Danone’s CEO told CNBC that inflationary pressures from the Iran war may force the company to consider price hikes as the outlook for conflict in the Middle East remains highly uncertain.

When asked if the company would be raising prices, CEO Antoine de Saint-Affrique said, “we are not there yet.”

“Nobody knows when [the war] is going to stop, and depending how the next two to four weeks are going to evolve, the outcome from a macroeconomic standpoint, is going to be very, very different,” he told CNBC’s Charlotte Reed.

“If it lasts for long enough, it will have an impact,” he added.

His comments come as companies increasingly take stock of how the war may impact their operations and cost base. 

The conflict in the Middle East has now entered its sixth week, with U.S. President Donald Trump turning up the tone on Iran over the weekend to reopen the Strait of Hormuz. 

The president on Monday said Iran has until 8 p.m. Eastern time to reopen the strategically important strait where normally a fifth of global oil supply passes through.  

The effective closure of the narrow passage has caused not only surging energy prices but also soaring fertilizer and shipping costs. 

The Head of the International Monetary Fund Kristalina Georgieva warned Monday that even if the conflict resolves soon, the Iran war will inevitably lead to higher inflation and weaker growth.

Earlier this month, Britain’s Food and Drink Federation (FDF) forecasted food inflation of at least 9% by the end of the year, revised upwards from an estimated 3.2% previously. That would be the highest annual food and non-alcoholic drink inflation since 2023. 

“Given the fast-changing nature of the situation, this revision is based on assumptions that the Strait of Hormuz opens to cargo traffic within the next two-three weeks and the majority of key facilities, such as oil, gas and fertiliser sites, return to normal within a year,” the FDF said on April 1. 

“If it lasts for long enough, it will have an impact,” de Saint-Affrique said. 

Danone reported a roughly 2.1% overall price increase in the fourth quarter, while volume-led growth stood at 2.5%. 

The company is betting it can capitalize on its healthy brands to remain relevant as food brands also face increasing competition from cheaper private labels that offer grocers higher margins. In March, it announced it would buy protein shake maker Huel for an undisclosed sum to optimize its position in the fast-growing nutrition space. 

Retailers have also warned that they can only absorb increased costs for so long before passing them on to their customers.

British retailer Next said late last month that it had accounted for £15 million ($20 million) of additional costs likely to arise from the Middle East conflict, such as fuel and air freight, assuming the disruption lasts for three months.

“Beyond the next three months, if we see these costs persist, then we will begin to pass costs through as higher pricing,” Next said.

It pinches here; drags there; the draping is wrong. These are some of the examples of the feedback a new crop of artificial intelligence apps might give a prospective customer trying on clothing ahead of a purchase, and in the process reduce the chances of a product being returned to a store.

Fashion retailers are increasingly turning to AI to solve the issue of rising product returns, a persistent drag on profitability and something many in the industry refer to as the industry’s “silent killer”.

A growing number of AI start-ups have emerged to provide virtual try-on technology, allowing potential customers to visualize fit and style before they buy.

While tech companies have attempted to solve online fit issues since the 2010’s, the rapid development of generative AI has finally made these applications good enough to meaningfully impact retailers’ bottom lines. 

The U.S. National Retail Federation late last year estimated that 15.8% of annual retail sales were returned in 2025, totaling $849.9 billion. For online sales, that number jumped to 19.3%. Gen Z is driving this trend, with shoppers aged 18 to 30 averaging nearly eight online returns per person last year, the NRF found.

Most returned items never make it back to the shelves and often cost the retailer more to process than the value of the refund itself. It’s a multibillion-dollar problem for the industry that’s eating directly into companies’ margins.

“Figuring out how to proactively use returns and then how to minimize them can be a meaningful driver of business and profitability,” Guggenheim Senior Managing Director Simeon Siegel told CNBC.

While fit technology will never be as good as trying something on in person, it’s a great way to bridge the gap, Siegel said. “It’s going to continue to get better, I think that’s going to continue to reduce returns.”

The primary reason for returns and abandoned shopping carts is uncertainty over fit, Ed Voyce, founder and CEO of AI startup Catches, told CNBC in an interview.

Catches has developed a platform that allows users to create a “digital twin” to try on clothes virtually with what it calls “mirror-like realism.” The application went live last month on luxury brand Amiri’s website for a select range of clothes.

Unlike other models that Voyce says “just look pretty,” the Catches platform incorporates the physics of fabric texture and how material interacts with a moving body.

“The reason we built Catches was to take advantage of a kind of confluence of technologies that is taking place right now to solve this issue effectively,” says Voyce, who founded the startup backed by LVMH’s Antoine Arnault and built on Nvidia’s CUDA platform.

While e-commerce has grown rapidly in recent years, with online shopping driving retail sales growth, the current U.S. trade policy under President Donald Trump has put a dampener on the sector which relies heavily on manufacturing in Southeast Asia. Across the price spectrum, retailers are struggling to maintain margins as costs rise and consumers become increasingly price sensitive amid inflationary pressures.

The online fast fashion player has been experimenting with virtual try-ons in partnership with deep-tech startup AIUTA, allowing prospective customers to see a piece of clothing on a range of body types, heights, and skin tones. ASOS, however, cautions that the tool is designed to give general guidance and that customers must still check size guides before purchasing. 

Shopify, meanwhile, has integrated startup Genlook’s AI virtual try-on app into its commerce platform, which it says “removes sizing doubts, boosts buyer confidence and drives higher conversion rates while reducing costly returns.” 

Tech giants like Amazon, Adobe, and Google have also created virtual try-ons in various shapes and forms, partnering with major brands to roll out the technology. 

From April 30, Google’s virtual try-on tech can be accessed directly within product search results across Google platforms, according to Google Labs’ website. 

As for Catches, it projects that its app can drive a 10% increase in conversions and a 20- to 30-times return on investment for brand partners. It focuses on luxury brands because of their higher price point. The startup hasn’t yet put a number on how much returns might decline with the use of its platform, but targets “massive reductions.”

“There are certainly companies that have absolutely seen benefits – figuring out how to quantify them is more difficult,” said Siegel. 

While the benefits are clear, the analyst cautions that AI is not a magic wand. Beyond fit, retailers are looking at AI for inventory management, customer targeting, and fraud prevention.

“All of those are really interesting use cases, as long as companies don’t abandon who they are,” Siegel says.

“What you sell is always going to be more important than how you sell, and so I just think remembering that will help dictate who wins and benefits and amplifies from AI versus who gets consumed by it.”

McCormick will buy Unilever’s food business for a combination of cash and equity, in a deal that values the Unilever unit at nearly $45 billion, the two food companies announced.

To buy most of Unilever Foods’ portfolio, including Hellmann’s mayo and U.K. favorite Marmite, McCormick will pay $15.7 billion in cash, and Unilever and its shareholders will own 65% of the combined company.

The deal will add billions of dollars in annual sales for McCormick and expand the spice giant’s portfolio further into spreads and condiments. It already owns Frank’s RedHot and Cholula hot sauces.

For Unilever, divesting much of its food business allows the company to focus on its personal care segment, which is growing faster. In December, Unilever spun off its ice cream business, now trading separately as Magnum Ice Cream Company.

The deal follows a broader trend among Big Food. Many packaged food and beverage companies have been getting leaner through divestitures and spinoffs as consumers buy less of their products. In 2024, nearly half of mergers and acquisitions activity in the consumer products industry came from divestitures, according to consulting firm Bain.

Italian regulators are looking to clamp down on the tween skincare obsession and are investigating the LVMH-owned cosmetic brands Sephora and Benefit over an “insidious” marketing campaign to children.

The Italian Competition Authority (AGCM) said Friday that it has launched investigations into the two cosmetic brands centred on “unfair commercial practices,” which saw children and young people, even those under the age of 10, being encouraged to purchase serums, masks, and anti-ageing creams.

The regulator said the marketing is fuelling behavior known as “cosmeticorexia,” which refers to an unhealthy fixation on skincare amongst minors.

It emphasized that both Sephora and Benefit had failed to appropriately label products or omitted at times important precautions on products not intended for use by minors, both in-store and online on social media, which could cause serious harm to their health.

Additionally, AGCM said the popular cosmetic brands employed an “insidious marketing strategy” which involved young micro-influencers promoting other young people to buy their products.

AGCM officials and the Italian financial police carried out inspections of the premises of Sephora Italia, LVMH Profumi e Cosmetici Italia, and LVMH Italia on Thursday.

LVMH said Sephora, Benefit, and LVMH P&C Italy had been notified of the investigation.

“As the investigation is ongoing, Sephora, Benefit and LVMH P&C Italy cannot share further comments at this stage, they express their willingness to fully cooperate with the authorities,” LVMH said in a statement to CNBC. “All the companies reaffirm their strict compliance with applicable Italian regulations.”

Sephora boasts nearly 23 million followers on Instagram and over 2 million followers on TikTok, with the beauty brand at the center of tween beauty trends.

The “Sephora kids” social media trend has gained traction over the past few years, with viral videos on TikTok and Instagram showing stores flooded with teenage girls loading up their baskets with brightly-coloured and fun-looking skincare products.

In some videos, young girls show off their skincare routines with products containing anti-ageing ingredients like retinol.

A CBS News analysis of 240 skincare posts from teen influencers on TikTok found that many of the videos hadn’t been properly tagged as promotional content, with only 15 videos, or just 6% of posts, doing so. This means many content creators may unintentionally be advertising products to unsuspecting children.

One teen skincare influencer, Embreigh Courtlyn, told CBS that some brands would ask her not to label videos with “#ad,” which could be off-putting to viewers, but instead be referred to as partners, which would enable the content to perform better.

A peer-reviewed study published by Northwestern University in June last year reviewed 100 popular skincare videos posted by influencers aged 7 to 18 years old. It found that only a quarter of the videos included sunscreen, while the top 25 most viewed videos had an average of 11 and a maximum of 21 potentially irritating active ingredients.

Meta, the parent company of Facebook, Instagram, and Threads, faced two stinging defeats in court cases centered on social media harms this week. Meta was found liable by a New Mexico jury on Tuesday for nearly $400 million in damages after it concluded that it failed to protect children on its platforms from predators.

Retail firms are warning that the conflict in the Middle East is driving up costs and could lead to price hikes if the war continues beyond the short term. 

Instability in the Middle East region will not only restrain growth in the region but is also likely to have a knock-on effect on costs, selling prices, and consumer demand in the rest of the business, warned British retailer Next on Thursday. 

The company has accounted for £15 million ($20 million) of additional costs likely to arise from the conflict, such as fuel and air freight, assuming the disruption lasts for three months. Increased costs will not affect guidance as they have been offset by savings elsewhere, it added.

“Beyond the next three months, if we see these costs persist, then we will begin to pass costs through as higher pricing,” the company said early on Thursday as it reported results for the fiscal year ending January. The Middle East represents about 6% of Next’s total turnover. 

An extended war in the Gulf region could mean a double whammy for retailers as it may increase inflationary pressures and disrupt supply chains, leading to an overall higher cost base. It could also hurt demand as consumers are increasingly squeezed by the increased cost of living, resulting in less spending on discretionary items. 

The Iran war and effective closure of the Strait of Hormuz have sent oil and gas prices soaring since the first strikes on Feb. 28, and has upended inflation forecasts in Europe and beyond. 

Companies’ price-hike expectations and wages for new hires were some of the key inflation indicators that the European Central Bank will monitor, its Chief Economist Philip Lane said on Wednesday.

H&M said Thursday that “current geopolitical instability in the Middle East could, if extended, result in slightly additional cost pressure.”

H&M early Thursday reported first-quarter local currency sales that declined by 1%, but good cost control helped the company beat expectations on profitability, the company said. It was “a quarter marked by cautious consumption and large currency translation effects,” it said.

Shares fell 2.2% in late morning trading, partially paring earlier losses. 

Next shares, meanwhile, rose 5% after the London-listed fashion brand bumped up its pretax profit guidance by £8 million to £1.21 billion for the upcoming year.

“We see this update as reassuring on the strong UK trading and implied ability to pass-through costs, vs a well-known [Middle East] disruption,” Jefferies analysts said about Next’s print.

On Holding has named co-founders David Allemann and Caspar Coppetti as co-CEOs, replacing Martin Hoffmann after a five-year tenure as CEO, as the Swiss sneaker maker looks to scale globally.

The leadership shakeup comes as On is preparing to enter its “next growth phase,” the company said in a statement Wednesday. 

On shares were down 4% in premarket trading.

Earlier this month, the company forecasted that sales growth would slow more than expected this year, sending shares sharply lower. 

“We don’t want to build a brand just for the next years,” Allemann told CNBC at the time, highlighting the company’s “strategic premium play” including being selective in which franchises they push. 

On, which went public in 2021 on the New York Stock Exchange, has been taking market share from legacy competitors such as Nike and Adidas with innovative products in performance footwear and apparel.

Allemann said the company managed to win over an “ageless athlete” and is taking additional market share in a variety of categories, including tennis and running.

Allemann and Coppetti will assume their co-CEO roles on May 1. Hoffmann, who was also previously held the position of chief financial officer for 13 years, will remain as an advisor until March 2027, On said. 

In January, the company named Frank Sluis as CFO, also effective ​May 1. Scott Maguire will take on the role of president and chief operating officer.

Hoffman led the company through its initial public offering in 2021 and through its three-year strategy to double sales by 2026 and become “the most premium global sportswear brand.”

“With the strategic roadmap for continued growth in place, the four partners collectively recognize that this is the right moment for Martin Hoffmann to step down,” On said Wednesday, adding that Hoffman will pursue philanthropic interests. 

— CNBC’s Gabrielle Fonrouge contributed to this report

Shares of Puig Brands soared as much as 15% Tuesday after beauty peer Estée Lauder confirmed it is in talks about merging the two companies.

Estée Lauder said Monday that a final decision had not been made on any potential deal, first reported by the Financial Times.

Puig stock was last seen up 14.6% while Estée Lauder rose less than 1% in premarket trading.

This is breaking news. Please refresh for updates.

Target plans to report its holiday-quarter earnings and share its expectations for the year ahead on Tuesday morning, as its new CEO lays out his strategy and tries to persuade Wall Street that the big-box retailer can end its sales slump.

The Minneapolis-based discounter will hold an investor meeting at its headquarters, led by CEO Michael Fiddelke, the company veteran who stepped into the job in February, as well as other Target executives.

Here’s what Wall Street is expecting for the big-box retailer’s fiscal fourth quarter, based on a survey of analysts by LSEG:

• Earnings per share: $2.15 expected
• Revenue: $30.48 billion expected

Those results would come in shy of what Target reported in the year-ago period. The company recently affirmed its outlook for the fourth quarter, saying it expects sales to decline by a low single-digit percentage, and it anticipates its full fiscal 2025 forecast for adjusted earnings per share will range between $7 and $8. In the previous fiscal year, Target reported adjusted earnings per share of $8.86.

Target is trying to turn around several years of disappointing results driven by a mix of company missteps and economic factors. Its annual sales have been roughly flat for four years, after a significant jump in annual revenue during the Covid pandemic.

Customer traffic across the company’s stores and website has fallen for three consecutive quarters and the average amount people are spending during those visits has declined, too. Target cut 1,800 corporate jobs in October, marking its first major layoff in a decade.

Some of Target’s customers told CNBC they are shopping elsewhere after noticing changes like sloppier stores and lackluster merchandise, or objecting to the company’s social stances, like its rollback of major diversity, equity, inclusion initiatives. The company acknowledged backlash to its DEI decision had hurt sales and led to market share losses to competitors.

Target is known for selling clothing, home goods, seasonal items and other trend-driven discretionary merchandise that customers often buy on impulse when browsing the aisles on a “Target run.” Yet higher prices of food, utilities and other necessities, fueled by inflation and tariffs, has dampened U.S. consumers’ willingness to buy items that aren’t on the shopping list.

Target’s results have been at odds with those of retail rivals like Walmart, Costco and T.J. Maxx, which have posted stronger sales results, attracted shoppers across incomes, and seen growth in categories like apparel and home goods, areas where Target has struggled.

In an interview with CNBC in the fall at Target’s headquarters, Fiddelke said he would prioritize regaining the company’s reputation for style and design, improving the customer experience, and using technology to boost its performance.

He has echoed those key goals in messages to the company’s employees and comments to investors.

Last month, Target announced it would invest more in store labor and cut about 500 other roles at distribution centers and regional offices. However, the company declined to say much more it would spend.

Target shares have dropped by nearly 32% over the past three years, as of Monday’s close, though they have risen nearly 16% so far this year. The company’s stock closed on Monday at $113.17, bringing its market cap to $51.24 billion.

Anthropic’s Claude artificial intelligence assistant app jumped to the No. 2 slot on Apple’s chart of top U.S. free apps late on Friday, hours after the Trump administration sought to block government agencies’ adoption of the startup’s technology.

The rise in popularity suggests that Anthropic is benefiting from its presence in news headlines, stemming from its refusal to have its models used for mass domestic surveillance or for fully autonomous weapons.

“The Leftwing nut jobs at Anthropic have made a DISASTROUS MISTAKE trying to STRONG-ARM the Department of War, and force them to obey their Terms of Service instead of our Constitution,” President Donald Trump wrote in a Friday Truth Social post.

Department of Defense Secretary Pete Hegseth said he asked that Anthropic be labeled as a supply-chain risk to national security, and therefore, no U.S. defense contractor would be able to draw on Anthropic tools.

“It is the Department’s prerogative to select contractors most aligned with their vision,” Anthropic CEO Dario Amodei said in a statement. “But given the substantial value that Anthropic’s technology provides to our armed forces, we hope they reconsider.”

Historically, other AI chat apps have been more popular among consumers than Claude. OpenAI’s ChatGPT sat at No. 1 on the App Store rankings on Saturday, while Google’s Gemini was at No. 3.

The Claude iOS app has gained momentum this month. On Jan. 30, it was ranked No. 131 in the U.S., and it bounced around the top 20 for much of February, according to data from analytics company Sensor Tower. The data shows ChatGPT has held on to the No. 1 spot for most of February.

In the past year, Anthropic — which was formed in 2021 by former OpenAI employees — has gained momentum as a supplier of models for coding and general corporate use. OpenAI, whose ChatGPT now has over 900 million weekly users, has been responding to Anthropic’s surge in business by striking partnerships with consulting firms such as Accenture and Capgemini.

On Friday night, OpenAI CEO Sam Altman said the startup had reached an agreement with the U.S. Defense Department on the deployment of its models.

Hours later, pop singer Katy Perry posted a screenshot of Anthropic’s Pro subscription for consumers, with a heart superimposed over it.

WATCH: Sec. Pete Hegseth directs Pentagon to designate Anthropic supply-chain risk

DETROIT — The strength of the U.S. automotive industry will face an early test this spring that has nothing to do with cars or trucks.

With tax season starting, industry experts are projecting that some Americans, many of whom have been priced out of the new-vehicle market, will use anticipated higher tax returns to purchase a new or used vehicle.

Extra cash on hand could lend a needed boost to an industry that’s suffering from slowing vehicle sales — or it could reveal continued problems for the automotive industry with inflated prices and consumers still reluctant to spend on big-ticket items.

“Their new tax bill is actually going to be less, and they’re going to be getting more in their tax return. It’s going to be a little bit of a surprise, we think, for a lot of potential buyers out there,” said Cox Automotive senior economist Charlie Chesbrough at a recent auto analyst conference.

The average IRS tax refund is up 10.9% so far this season, compared with the same point in 2025, according to early filing data. As of Feb. 6, the average refund amount was $2,290, compared with $2,065 reported about one year prior.

The increases were expected under tax changes by the Trump administration, including the One Big Beautiful Bill Act signed in July. That legislation removed taxes on overtime and tips and allowed eligible taxpayers to deduct up to $10,000 in annual interest paid on loans for new, U.S.-assembled vehicles purchased, among other adjustments.

Many of the tax changes were made retroactive to January 2025, which means taxpayers may have withheld more than they will ultimately owe.

“Although it’s a bit of an unknown, it feels like it could be really beneficial to vehicle sales, particularly in that sort of Q1-Q2 time frame,” said David Oakley, GlobalData manager of Americas vehicle sales forecasts.

March is historically one of the top months for U.S. vehicle sales, especially for used vehicles. The month has represented 9.1% of annual new vehicle sales on average over the past 12 years, according to Cox, trailing only the month of December at 9.3% of sales.

Many of the recent tax changes also assist middle- and higher-income consumers who may decide to pull ahead a vehicle purchase. The industry saw a similar dynamic during the Covid pandemic when the Trump administration issued many Americans $1,400 stimulus checks.

Back then, though, federal interest rates were near zero compared to the current Federal Reserve funds rate of 3.5% to 3.75%, and the inventory of new vehicles was low. Now, with higher borrowing costs, but improved inventory, the equation could be different.

More buyers are agreeing to longer-term loans amid higher financing costs and prices. Putting down extra cash can help lower monthly payments, which Carmax’s Edmunds reports reached a record of $772 per month for new vehicles during the fourth quarter.

The average transaction price for new vehicles in the U.S. was hovering around $50,000 toward the end of last year, up 30% from the start of 2020, according to Cox.

“What we don’t know is with consumer finance so stressed already, is that extra money already spent? Whether that’s going to be in the pockets. It’s a really mixed bag out there,” Chesbrough said.

Consumers could choose to use higher tax returns to pay off credit card debt — which nationally stands at a record level of $1.28 trillion, according to a report last week by the Federal Reserve Bank of New York — or replenish their savings after a period of persistent inflation.

U.S. consumer confidence fell to 84.5 in January, the lowest level since May 2014, driven by intense anxiety over high prices and a weakening labor market.

“It’s only confident people, people who feel comfortable about their economic fortunes of the economy of the United States, that are going to be interested in taking out a $40,000 or $50,000 auto loan,” Chesbrough said. “It’s a very difficult situation right now.”

— CNBC’s Kate Dore contributed to this report.