Business News Roundup, Oct. 26
Newly appointed Wells Fargo CEO Tim Sloan told employees Tuesday that he is “sorry for the pain” that the bank’s employees have suffered as a result of the company’s sales practices scandal.
Sloan’s company-wide speech, given in Charlotte, N.C., is the latest effort by Wells Fargo’s executives to atone for the fact that the bank’s employees, pushed to the limit by impossible sales goals, opened as many as 2 million bank and credit card accounts without customers’ authorization.
In the speech, Sloan acknowledged that the bank did not respond to the problems in its branches soon enough, and that upper management dodged responsibility for the bad behavior and wrongly placed blame on branch employees.
Wells fired roughly 5,300 employees as a result of the scandal, the vast majority of them lower-level workers.
The bank faces several class-action lawsuits, as well as criminal investigations by the Department of Justice and the California attorney general’s office.
Chipotle said sales fell for the fourth straight quarter, as the company struggles to win back customers after an E. coli scare last year.
The burrito chain says sales fell 21.9 percent at established restaurants during the quarter that ended Sept. 30, worse than the 18.3 percent drop Wall Street analysts expected.
Chipotle reported net income of $7.8 million (27 cents per share) in the quarter, compared with $144.9 million ($4.59) in the same quarter a year ago.
Adjusted earnings were 79 cents per share, below the $1.96 analysts expected, according to FactSet.
The company has given out millions of free burritos and started a three-month loyalty program in June to try to bring customers back.
In September, it started programs that allowed kids to eat free on Sundays and students to grab free sodas or iced tea with their meals.
Home prices climbed at a solid pace in August as more home buyers competed for fewer available properties.
The Standard & Poor’s CoreLogic Case-Shiller 20-city home price index rose 5.1 percent in August, after a 5 percent gain in July.
The lower October reading reflected a drop in consumers’ assessment of current business conditions and employment prospects.
The city and state of New York said Monday they would hold off enforcing a new law restricting short-term apartment sublets by Airbnb until the company’s lawsuit over the issue is resolved.
Airbnb said it faced “staggering penalties” if the law were enforced because it’s not clear whether websites might be held liable for the ads placed by renters.
While the city and state agreed not to prosecute Airbnb, officials can still go after apartment dwellers who flout the restrictions in advertising prohibited units on the Internet, including Airbnb’s website.