Clear Kool Aid and Jell-O? Kraft ditches dyes
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Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis. Good afternoon. Today is Tuesday, June 17th, and I'm your host, Kim Kahn. Our top stories so far.

What color is Kool-Aid in the wild? We may soon find out. Kraft Heinz announced it will not launch any new products in the U.S. with food, drug, and cosmetic colors effective immediately. The food giant also announced that it will remove the remaining FD&C colors from its U.S. product portfolio before the end of 2027. That includes products like Kool-Aid and Jell-O. Kraft noted that nearly 90% of Kraft Heinz's U.S. products are already free of FD&C colors as measured by sales.

For the small portion of products that currently contain FD&C colors, the company has invested significant resources and is mobilizing a team to address the complex challenge. Looking ahead, the strategy will be to remove colors where it is not critical to the consumer experience, replace FD&C colors with natural colors, and reinvent new colors in shades where matching natural replacements are not available.

Pedro Navio, North American president of the company, said, "...the vast majority of our products use natural or no colors, and we've been on a journey to reduce our use of FD&C colors across the remainder of our portfolio. In fact, we removed artificial colors, preservatives, and flavors from our beloved Kraft mac and cheese back in 2016. Our iconic Heinz tomato ketchup has never had artificial dyes."

On the economic front, May U.S. retail sales fell 0.9% on the month versus the consensus for a 0.5% drop and a 0.1% prior drop revised from 0.1% higher. That was the steepest drop in more than two years. Core retail sales, which exclude motor vehicles and parts, fell 0.3% month-on-month versus a consensus estimate of a rise of 0.2% and flat prior.

Retail sales, excluding autos and gas, fell 0.1% month-on-month versus 0.1% up prior. Wells Fargo economists say today's report for May is not a terribly encouraging report card in terms of how spending is holding up amid tariffs. Auto dealers have now seen falling sales in four out of the first five months of the year. A pop in March was solid with a 5.3% monthly increase that was largely attributed to people getting the biggest of big-ticket purchases done ahead of tariffs.

But in the wake of that excitement, sales activity on dealer lots has slowed now in back-to-back months. The May decline of 3.5% marks the biggest monthly decline of 2025 so far. Pantheon Macro notes that the resilience in underlying sales volumes so far probably reflects the fact that little of the uplift to consumer prices from the new tariffs has yet reached consumers. We think underlying sales volumes will drop back significantly in the coming months as tariffs are passed on in earnest.

Among active stocks, Lennar turned in mixed fiscal Q2 results, with earnings missing consensus and revenue topping the average analyst estimate. The outlook for Q3 was also uneven. The company expects fiscal Q3 deliveries of 22,000 to 23,000 homes versus the visible alpha consensus of 23,314, and new orders also of 22,000 to 23,000 versus the visible alpha estimate of 22,543.

Major global pharmaceutical companies are trading lower after President Donald Trump said tariffs on the sector are coming soon. And J-Bill is jumping after third quarter fiscal 2025 results and outlook that crushed expectations. The original equipment manufacturer took advantage of strong data center demand.

For the quarter in progress, Jabil expects adjusted EPS ranging from $264 to $304, with a midpoint of $284, more than the consensus of $274. The company expects revenue ranging from $7.1 to $7.8 billion, with a midpoint of $7.45 billion, more than the estimate of $7.23 billion. In other news of note, it's Apple vs. Love.

The Netherlands Authority for Consumers and Markets said that a Dutch court confirmed in its ruling that Apple abused its dominant position by imposing unreasonable conditions on dating app providers in the App Store. The District Court of Rotterdam ruled that the ACM was right to establish that Apple abused its dominant position because dating app providers were restricted in their freedom of choice. Apple said it planned to appeal, adding, "...the ruling undermines the technology and tools we've created to benefit developers,"

and protect users privacy and security and we plan to appeal and in the wall street research corner along with its continued tactical call to buy u.s equities blackrock said it still sees five mega forces that will define the investment environment and change the inflation outlook and long-term growth and create big shifts in profitability across economies and sectors the five mega forces are demographic divergence digital disruption and artificial intelligence

geopolitical fragmentation, the future of finance, and net zero transition. That's all for today's Wall Street Lunch. Look for links for stories in the show notes section. Don't forget, these episodes will be up with transcriptions at seekingalpha.com slash WSB. And join the elite community of real investors to unearth great investing ideas. Just head to seekingalpha.com slash subscriptions.