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Rite Aid, Albertsons end merger; Adidas Q2 profit surges from World Cup boost


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Rite Aid, Albertsons end merger; Adidas Q2 profit surges from World Cup boost


* Rite Aid Corp. and Albertsons Cos. Inc. have mutually agreed to end their $24 billion merger ahead of the drug retailer's scheduled shareholder vote on the transaction at an Aug. 9 special meeting, which Rite Aid has now canceled. "While we believed in the merits of the combination with Albertsons, we have heard the views expressed by our stockholders and are committed to moving forward and executing our strategic plan as a stand-alone company," Rite Aid CEO John Standley said. Under the terms of the deal, announced in February, neither Rite Aid nor Albertsons will be responsible for any payments to the other party as a result of the termination of the merger arrangement.

* Adidas AG posted a jump in profit for the second quarter ended June 30 as the FIFA World Cup soccer tournament helped boost sales worldwide. For the three months ended June 30, the German sportswear-maker reported net income from continuing operations of €418 million, surging 20% year over year from €347 million and beating the S&P Global Market Intelligence consensus estimate of €384.2 million. Diluted EPS from continuing operations came in at €2.05, up from €1.70 in the year-ago period and ahead of the S&P Global Market Intelligence consensus estimate for normalized EPS of €1.90, while net sales grew 4% year over year to €5.26 billion.


* Danish jewelry-maker Pandora A/S said Anders Colding Friis has resigned as president and CEO of the company, effective Aug. 31. The news follows Pandora's recent announcements that it lowered its revenue and EBITDA margin guidance for full year 2018 and will cut 397 jobs as part of organizational changes to streamline operations and protect profitability. Pandora also announced the appointment of former Body Shop CEO Jeremy Schwartz as the company's COO, effective Sept. 1.


* Alibaba Group Holding Ltd. rolled out a premium membership package that will offer exclusive benefits across the Chinese company's business units such as e-commerce, video-streaming platform Youku, music-streaming platform Xiami, food delivery provider and online ticketing portal Taopiaopiao. The 88 VIP package, a new tier within the 88 Membership Club, is a loyalty program Alibaba launched in 2017 that offers members a 5% discount for Tmall Supermarket as well as the flagship stores of select brands on Taobao and Tmall. Users can pay an annual fee of 88 yuan to upgrade to the 88 VIP level if they have at least 1,000 membership points collected through purchases and interactions on the e-commerce platforms or pay 888 yuan if they have less than 1,000 points.

* Chinese online grocery delivery provider Dada-JD Daojia will receive a combined investment of $500 million from Walmart Inc. and Inc., Shanghai Securities News reported, citing a company announcement. Walmart said in a separate same-day statement that it is contributing $320 million to Dada-JD Daojia's latest financing round, as well as increasing its stake in the Chinese company to 10% and gaining a seat on the board. Dada-JD Daojia was formed in April 2016 from the merger of JD Daojia, the online-to-offline operation of Chinese online retailer, and Dada Nexus, a crowdsourcing delivery platform. "By working closely with strong partners, and increasing investment in digital capabilities, we will create simpler and more convenient shopping experience for customers," Walmart China CEO Wern-yuen Tan said in a statement, while Dada-JD Daojia could not be reached for comment by S&P Global Market Intelligence.


* CVS Health Corp. expects limited impacts from potential divestitures that may be required to merge with insurer Aetna Inc. as more states sign off on the deal ahead of federal regulatory approval, said CVS CEO Larry Merlo. "While I won't provide details on our interactions, I can tell you that we are having productive discussions with regulators," Merlo told analysts during a conference call discussing the company's second-quarter earnings. "We currently expect the [Aetna] transaction to close late Q3 or the early part of Q4," Merlo added. Separately, CVS said its MinuteClinic retail medical clinic is launching a new service called MinuteClinic Video Visits on the CVS Pharmacy mobile application that gives patients with minor illnesses access to healthcare professionals.

* Aldi Einkauf GmbH & Co. oHG said it will increase its fresh food selection in the U.S. by 40% as part of its growth plan to invest more than $5 billion in expanding the discount grocer's store count to 2,500 by 2022-end. The German company, which operates more than 1,800 stores in the U.S., also noted that 20% of the products in all of its stores will be new compared to a year ago and that Aldi is more than halfway through its remodel investment.

* Koninklijke Ahold Delhaize NV confirmed its financial targets for fiscal 2018 after reporting "strong earnings" that met estimates for the second quarter of the year. For the three months ended June, Ahold Delhaize posted underlying EPS of €0.37, a 12.1% year-over-year increase, 15.6% in constant rates, from €0.33 in the year-ago period and meeting the consensus of four analysts' estimates compiled by S&P Global Market Intelligence. Net sales declined 3.7% year over year to €15.53 billion due to the timing of Easter but above the S&P Global Market Intelligence consensus revenue estimate of €15.49 billion.

* Casino Guichard-Perrachon SA refuted the report released by research firm Sanford C. Bernstein Ltd., which said the French company's franchise partnership transactions were not properly accounted for, advising investors to slash about €152 million from Casino's EBITDA for a proper valuation. Casino said that, contrary to the report, it is not obligated to buy back loss-making stores that were transferred to franchisees for the purpose of improving profitability, adding that the stores transferred in 2015-2016 have shown recovery. However, the food retailer said that "in a very unlikely scenario where all the stores transferred would have to be simultaneously closed, the one-off cost for the group would be limited to around €50 million."


* Costco Wholesale Corp.'s net sales in July grew 10.1% to $10.59 billion from $9.62 billion in the same month a year ago, while net sales for the 48 weeks of fiscal 2018 increased 12.1% year over year to $127.40 billion. For the four-week period ended Aug. 5, comparable sales of the warehouse club operator rose 8.3% year over year, while e-commerce comparable sales were up 20.9%. Comparable sales in Canada also grew 3.2% and climbed 6.3% in other international markets.

* Hong Kong-listed supermarket operator Sun Art Retail Group Ltd. saw flat EPS and revenue growth for the first fiscal half of 2018 compared with the year-ago period. For the six months ended June 30, Sun Art posted basic and diluted EPS of 18 Chinese fen, while revenue came in at 54.06 billion yuan, slightly below the 54.08 billion yuan reported in the same half a year earlier. Profit attributable to equity shareholders of the company was 1.76 billion yuan, flat from a year earlier but slightly above the consensus estimate of 1.61 billion yuan, according to data compiled from three analysts by S&P Global Market Intelligence.


* Hilco Capital LP, which agreed to purchase home improvement chain Homebase from Australia's Wesfarmers Ltd. in May, is planning to close about 60 of the stores, putting more than 1,000 jobs at risk, Sky News reported, citing sources. Sources also told Sky News that private equity firm Hilco is expected to disclose plans to launch a company voluntary arrangement for Homebase through restructuring adviser Alvarez & Marsal in the coming days. This comes several weeks after it was reported that Homebase could potentially close up to 80 stores and cut 300 jobs at its England headquarters under Hilco's ownership.

* Online home furnishings company Casper Sleep Inc. plans to open 200 physical stores across North America in the next three years in a bid to expand its sleep product offerings beyond mattresses, The Wall Street Journal reported, citing CEO Philip Krim. The 200 locations reportedly will include Casper's 18 existing temporary outlets that the New York-based company will turn into permanent ones. The news comes amid reports that rival Mattress Firm Inc., a subsidiary of embattled retailer Steinhoff International Holdings NV, may close some of the company's loss-making stores out of its 3,000 locations as part of a bankruptcy filing.

The day ahead

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

In Asia, the Hang Seng climbed 0.88% to 28,607.30, while the Nikkei 225 fell 0.20% to 22,598.39.

In Europe, around midday, the FTSE 100 fell 0.72% to 7,721.01, and the Euronext 100 was down 0.31% to 1,074.53.

On the macro front

The jobless claims report, the PPI-FD report, the wholesale trade report, the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.

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