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AB Foods maintains FY outlook; Sainsbury's sales rise in Q1'19


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AB Foods maintains FY outlook; Sainsbury's sales rise in Q1'19


* Associated British Foods PLC maintained its full-year outlook as increased sales at retail chain Primark offset a sharp decline in sugar revenue. In a trading update for the 40 weeks ended June 23, AB Foods said group revenue was 3% ahead of the same period in fiscal 2017 at constant currency rates and 2% ahead at actual exchange rates. AB Foods' sugar business saw revenue decline 17% in the fiscal third quarter due to "significantly" lower European Union prices that adversely affected operations in the U.K. and Spain.

* U.K. grocer J Sainsbury PLC reported a 0.8% year-over-year increase in sales for the 16-week period ended June 30, which reflected its £150 million investment made to reduce prices in March. CFO Kevin Byrne, in a call to discuss the first-quarter trading update with analysts, said the price cuts resulted in strong volume responses and "encouraging changes" in items per basket at stores. The grocer added that like-for-like sales, excluding fuel, went up 0.2% year over year.


* Hong Kong craft beer brewers, who have grown to over 35 from zero in five years, are hoping that China's expanding market can boost sales as the mainland looks to develop an economic zone, Reuters reported. China reportedly has plans to integrate nine southern Chinese cities with Hong Kong and Macau to create a region of about 70 million people and the fifth-largest economy in the world by 2030. Carlsberg A/S and Anheuser-Busch Inbev SA/NV are also planning to develop their own range of craft beers for sale in China, the report added.

Carlsberg A/S* Indian conglomerate Tata Group is considering a proposal to consolidate its food and beverage businesses into a single company, BloombergQuint reported, citing people with knowledge of the matter. The sources reportedly told the news outlet that Tata is looking to separate the salt and branded lentils divisions of Tata Chemicals Ltd. and to combine it with Tata Global Beverages Ltd. and its unit Tata Coffee Ltd. Tata Global Beverages, which manufactures tea and coffee under the Tetley, Tata Tea and Eight O'Clock brands, could change its name to reflect the group's broader focus on the foods business, the sources said.


* Philippine fast-food chain operator Jollibee Foods Corp. will acquire or work with a Mexican food brand in the U.S. for a joint venture, the company confirmed in a Philippine Stock Exchange filing. The confirmation comes after newspaper The Philippine Star, citing an interview with Jollibee Chairman Tony Tan Caktiong, reported July 1 that the company is already in talks regarding a potential deal.


* Packaged food and meat producer Conagra Brands Inc. closed the sale of its Del Monte processed fruit and vegetable business in Canada to Bonduelle SA for about C$43 million. Bonduelle, a French company that produces processed vegetables, said the acquisition includes the right to use the Del Monte brand on different segments of processed fruits and vegetables and stocks of products.

* New Zealand's a2 Milk Co. Ltd. appointed Jayne Hrdlicka as managing director and CEO of the company, effective July 16. She was CEO of Qantas Airways Ltd-owned Jetstar Group and a nonexecutive director on the board of Woolworths Group Ltd.

* Brazilian poultry supplier BRF SA is looking to extend the maturity of its debts as it moves to improve its financial structure, Brazilian newspaper O Estado de S. Paulo reported, without saying how it obtained the information. BRF CEO Pedro Parente is reportedly in talks with banks to negotiate its credit maturities.


* Asda Stores Ltd., the Walmart Inc.-owned supermarket chain that is slated to be merged with J Sainsbury PLC, announced July 3 that Rob McWilliam will return to the company as its CFO. McWilliam left Asda in 2012 to head the finance and consumables division of Inc.'s U.K. arm. In addition, Asda vice president and commercial finance director John Fallon was promoted as deputy CFO.

* French food services and catering group Sodexo SA's revenues for the first nine months amounted to €15.5 billion, down 2.9%. During the period, the currency impact fell 6.6% due to the weakness of the U.S. dollar and the Brazilian real in particular. Organic revenue grew 1.6% and the company's net acquisitions contributed 2.2% during the period, speeding up in the third quarter, with its subsidiary, Centerplate contributing for the full quarter. The company reiterated its forecast for organic revenue growth in the range of 1% to 1.5% for the full 2018 fiscal year, and an underlying profit margin of about 5.7%.


* Food companies like Nestlé SA, Hershey Co. and Unilever PLC are at odds with farmers as the companies want the U.S. Department of Agriculture to include genetically modified ingredients, such as canola oils and beet sugar, in labels, Reuters reported. The farmers, fearing GMO backlash from consumers, want labels to exclude their ingredients because the refining process reportedly removes any traces of the modified genes when used for food. However, Hershey and Nestlé disagree with the farmers, the report said, since the labels will provide consistency and transparency.

* Indian government approved a steep hike of about 40% to 50% in minimum support prices for Kharif crops, coarse grains that are planted by the poorest farmers, mostly in unirrigated areas, Economic Times (India) reported. The government increased the price of paddy by 13%, sorghum 42%, pearl millet 37%, finger millet 52% and maize 19%. Prices of soybeans saw an increase of 11.5%, niger seed 45% and groundnut nearly 10%, the report noted.


* U.S. food retailers J.M. Smucker LLC, Campbell Soup Co. and PepsiCo Inc. got hit by the recent retaliatory trade tariffs by Canada and European Union, following the Trump administration's tariffs on imported steel and aluminum products, CNBC reported. In an email to CNBC, Campbell Soup's spokesperson Alexandra Sockett said the company expects "significant impact" from Canada's 10% tariff on soup, broths and tomato products, which represent the core of the company's offerings. J.M. Smucker's spokeswoman Maribeth Burns said that the company is assessing the "potential impact," the report added. Pepsico did not respond to CNBC's request for comment.

The day ahead

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

In Asia, the Hang Seng was down 0.21% to 28,182.09. The Nikkei 225 declined 0.78% to 21,546.99.

In Europe as of midday, the FTSE 100 added 0.60% to 7,618.39, and the Euronext 100 was up 0.94% to 1,053.54.

On the macro front

The Challenger job-cut report, the ADP employment report, the jobless claims report, the ISM non-manufacturing index, and the EIA petroleum status report are due out today.

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