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H&M Q1'20 profit beats estimates; Walmart pauses sale of majority stake in Asda

TOP NEWS

* Hennes & Mauritz AB reported fiscal first-quarter profit that beat expectations but anticipates it would make a loss in its fiscal second quarter, saying cuts in operating costs would not offset a substantial drop in sales caused by the coronavirus. In a statement, the fashion retailer said sales in March declined 46% year over year in local currencies as all of its stores in some of its largest markets had closed around the middle of the month. For the fiscal first quarter ended Feb. 29, H&M reported EPS more than doubled year over year to 1.16 kronor from 49 Swedish öre, beating the mean consensus of analysts' estimates for normalized EPS of 64 öre.

* Walmart Inc. has placed its sale of a majority stake in its U.K. subsidiary Asda Stores Ltd. on hold so it can focus on keeping up with consumer demand during the coronavirus outbreak, CNBC reported, citing people familiar with the matter. A spokesperson for Walmart declined to comment, CNBC said.

TEXTILES, APPAREL AND LUXURY GOODS

* Sweden's Hennes & Mauritz AB is in talks with tens of thousands of its staff about shortening working hours with the company amid weakening demand due to the coronavirus outbreak, Reuters reported, citing a company statement.

* Ross Stores Inc. will furlough the majority of its store and distribution center employees from April 5 amid extended store closures. In addition, Chairman Michael Balmuth and CEO Barbara Rentler will forgo their salaries while senior executives, including CFO, COO and chief merchandising officer, will take a pay cut of 20% to 50%.

* Puma SE will suspend its dividend payments for the year due to the COVID-19 outbreak. The footwear retailer will also not pay its management board its salary and will cut the pay of its senior management by 25%. Nearly all of Puma's stores have been temporarily closed by authorities due to the pandemic, except for locations in China, Japan and South Korea.

MULTILINE RETAIL

* Canadian Tire Corp. Ltd. will keep its Canadian Tire Retail shops open to provide "essential products" to customers amid the COVID-19 outbreak but will limit its store hours to make time for enhanced cleaning protocols. The company also launched a curbside pick-up service for online purchases, in order to enforce physical distancing. The retailer also announced that it paused its share repurchases.

E-COMMERCE

* Amazon.com Inc. will give out face masks and roll out temperature checks at its warehouses in the U.S. and Europe as well as its Whole Foods locations in the week of April 6, Reuters reported, citing a company statement. The e-commerce retailer reportedly said it will also use machine-learning software to monitor cameras and determine if workers are at safe distances from each other.

* Airbnb Inc. cut its internal valuation by 16% to $26 billion, the Financial Times reported, citing a person familiar with the matter. The source reportedly said CEO Brian Chesky informed the staff of the new valuation at a companywide meeting April 2. The development comes as bookings on Airbnb's platform decline as a result of the spread of the coronavirus. Another source reportedly told the newspaper that Airbnb expects its revenue to return to 2019 levels by January 2021.

* eBay Inc. launched an accelerator program called "Up & Running" to help small brick-and-mortar retailers transition to selling online. Under the program, the e-commerce company will help businesses establish a free basic store on its platform for three months and will waive selling fees for the first 500 items they sell.

HOUSEHOLD AND PERSONAL PRODUCTS

* German personal products producer Beiersdorf AG has withdrawn its financial guidance for full year 2020 due to the uncertainties around the impact of the coronavirus outbreak. The company, which owns skincare brand Nivea, previously expected fiscal 2020 organic group sales to grow between 3% and 5% and consolidated underlying EBIT and profit after tax to remain flat compared to fiscal 2019.

* Edgewell Personal Care Co. agreed to enter into a five-year $425 million secured credit facility that will replace its existing credit line due in June. The company plans to use proceeds from the new credit facility for general corporate purposes. Edgewell added that its factories and warehouses are fully operational during the COVID-19 outbreak.

HYPERMARKETS AND SUPERCENTERS

* Aeon Co. Ltd. partnered with Myanmar conglomerate Shwe Taung Group to build an Aeon Mall in the city of Yangon as early as 2023, the Nikkei Asian Review reported, without citing its source.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Ingka Group, which owns 380 IKEA stores globally, acquired 3D technology and artificial intelligence startup Geomagical Labs in order to boost its digital transformation. Ingka plans to use Geomagical Labs' expertise to develop photorealistic 3D representations of furnishings on its online platform so that customers can imagine them in their homes better. Financial terms of the deal were not disclosed.

* Lowe's Cos. Inc. plans to step up worker benefits during the coronavirus outbreak, including a temporary wage increase of $2 per hour during April, protective gear for all associates and new social distancing protocols.

* Bed Bath & Beyond Inc. sued 1-800-FLOWERS.COM Inc. alleging that the floral and gourmet foods gift retailer attempted to delay the closing date of the $252 million sale of its PersonalizationMall.com business due to the coronavirus crisis. The home furnishing retailer said 1-800-Flowers breached their agreement after it "suddenly and unilaterally declared" that it was looking to delay the closing date to at least April 30 from the original closing date of March 30. In an emailed statement to S&P Global Market Intelligence, 1-800-Flowers said it intends to "vigorously defend" itself against the lawsuit.

HOTELS, RESORTS AND CRUISE LINES

* AccorHotels suspended its dividend and slashed staff hours as the hotel company grapples with the impact of the coronavirus pandemic, the Financial Times reported. The dividend suspension will enable AccorHotels to save €280 million, a quarter of which will be placed into a fund that would help its struggling employees. The French hotel group has also furloughed or cut the hours of three-quarters of its 310,000 workers worldwide since more than half of the company's 5,000 hotels were shut down.

INDUSTRY NEWS

* Total retail sales in Singapore fell 8.6% year over year in February to a total value of S$3.1 billion, of which 7.4% are from online sales, according to the city-state's statistics department. Excluding motor vehicles, retail sales dropped 10.2%. Singapore attributed the decline to lower tourist arrivals and decreased domestic consumption as a result of the ongoing coronavirus outbreak. On a seasonally adjusted basis, retail sales declined 8.9% from January.

* Retail sales volume in Hungary grew 10.9% in February in raw terms, or 11.3% in calendar-adjusted terms, according to the country's statistics office.

READ MORE: Sign up for our weekly coronavirus newsletter here, and read our latest coverage on the crisis here.

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The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng dipped 0.19% to 23,236.11, and the Nikkei 225 was up 0.01% to 17,820.19.

In Europe, around midday, the FTSE 100 fell 1.11% to 5,419.14, and the Euronext 100 was down 0.94% to 825.01.

On the macro front

The employment situation consensus, PMI services consensus, ISM non-mfg index consensus and the Baker-Hughes rig count due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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