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Costco sales up 7.9% YOY in July; Adidas Q2 net income beats estimates

TOP NEWS

* Costco Wholesale Corp.'s July net sales increased 7.9% year over year to $11.43 billion, compared with $10.59 billion in the same month a year ago.

* Adidas AG posted second-quarter earnings that beat expectations, helped by double-digit sales growth in North America and China, and confirmed its guidance for fiscal 2019. In the three months ended June 30, Adidas reported net income from continuing operations of €462 million, up 10.3% from €418 million last year and slightly above the S&P Global Market Intelligence mean consensus estimate for adjusted net income of €461.1 million.

TEXTILES, APPAREL AND LUXURY GOODS

* Capri Holdings Ltd.'s first-quarter adjusted EPS came in at 95 cents, down from $1.32 in the year-ago period but above the S&P Global Market Intelligence consensus normalized EPS estimate of 90 cents. Revenue rose 11.9% year over year, or 13.8% at constant currency. The apparel company reaffirmed its adjusted EPS outlook of $4.95 for fiscal 2020 but reduced its total revenue guidance to about $5.8 billion, reflecting unfavorable foreign currency impact and lower Michael Kors revenue, mainly in North America wholesale.

* Fossil Group Inc. posted second-quarter GAAP net loss of 15 cents per share, compared with a loss of 16 cents per share in the year-ago period. Net sales decreased 13% in reported terms, or 11% at constant currency, to $501.4 million. The company raised the lower end of its GAAP pretax income for fiscal 2019 to a range between $45 million and $75 million, from the previous $30 million to $75 million.

* Tod's SpA will increase its investments for the promotion of its brands in a bid to reach a younger consumer base, Reuters reported, citing a statement from Chairman Diego Della Valle. The footwear retailer reported a net loss of €5.7 million for the fiscal first half of 2019 as net sales declined 4.7% year over year, or 5.7% at constant currency, to €454.6 million.

* Barneys New York Inc. has been given an Oct. 24 deadline to find a buyer in order to avoid liquidation, CNBC reported. The company, which recently filed for bankruptcy protection, received new financing from Brigade Capital Management LP and B. Riley Financial, Josh Sussberg, Barneys' legal counsel from Kirkland & Ellis LLP, reportedly said.

* V.F. Corp. named Jan Van Mossevelde as vice president and general manager of the Europe, Middle East and Africa arm of its Icebreaker brand, effective in the fall of 2019.

* Hermès International SCA will open its first store in Stuggart, Germany, on Sept. 12. It is the company's 17th store in the country.

MULTILINE RETAIL

* Debenhams PLC appointed Stefaan Vansteenkiste, who joined the company in April as chief restructuring officer, as its CEO. Chairman Terry Duddy will work with Vansteenkiste before he steps down from the board in September.

* Transform Holdco LLC said it will close 26 Sears Holdings Corp. and Kmart Corp. stores in late October, with liquidation sales expected to begin around Aug. 15. Transform Holdco, which is an affiliate of Edward Lampert-owned hedge fund ESL Investments Inc., acquired Sears in February.

E-COMMERCE

* FedEx Corp. will not renew its ground-delivery contract with Amazon.com Inc., in line with the company's strategy to focus on the broader e-commerce market, Bloomberg News reported. FedEx, which will reportedly continue its contract with Amazon for international deliveries, did not immediately respond to S&P Global Market Intelligence's request for comment.

* Amazon.com Inc. expanded the presence of its Treasure Truck shopping service to Charlotte, N.C.; Cincinnati and Columbus, Ohio; and Las Vegas.

* Online travel services giant Booking Holdings Inc. saw second-quarter non-GAAP net income inch up 3% year over year to $1.03 billion from $1 billion, beating analysts' consensus net income estimate of $993.9 million, compiled by S&P Global Market Intelligence. For the three months ended June 30, revenue jumped 7% year over year to $3.85 billion from $3.54 billion due to the number of room bookings increasing.

HOUSEHOLD AND PERSONAL PRODUCTS

* Shiseido Co. Ltd. lifted its profit forecast for 2019 following positive results for the first half of the year, boosted by improving consumer spending in its home market of Japan and its steadily growing operations in China and the rest of Asia. The cosmetics company now expects net profit for 2019 to grow 35.2% year over year to ¥83 billion, or ¥207.81 per share, versus its prior guidance of a 23% increase to ¥75.5 billion, or ¥189.04 per share.

FOOD AND STAPLES RETAILING

* Another Chinese national was arrested in relation to the hacking of Seven & i Holdings Co. Ltd.'s 7pay app, the South China Morning Post reported, citing Japanese police. Authorities suspect that a China-based international crime organization is involved. Seven & i is expected to terminate the mobile payment service by the end of September.

HYPERMARKETS AND SUPERCENTERS

* Sun Art Retail Group Ltd.'s half-year 2019 EPS came in at 19 Chinese fen, versus 18 fen in the year-ago period, as attributable net profit grew 5% year over year to 1.77 billion yuan. Revenue slid 6.4% to 50.59 billion yuan from 54.06 billion yuan in 2018.

* Metro AG shareholders Meridian Stiftung and Beisheim Holding, which together own nearly 21% of the supermarket operator, have not tendered their shares to Daniel Kretinsky's EP Global Commerce VI GmbH, Reuters reported, citing a spokesman for the two investors. EP Global has refused to adjust its €5.8 billion takeover bid for Metro despite the offer being snubbed by shareholders.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Funds advised by Elliott Advisors (UK) Ltd. completed the acquisition of Barnes & Noble Inc. making the New York-based bookseller a privately held, indirect wholly owned subsidiary of the Elliott Management Corp. unit.

* Rent-A-Center Inc. reported second-quarter earnings that exceeded analysts' expectations and increased its guidance for fiscal 2019 to reflect the impact of completing the refinancing of its credit facility. For fiscal 2019, Rent-A-Center now expects non-GAAP diluted EPS between $2.05 and $2.40, up from its previous guidance of between $1.85 and $2.25.

HOTELS, RESORTS AND CRUISE LINES

* Thomas Cook Group PLC investor Neset Kockar wants a more active role in saving the travel services company, Bloomberg News reported, citing an interview with the investor. Kockar reportedly said he's seeing managerial issues at Thomas Cook, adding that the £750 million rescue deal with Chinese conglomerate Fosun International Ltd. might be an overestimation of the travel services provider's challenges.

* Indian Hotels Co. Ltd. plans to sell certain budget inns and to lease them back, in a bid to adjust to a slowing economy, Bloomberg News reported, citing CEO and managing director Puneet Chhatwal. Chhatwal reportedly said the Tata Group-owned hotel chain will shift its focus to management contracts instead of building new properties, but it will not sell its flagship locations.

INDUSTRY NEWS

* Retail sales in Singapore dropped 8.9% year over year in June to S$3.5 billion, of which 5.5% was online sales, according to the city-state's statistics department. On a seasonally adjusted basis, retail sales in June declined by 2.2% compared to the previous month.

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The day ahead

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

In Asia, the Hang Seng rose 0.48% to 26,120.77, while the Nikkei 225 was up 0.37% to 20,593.35.

In Europe, around midday, the FTSE 100 rose 0.17% to 7,211.10, and the Euronext 100 gained 1.19% to 1,041.22.

On the macro front

The jobless claims report, the Wholesale trade report, the EIA natural gas report, the Fed balance sheet and the money supply report are 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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