and other discretionary items while more of their money goes toward everyday items because of inflation.

To attract younger shoppers, Kohl’s is adding trendier clothing for teens, opening more Sephora shops and bulking up its baby department.

In an interview with CNBC in late March, CEO Tom Kingsbury said department stores, including Kohl’s, have relied too much on coupons to get customers through their doors. That formula doesn’t work for Millennial and Gen Z shoppers, he said. They want compelling merchandise and clear pricing — things they’re finding at off-price stores like T.J. Maxx instead.

Led by Kingsbury, Kohl’s is trying to capitalize on life stages that tend to spark purchases, such as decorating an apartment for the first time or having a baby. The retailer plans to add Babies R Us shops to about 200 of its stores in the fall. It is now carrying more home goods, such as lighting and wall art.

Kohl’s has also used Sephora shops, which it is expanding to all stores, to draw in younger shoppers and try to nudge them to other parts of the store.

“When they come in for Sephora, we want to make sure we can give them product they want as well,” Kingsbury said.

Still, Kohl’s doesn’t expect to see immediate results from the moves. It said in March that it expects net sales to range from a 1% decrease to 1% increase for the full year, and comparable sales to range from flat to 2% higher.

With a new CEO at the top, Macy’s wants to refresh its namesake brand and shutter stores that have dragged down the company’s sales.

It plans to close more than a quarter of its an approximately 500 namesake stores by early 2027. At the same time, Macy’s is trying to go where younger shoppers are, including suburban strip malls and beauty aisles.

The company plans to open up to 30 of its smaller off-mall Macy’s stores over the next two years. The locations are roughly one-fifth the size of its traditional mall stores and typically next to grocers, big-box stores and off-price retailers, which have steadier foot traffic.

It’s also opening more Bloomingdale’s stores and more locations of Bluemercury, its beauty chain — and taking steps to woo younger customers in the process.

Macy’s CEO Tony Spring, who stepped into the role in February, previously led Bloomingdale’s, which carries luxury brands but also has popular private labels like clothing brand Aqua. It’s also known for unique customer experiences, such as limited-time events or collections that tap into pop culture moments like the “Barbie” movie.

He’s hinted more of that is coming to Macy’s. The company has debuted new, exclusive clothing brands and given others a makeover. It’s trying to make Macy’s more of an attraction, including by having a play area in Toys R Us shops within the stores or cocktails inside of Bloomie’s, its smaller, off-mall version of Bloomingdale’s.

Despite efforts to jolt sales, the company’s forecast is muted: Macy’s expects full-year net sales to range between $22.2 billion and $22.9 billion, down from $23.09 billion in the prior year. It expects comparable sales, which takes out the impact of store openings and closures, to range from a decline of about 1.5% to a gain of 1.5% compared with the year-ago period on an owned-plus-licensed basis and including third-party marketplace sales.

One of the dilemmas for Macy’s? Gen Z and Millennial shoppers aren’t as loyal, TD Cowen’s Chen said. They shop high and low, buying a luxury handbag one day and an outfit from Target, Costco or Zara another.

“You can actually look better for cheaper now,” he said.

Compared to its department store rivals, Nordstrom has had more success with younger shoppers.

Some of that boils down to what the Seattle-based retailer carries: Nordstrom has been quicker to sign deals with hot brands and direct-to-consumer names, such as Skims, Kim Kardashian’s shapewear company; and Beis, the handbag and luggage brand started by actress Shay Mitchell. It launched Australian fashion brand Princess Polly in January and timed the debut of millennial-focused fashion brand Nasty Gal with an activation in Los Angeles coinciding with Coachella.

Another advantage for Nordstrom? Most of its stores are Nordstrom Rack locations, off-price stores that may have a friendlier price point for younger shoppers.

Still, CEO Erik Nordstrom said on the company’s March earnings call that the retailer wants to do better. He said it’s starting to a see a turnaround with the younger customer, “which is an area we have a multi-year plan to improve.”

Nordstrom is trying to increase its fashion-forward merchandise in a new way, too. About a month ago, it rolled out a third-party marketplace that allows it to sell a wider variety of items without taking on the risk of owning the inventory. The marketplace approach follows the model that Amazon and more recently, Walmart, has used to bulk up its online offerings.

With the marketplace, Nordstrom has said it will double or triple the number of items sold through its website and app. Macy’s, too, has begun using a third-party marketplace to add more items and brands.

Like Macy’s and Kohl’s, though, Nordstrom has a lackluster forecast: It expects full-year revenue, including retail sales and credit cards, will range from a 2% decline to a 1% gain compared with the previous fiscal year, which had an additional week.

Marketplaces can help department stores, as they’re under pressure to tightly manage inventory yet appeal to what different age groups want, said Christine Barton, a senior partner who researches consumer habits for the Boston Consulting Group.

Cost pressures can cause a retailer to place safer bets and order the same kind of merchandise that they always carry.

“You take away some of that newness,” she said. “You going back to more tried and true brands or products and so that becomes a bit of a self-reinforcing prophecy in terms of that younger consumer.”

Breaking away from those old habits is something that department stores will need to do if they want to become a staple for younger generations — and stay relevant for decades more, she said.

Ivan Boesky, a onetime Wall Street titan-turned-convict who served as the partial inspiration for the 1987 Oliver Stone film ‘Wall Street,’ has died at the age of 87.

Though he denied ever saying it, contemporary accounts reported Boesky extolling the virtues of avarice in a commencement speech at the University of California Berkeley in 1986.

“I think greed is healthy,’ Boesky reportedly said. “You can be greedy and still feel good about yourself.”

At that point, he was seen as a money-making visionary for his seeming ability to predict business mergers.

By the end of that year, Boesky had been charged with insider trading, having made lucrative stock bets based on illicit access to proprietary information.

As it turned out, Boesky was sending literal briefcases full of cash to an insider at a well-known Wall Street firm in exchange for tips about acquisition activity.

Wendy’s will offer a $3 breakfast combination meal starting Monday, as restaurant chains look for new ways to drive sales while consumers pull back on dining out.

The deal will include a small portion of seasoned potatoes and a choice of either a bacon, egg and cheese English muffin or a sausage, egg and cheese English muffin, the fast-food chain said.

The promotion comes as Wendy’s rival McDonald’s plans a similar yet limited value meal option as it tries to boost traffic. Last week, CNBC reported the fast-food giant’s $5 meal deal would be available in stores for only a month, starting June 25.

Consumers have become more selective about where they spend their dollars, and some restaurants have started to see a long expected consumer pullback. Other fast-casual chains have enjoyed strong sales despite higher prices.

As inflation lingers, companies that cater to lower-income consumers have faced a particular challenge bringing in customers.

Wendy’s earlier this month reported first-quarter revenue grew a modest 1.1% to $534.8 million. Its same-restaurant sales worldwide grew only 0.9% in the quarter.

McDonald’s missed first-quarter earnings expectations last month. Although higher prices have helped the chain’s revenue, they have scared away some low-income customers. Chief Financial Officer Ian Borden said the company has adopted a “street-fighting mentality” to compete for value-minded diners.

KFC, Pizza Hut and Taco Bell owner Yum Brands also posted a disappointing earnings report earlier this month, as revenue missed Wall Street estimates. The company cited same-store sales declines for KFC and Pizza Hut.