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Home Depot Q1 earnings beat estimates; Rockport files for bankruptcy protection

TOP NEWS

* Atlanta-based home improvement retailer Home Depot Inc. reported fiscal first-quarter diluted earnings that exceeded analysts' expectations as net sales increased despite a slow start to spring selling. Diluted EPS for the three months ended April 29 climbed 24.6% year over year to $2.08 from $1.67, ahead of the S&P Capital IQ mean consensus estimate for GAAP EPS of $2.04. Home Depot reaffirmed its projection for full-year diluted EPS of $9.31, which would constitute a 28% year-over-year increase if achieved.

* U.S. footwear company The Rockport Group LLC filed voluntary petitions under Chapter 11 bankruptcy to facilitate the sale of its business to Charlesbank Equity Fund IX unit CB Marathon Opco LLC through a stalking horse offer. The struggling retailer said it raised $20 million in financing from existing noteholders, adding to its current $60 million credit facility, which will be used to fund the company's operations as it undergoes the sale process. The Newton, Mass.-based manufacturer of shoe brands Dunham and Rockport is also seeking court approval to close its North American retail stores that were not acquired by Charlesbank or another party.

TEXTILES, APPAREL AND LUXURY GOODS

* Burberry Group PLC will take over a luxury leather goods business from its longtime Italian leather goods partner CF&P. The deal is expected to close later this year, after which CF&P employees, including a team of craftsmen who have worked closely with Burberry, will transfer to the company, although operations will remain at the current site. Financial details of the arrangement were not disclosed.

* Gap Inc. apologized after facing criticism for selling shirts that omitted south Tibet, Taiwan and the South China Sea as parts of China's territory, Reuters reported, citing a statement posted by the company on Chinese social media platform Weibo. The U.S. apparel retailer said it was an "unintentional error," adding that the products were removed from the Chinese market and then destroyed.

MULTILINE RETAIL

* Sears Holdings Corp. has initiated a formal process to explore the sale of its Kenmore appliance brand, along with related assets that include the Sears Home Improvement Products business and the Parts Direct business of the Sears Home Services division. Through a special committee comprising independent Sears board members, the company will evaluate a letter from Sears CEO Edward Lampert's hedge fund ESL Investments that expressed interest in purchasing Kenmore and other assets as well as explore other options for the businesses.

* Target Corp. is in the trial phase of a new distribution strategy aimed at faster restocking of inventory for store replenishment and online order fulfillment at a Perth Amboy, N.J., warehouse, The Wall Street Journal reported. Aside from testing its New Jersey "flow center," the Minnesota-based retailer is designing a warehouse management system that will integrate its split operations for distribution and fulfillment, Preston Mosier, senior vice president of replenishment and fulfillment operations, told the newspaper.

E-COMMERCE

* Amazon.com Inc. is questioning its growth in Seattle following the city council's approval of a tax on Seattle's largest businesses, The Seattle Times reported, citing a statement from Amazon Vice President Drew Herdener. The legislative body passed a new tax on businesses grossing more than $20 million in annual revenue as it seeks to raise $47 million annually for five years to fund homeless services. Amazon, Seattle's largest employer, reportedly is disappointed with the move, despite confirming that it resumed construction planning for its new tower in the city, which it put on hold in early May, pending the outcome of the "head tax" vote.

* JD.com Inc.'s logistics unit invested $306 million in pan-Asian real-estate developer ESR Cayman Ltd. to explore cooperation opportunities in areas including property development, fund management, and investment in China and other key Asian markets.

* Amazon will open its sixth Ohio fulfillment center in the West Jefferson village of Madison County that will span 855,000 square feet and house more than 1,500 full-time employees by 2019-end. The new facility adds to Amazon's centers in the state that operate in Etna township and Obetz village, as well as planned facility launches in Randall and Monroe by the end of 2018 and in Euclid within 2019.

* Japanese peer-to-peer marketplace app Mercari Inc. won approval for a planned IPO on the Tokyo Stock Exchange worth up to ¥117.6 billion, according to a Japanese regulatory filing. The flea market app operator is set to list on the TSE's Mothers market starting June 19 at an indicative price range of ¥2,200 to ¥2,700 per share, with final pricing to be determined June 11. Upon listing, the company will have a total of 135,331,322 shares outstanding, giving it a market cap of up to ¥365.39 billion.

HOUSEHOLD AND PERSONAL PRODUCTS

* Consumer goods company Hindustan Unilever Ltd. reported growth in key earnings metrics for the fiscal fourth quarter and full year ended March 31. Unilever PLC's Indian subsidiary said profit for the final quarter of fiscal 2018 amounted to 13.51 billion rupees, up 14% from 11.83 billion rupees in the year-ago period and ahead of the S&P Capital IQ consensus estimate of 13.49 billion rupees. Diluted EPS came in at 6.24 rupees, compared with 5.47 rupees a year prior and beating the S&P Capital IQ consensus estimate of 6.02 rupees, while revenue from operations reached 90.97 billion rupees from 88.86 billion rupees in the year-ago period.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Danish jewelry manufacturer Pandora A/S delivered a disappointing first-quarter performance, sending shares down more than 9% in lunchtime trading in Copenhagen. For the first quarter of 2018, the manufacturer of hand-finished and contemporary jewelry reported diluted EPS of 10.5 kroner, down from 12.1 kroner in the year-ago period and below the S&P Capital IQ consensus normalized EPS estimate of 10.97 kroner. Revenue for the period fell to 5.12 billion kroner, a decrease of 1% year over year, 6% in reported currency terms, from 5.16 billion kroner in the same quarter of 2017. For fiscal 2018, Pandora continues to expect revenue to grow in the range of 7% and 10% on a reported basis from 22.8 billion kroner.

* Toys R Us Inc. will sell its intellectual property, including its name, the company's Geoffrey the Giraffe logo and mascot, as well as its Babies 'R' Us brand, in July to repay its lenders, Reuters reported. The bankrupt toy retailer will also sell domain names it previously registered to protect its brand, the news agency added.

* Sturm Ruger & Co. Inc. said it will honor a shareholder vote requiring the company to prepare a report on gun safety, but said it has no plans to change its business model as it faces pressure from investors. The proposal requested evidence that the gunmaker is monitoring incidents in which the company's own firearms are involved in violent events and requested information on any of the company's efforts to research and produce safer guns and gun products. The proposal also asked Sturm Ruger for an assessment of its reputational and financial risks associated with gun violence in the U.S.

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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 fell 1.23% to 31,152.03, while the Nikkei 225 dropped 0.21% to 22,818.02.

In Europe, around midday, the FTSE 100 climbed 0.28% to 7,732.60, and the Euronext 100 shed 0.04% to 1,070.77.

On the macro front

The retail sales report, the Empire State Manufacturing Survey, the Redbook Index, the business inventories report, the Housing Market Index and the Treasury International Capital report are due out today.

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