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Wesfarmers to sell Homebase; Ross Stores Q1 earnings beat estimates

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Wesfarmers to sell Homebase; Ross Stores Q1 earnings beat estimates

TOP NEWS

* Australian conglomerate Wesfarmers Ltd. agreed to sell its struggling Homebase home improvement chain in the U.K. and Ireland, taking a loss of up to £230 million in the deal. The buyer is a company associated with private equity firm Hilco Capital LP, which will pay a "nominal amount" for all Homebase assets including its brand, store network, freehold property, property leases and inventory.

* Ross Stores Inc.'s fiscal first-quarter EPS beat expectations and the company raised its full-year guidance as it booked benefits on U.S. federal tax reform. The off-price retailer posted diluted EPS of $1.11 for the fiscal first quarter ended May 5, an increase from the 82 cents reported in the prior-year quarter. The S&P Capital IQ mean consensus estimate for GAAP EPS was $1.07. Ross boosted its 2018 full-year guidance to a range of $3.92 to $4.05 per share, including benefits from tax reform.

TEXTILES, APPAREL AND LUXURY GOODS

* Samsonite International SA called Blue Orca Capital LLC's report "one-sided and misleading" after the short seller alleged that the luggage maker had "questionable accounting practices" by hiding its slowing growth via debt-fueled acquisitions. Samsonite Chairman Timothy Parker added that he is confident in the capabilities of CEO Ramesh Tainwala, whom Blue Orca alleged to have committed résumé fraud.

* Compagnie Financière Richemont SA now owns approximately 95.01% of YOOX Net-A-Porter Group SpA, which will be delisted from the Milan Stock Exchange on June 20. The Swiss luxury goods company is expected to buy out YNAP's remaining shares for up to €300.1 million after it acquired 94.99% of the Italian online retailer, following the end of its takeover offer.

* Ralph Lauren Corp. expects a net revenue decline in fiscal 2019 as the company reported results for its fourth quarter of fiscal 2018 ended March 31. The New York-based apparel retailer expects net revenue for fiscal 2019 to decrease in the low single digits in constant currency and operating margin to increase slightly in constant currency, driven by gross margin expansion. The retailer reported adjusted EPS for the quarter of 90 cents, an increase from EPS of 89 cents in the fourth quarter of fiscal 2017 and beating the S&P Capital IQ mean consensus estimate of 83 cents.

* Gap Inc. posted fiscal first-quarter earnings that missed analyst expectations but maintained its fiscal year 2018 outlook. For the quarter ended May 5, the apparel retailer reported diluted EPS of 42 cents versus 36 cents in the year-ago period, missing the S&P Capital IQ consensus normalized EPS estimate of 46 cents. Nevertheless, Gap affirmed its full-year diluted EPS outlook to between $2.55 and $2.70. The S&P Capital IQ consensus normalized EPS estimate for the fiscal year is $2.58.

MULTILINE RETAIL

* MAP Aktif Adiperkasa, or MAA, a subsidiary of department store chain PT. Mitra Adiperkasa Tbk, is launching an IPO to raise up to 1.3 trillion Indonesian rupiah amid volatility in Indonesia's stock market, the Nikkei Asian Review reported. The retail operator, which intends to list around late June, is offering 550 million of its shares at a price of 2,000 rupiah to 2,400 rupiah per share. Fetty Kwartati, Mitra Adiperkasa's head of corporate communications, reportedly said the IPO will reduce MAA's outstanding debt and strengthen its capital structure.

E-COMMERCE

* Chinese e-commerce company JD.com Inc., in partnership with electric vehicle company NIO, will launch an in-car delivery service where customers' purchases can be dropped off in their car trunks at a variety of approved locations. Under the program, JD.com will equip its delivery personnel with a device that can open and lock customers' cars. The company added that the whole delivery process can be monitored using in-car cameras and that the device can only be operated by a specifically authorized JD.com delivery person.

HOUSEHOLD AND PERSONAL PRODUCTS

* L'Oréal SA finalized its purchase of hair color brand Pulp Riot. David Thurston will remain CEO of the Los Angeles-based firm post-acquisition. Financial details of the transaction were not disclosed.

FOOD AND STAPLES RETAILING

* FamilyMart UNY Holdings Co. Ltd. board approved the sale of Uny Co. Ltd.'s Hong Kong unit to Urban Kirin Ltd., a subsidiary of Hong Kong real estate company Henderson Land Development Co. Ltd. Urban Kirin will acquire Uny Hong Kong, which operates Apita, Uny, Piago and Watashi to Seikatsu-branded stores in the region, for HK$300 million. The Henderson unit said it expects the move to strengthen the group's position in the local retail industry and expand its store coverage.

* Russian food retailer X5 Retail Group NV said it plans to open at least 110 new stores in four Russian regions by 2020. The plan is part of an agreement the company signed with the regions of Leningrad, Vologda and Yaroslavl and Republic of Karelia. The planned developments are expected to create about 2,100 jobs.

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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 declined 0.56% to 30,588.04, while the Nikkei 225 increased 0.6% to 22,450.79.

In Europe, around midday, the FTSE 100 was up 0.24% to 7,736.44, and the Euronext 100 was up 0.46% to 1,077.21.

On the macro front

The durable goods orders report, two-year FRN note settlement report and the Baker-Hughes Rig Count report are due out today.

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