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Fast Retailing slashes FY'20 forecast; Seven & i 9-month profit grows 8.8% YOY

TOP NEWS

* Uniqlo parent Fast Retailing Co. Ltd. slashed its financial targets for the fiscal year ending Aug. 31 after its fiscal first-quarter earnings fell short of analysts' estimates due to the ongoing boycott of Japanese products in South Korea and unrest in Hong Kong. For the fiscal year ending Aug. 31, Fast Retailing now expects profit attributable to owners of the parent of ¥165.0 billion, a 1.5% year over year rise, compared with ¥175.0 billion, or a 7.6% increase, it projected Oct. 10, 2019. For the three-month period ended Nov. 30, 2019, the Japanese fast-fashion group recorded a 3.5% year-over-year drop in profit attributable to owners of the parent to ¥70.91 billion from ¥73.48 billion, missing the S&P Global Market Intelligence consensus net income estimate of ¥75.53 billion, with three analysts reporting.

* Japan's Seven & i Holdings Co. Ltd. reported that net profit for the first nine months of fiscal 2020 increased 8.8% year over year, driven by the performance of its local convenience stores. For the nine months ended Nov. 30, 2019, net income attributable to the owners of the parent climbed to ¥169.97 billion from ¥156.27 billion in the year-ago period. Diluted EPS came in at ¥192.23, compared to ¥176.53 a year prior.

TEXTILES, APPAREL AND LUXURY GOODS

* Ted Baker PLC's banking syndicate, which includes Barclays and the Royal Bank of Scotland, has hired restructuring advisers from FTI Consulting to conduct an independent review on the struggling fashion retailer, Sky News reported. The business review, which will take several weeks to finish, reportedly could lead to lenders further tightening their debt terms for the company, whose CEO recently stepped down. Ted Baker declined to comment on the matter, the report added.

* PVH Corp. named Tom Chu, president of its Japanese business, as regional president of its Asia-Pacific arm, effective Feb. 1. Chu will succeed Frank Cancelloni, who is expected to leave the company at the end of March after more than six years in the role.

MULTILINE RETAIL

* Kohl's Corp. reported that comparable sales for the combined fiscal November and December 2019 period went down 0.2% year over year. The company expects diluted EPS for the full year to come in at the low end of its guidance range of $4.75 to $4.95. Shares of the Wisconsin-based omnichannel retailer were down 5.91% in New York premarket trading.

* U.K. retailer John Lewis Partnership PLC said Paula Nickolds, managing director of its John Lewis & Partners department store unit, will leave the company. The announcement came after John Lewis reported a 1.8% drop in group sales for the Christmas period, with a 2% like-for-like decline in the department store division. Chairman Sir Charlie Mayfield said the board will meet in February to decide whether it is "prudent" to pay out its annual staff bonus.

* Macy's Inc.'s shares rose in midday trading Jan. 8 after reporting year-over-year holiday sales declines that were less than analysts expected. The retailer said comparable sales on an owned and licensed basis fell 0.6% in November and December 2019, while comparable sales on an owned basis fell 0.7%. Shares surged as much as 7% in premarket trading following the news before settling to a 1.5% gain at $17.93 by midday.

* Marks & Spencer Group PLC's third-quarter group revenue declined 0.7% at constant currency to £3.02 billion as sales went down 0.6% in the U.K. and 2.3% internationally. CEO Steve Rowe noted that, despite the challenging trading environment in the lead up to Christmas 2019, its U.K. food segment posted like-for-like growth of 1.4% for the 13 weeks ended Dec. 28, 2019.

E-COMMERCE

* Amazon.com Inc.'s home security company, Ring, has fired employees for accessing users' video data in violation of its policies, according to Ring's letter to U.S. senators. "Although each of the individuals involved in these [four] incidents was authorized to view video data, the attempted access to that data exceeded what was necessary for their job functions," Ring said in the letter, which was written in response multiple questions raised by senators about its security system. The company added that it has limited data access to a smaller number of team members and periodically reviews the access privileges it grants to its team. Online magazine Motherboard obtained a copy of the letter and was the first to report the event.

HOUSEHOLD AND PERSONAL PRODUCTS

* The Procter & Gamble Co. plans to acquire subscription-based, direct-to-consumer brand Billie Inc., whose products include shaving supplies and premium body care items for women. Financial terms of the transaction were not disclosed, but the U.S. consumer-goods maker said the move will strengthen its female grooming business and accelerate growth for Billie.

* Kimberly-Clark Corp. appointed Achal Agarwal, president of the group's Asia-Pacific consumer unit, to the newly created role of chief transformation officer. Agarwal will be succeeded in his current position by Aaron Powell, who is president of Kimberly-Clark Professional. All appointments are effective March 1.

FOOD AND STAPLES RETAILING

* Tesco PLC reported a 0.9% year-over-year drop in like-for-like sales during the fiscal third-quarter as slight growth in its domestic market was outweighed by weaker performance abroad. Group revenue for the 19 weeks to Jan. 4 fell to £21.03 billion. Sales in the U.K. and Ireland rose 0.4% to £16.81 billion, which included a 0.4% negative impact from general merchandise as Tesco adjusted its product mix.

* Walgreens Boots Alliance Inc. will launch "an end-to-end process review" for its Boots UK Ltd. subsidiary, in a bid to shift to a more "lean and effective operating model," CFO James Kehoe told analysts during the company's first-quarter earnings call. A source reportedly told the Financial Times that the review will look into the use of automation and technology for simplifying processes in the health and beauty retailer.

* Bangkok-based oil and gas company PTT PCL has denied reports that its retail unit, PTT Oil and Retail Business Co. Ltd., will be joining the bid for Tesco PLC's operations in Asia, Reuters reported. PTT's remark follows a Reuters report earlier in the day, which said, citing people familiar with the situation, that PTTOR will participate in the first-round bids alongside other Thai conglomerates Charoen Pokphand Group Co. Ltd. and The Central Group. Reuters said PTT declined to comment further.

HYPERMARKETS AND SUPERCENTERS

* Wal-Mart de México SAB de CV said consolidated sales for December 2019 climbed 3.1% year over year to 73.65 billion Mexican pesos from 71.43 billion pesos a year ago.

* Costco Wholesale Corp. posted a 10.5% year-over-year increase in net sales for December 2019 to $17.04 billion, compared with $15.42 billion. For the five-week period ended Jan. 5, total comparable sales of the warehouse club operator grew 9% year over year, while e-commerce comparable sales rose 43.1%.

* Walmart Inc. introduced an autonomous warehouse system called Alphabot that will help the retailer improve its online grocery pickup and delivery process for both employees and customers. Alphabot uses autonomous carts to retrieve ambient, refrigerated and frozen items ordered online, which are then delivered to a work station where an employee checks, bags and delivers the final order.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Lowe's Cos. Inc. named Marisa Thalberg as chief brand and marketing officer and executive vice president, effective Feb. 10. Thalberg will join from Yum! Brands Inc.-owned Taco Bell, where she was its global chief brand officer.

* The real estate division of Ingka Group, parent of home furnishing company Ikea AB, bought Kings Mall in London's Hammersmith district to establish a 27,000-square-meter shopping center for the Swedish retailer, the Financial Times reported, citing a company statement. Gerard Groener, managing director at Ingka Centres, reportedly said the move is part of the company's multibillion-euro strategy to develop "mixed-use urban sites" around Ikea stores.

* Bed Bath & Beyond Inc. withdrew its outlook for fiscal 2019 after posting an adjusted net loss of 38 cents per diluted share for the third quarter of fiscal 2019, versus an adjusted diluted EPS of 2 cents in the year-ago period. The S&P Global Market Intelligence consensus normalized EPS estimate for the quarter was 2 cents. Net sales fell 9% year over year to $2.76 billion from $3.03 billion. The company plans to delay the closure of 20 of its 40 Bed Bath & Beyond stores that were scheduled for the first fiscal half of 2020, CFO Robyn D'Elia told analysts during an earnings call. D'Elia said the retailer is on track to open about 10 locations in fiscal 2019.

* Dunelm Group PLC reported that total group revenue for the second quarter ended Dec. 28, 2019, rose 6.2% year over year to £322.4 million. On a like-for-like basis, total revenue grew 5%, mainly driven by a 32.1% jump in online sales. The home furnishing retailer expects a pretax profit of approximately £83 million for the first half of the fiscal year.

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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 increased by 1.68% to 28,561.00, while the Nikkei 225 was up 2.31% to 23,739.87.

In Europe, around midday, the FTSE 100 increased by 0.55% to 7,616.24, and the Euronext 100 increased by 0.49% to 1,161.09.

On the macro front

The jobless claims report, 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.

The Daily Dose is updated as of 8 a.m. ET. Some external links may require a subscription. Links are current as of publication time, and we are not responsible if those links are unavailable later.