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Costco fiscal Q3 results beat Street; Brazil's BRF, Marfrig begin merger talks

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Costco fiscal Q3 results beat Street; Brazil's BRF, Marfrig begin merger talks

TOP NEWS

* Costco Wholesale Corp. fiscal third-quarter as-reported EPS and net income beat analyst expectations as the retailer's comparable sales for the quarter grew faster than expected. Diluted EPS of $2.05 surpassed the S&P Global Market Intelligence mean consensus estimate for GAAP EPS of $1.82. Net income attributable to Costco of $906 million beat the Market Intelligence mean consensus estimate for GAAP net income of $799.7 million. Comparable sales grew 5.5% during the quarter ended May 12, a faster increase than the Market Intelligence estimate of 4.88%.

* Brazilian packaged food companies BRF SA and Marfrig Global Foods SA entered into exclusive talks for a potential merger, according to separate announcements released by the companies. The parties signed a memorandum of understanding and entered a 90-day negotiation period to review the benefits of a possible combination and determine the most efficient corporate structure to be adopted. The companies' combined market capitalization was about $7 billion at market close on Thursday.

FOOD RETAIL & DISTRIBUTION

* Amazon.com Inc.'s Indian unit expanded its Pantry grocery delivery service to more than 110 cities in the country, Press Trust of India reported. Saurabh Srivastava, director for category management at the e-commerce giant's local unit, reportedly disclosed the plan in a statement, saying they have added more than 70 cities and towns to the areas covered by Amazon Pantry over the past six to seven months, bringing the total number of cities being served to 110.

BEVERAGES

* Brewer Heineken NV said it plans to invest 550 million Brazilian reais to revamp four of its plants in Brazil, Reuters reported. The Dutch brewer will improve its facilities in Araraquara, Itu and Jacareí, as well as a microbrewery in Campos do Jordão, all located in São Paulo. The company reportedly also will open a new distribution center in the state.

PACKAGED FOODS

* Mondelez International Inc. said it completed the sale of its Kraft-branded cheese business in the Middle East and Africa region to Danish dairy company Arla Foods for an undisclosed amount. The deal includes all of Mondelez's Kraft-branded cheese products offered in the Middle East and Africa, as well as a cheese factory in Bahrain. The Philadelphia cream cheese brand and Jocca cottage cheese brand are not included in the transaction.

* The Unilever Group-owned ice-cream maker Ben & Jerry's is set to add cannabidiol, or CBD, to its products as soon as the plant extract is legalized at the federal level. CBD is a non-psychoactive compound found in cannabis plants. Ben & Jerry's said it has submitted a comment to the U.S. Food and Drug Administration, supporting the legalization of adding CBD to food and beverages. The FDA set a hearing on the issue of legalizing it instead on May 31.

* Industrial holding company Stone Canyon Industries Holdings LLC agreed to acquire packaged ice manufacturer Reddy Ice Holdings Inc. Financial terms of the deal were undisclosed.

TOBACCO & SMOKING PRODUCTS

* U.S. e-cigarette giant Juul Labs Inc. is considering plans to open physical stores in the U.S. and international markets to directly sell its products to consumers, The Wall Street Journal reported, citing unnamed sources. The San Francisco-based Juul has hired staff for possible locations in Dallas and Houston and is expected to open a store in South Korea, the reported said. Juul did not immediately respond to requests for comment from S&P Global Market Intelligence.

RESTAURANTS

* YUM! Brands Inc.-owned fast-food chain KFC is considering adding plant-based meat substitutes to its menu, CNBC reported, citing a company executive. Kevin Hochman, head of KFC's U.S. arm, reportedly told the news outlet that he is scheduled to meet with major plant-based meat suppliers to learn more about plant-based meat products but said the company has no immediate plans of testing these alternatives yet.

* Restaurant chain operator Tai Hing Catering Group aims to raise up to HK$950 million in an IPO in Hong Kong, China Daily reported. The Hong Kong-based company will offer 250 million shares, with a share price range of between HK$2.80 and HK$3.80, the report added. The company expects to begin trading on the main board on June 13.

* Restaurant Brands International Inc.-owned Popeyes Louisiana Kitchen Inc. said it agreed to debut Popeyes restaurants in Spain. The company aims to reach 40,000 restaurants over the next 8 to 10 years, according to the release.

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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 was down 0.79% to 26,901.09, and the Nikkei 225 fell 1.63% to 20,601.19.

In Europe, around midday, the FTSE 100 was down 0.92% to 7,151.63, and the Euronext 100 was down 1.58% to 1,014.46.

On the macro front

The personal income and outlays report, the Chicago PMI, the consumer sentiment report, the farm prices report and the Baker-Hughes Rig Count 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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