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Unilever scraps HQ plan; Constellation Brands beats fiscal Q2'19 EPS estimates

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Unilever scraps HQ plan; Constellation Brands beats fiscal Q2'19 EPS estimates

TOP NEWS

* Anglo-Dutch consumer goods giant Unilever Group abandoned a plan to simplify the corporate structure of its listed entities, Unilever PLC and Unilever NV, and to move its headquarters to the Netherlands. In a filing to the London Stock Exchange, Unilever said the board determined that the proposal to simplify Unilever's status had not received support from a significant group of shareholders . In the statement, Unilever Chairman Marijn Dekkers reiterated that the board "continues to believe that simplifying our dual-headed structure would, over time, provide opportunities to further accelerate value creation and serve the best long-term interests of Unilever."

* Constellation Brands Inc. beat analyst EPS estimates and posted year-over-year profit growth in the fiscal second quarter of 2019. The beverages group reported comparable, or non-GAAP, net income attributable to the company of $562.2 million, a jump from the $499.2 million in the prior-year period. EPS on a comparable, non-GAAP basis rose 16% year over year to $2.87. Analysts expected $2.61, according to the mean consensus estimate for normalized EPS compiled on S&P Global Market Intelligence. For the fiscal second quarter, Constellation Brands recorded net sales of $2.30 billion on a reported basis, a 10% jump year over year from $2.09 billion. Operating income on a reported basis hit $765.0 million, a 7% rise from the $717.3 million in the same quarter last year.

FOOD RETAIL & DISTRIBUTION

* The Supreme Court of Western Australia has ordered a meeting of Wesfarmers Ltd. shareholders on Nov. 15 to vote on a scheme of arrangement for the planned $20 billion demerger of the Coles supermarket chain. According to the release, if the majority votes in the favor of the spinoff, eligible shareholders will be entitled to 1 Coles share for every Wesfarmers share owned. The company's chairman, Michael Chaney, said Wesfarmers directors unanimously recommended shareholders vote in favor of the proposed demerger.

RESTAURANTS

* Senator Bernie Sanders called on McDonald's Corp. to follow Amazon.com Inc. in increasing its minimum wage to $15 per hour and set an example for the entire fast food industry, Bloomberg News reported, citing the senator's letter on Twitter to the fast-food chain's CEO. McDonald's, in response to the tweet, said in an email that it provides opportunities for employees with "world-class training and education programs to help them build the skills needed for today's workforce," Bloomberg reported.

PACKAGED FOODS

* Campbell Soup Co. is in talks to sell its fresh-foods business, which includes Bolthouse Farms, to investors led by Bolthouse's former CEO, Jeff Dunn, The Wall Street Journal reported, citing people familiar with the development. Dunn was Bolthouse CEO when it was sold to Campbell for $1.55 billion in 2012. The unit, which has been weighed down by supply-chain issues, is valued between $500 million and $700 million after Campbell wrote down its value by $1 billion, sources told the news outlet. The company made the move following pressure from activist investors and remains open to strategic initiatives, including a possible sale, the Journal added.

* JBS Tolleson Inc., part of Brazilian packaged meat producer JBS SA's U.S. arm, recalled about 6.9 million pounds of various raw, non-intact beef products sold in the U.S. due to the potential presence of salmonella newport, according to a notice from the U.S. Department of Agriculture's Food Safety and Inspection Service. The recall affects products packaged on various dates from July 26 to Sept. 7, which were distributed to retail outlets, including Walmart Inc., across several U.S. states, such as Arizona, California, Kansas, Texas, Colorado, Wisconsin, Georgia and Florida. The FSIS said it was first notified of an investigation into salmonella newport illnesses Sept. 5. The agency subsequently identified JBS as the common supplier of the affected ground beef products.

* Activist hedge fund Third Point LLC has demanded access to an array of company records from the Campbell Soup Co., Reuters reported. Third Point has given the New Jersey-based company five days to grant access to several confidential documents regarding its recently concluded strategic review, mergers and acquisitions activity and CEO succession planning. The hedge fund, which is led by Dan Loeb, cited a New Jersey statute that gives shareholders the right to review company records, given that the requesting party demonstrates a "proper purpose" for looking at the documents.

BEVERAGES

* Thai energy drink maker Osotspa Co. Ltd. raised 15.1 billion baht, or $463 million, after pricing its initial public offering at the top of a marketed range, Bloomberg News reported, citing people with knowledge of the matter. The shares were offered at 22 baht to 25 baht each. Bloomberg added that the company plans to use proceeds from the share sale to fund domestic and overseas expansion, including construction of a factory in Myanmar.

* New Age Beverages Corp. is set to launch its cannabidiol, or CBD, portfolio next week at the North American Convenience Store Show in Las Vegas as the company, Bloomberg News reported. The company is having talks this week with retailers about pre-orders in states where cannabis is legal, but does not expect a full rollout until March or April 2019, Bloomberg added, citing company CEO Brent Willis's address to investors at the B. Riley FBR Consumer & Media Conference in New York.

* Distiller Beam Suntory, a subsidiary of Japan's Suntory Holdings Ltd., said its CEO and chairman, Matt Shattock, will step down from the chief executive role in April 2019, according to a release. Shattock, who has led the company for 10 years and will remain as non-executive chairman, will be succeeded as CEO by current COO Albert Baladi.

TOBACCO & SMOKING PRODUCTS

* E-cigarettes manufacturer Juul Labs Inc. filed a complaint with the U.S. International Trade Commission demanding the 18 companies that "blatantly emulated the distinctive design" of Juul's e-cigarettes to be banned from selling such products, CNBC reported. The company also argued that the new entrants are making only "half-hearted attempts if any" to prevent youth use, the report said. The FDA recently started strong enforcement action against e-cigarette manufacturers, warning that it may require them to pull flavored e-cigarettes from the market as part of a crackdown on an "epidemic" among underage users.

INDUSTRY NEWS

* U.S. Agriculture Secretary Sonny Perdue said the United States "probably made a mistake" in becoming too dependent on China for trade, Reuters reported, citing Perdue's remarks to the fall forum of North American Meat Institute. According to the report, the U.S. administration is now pursuing new trade deals in countries within the European Union and India, among others, Perdue added.

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The day ahead

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

In Asia, the Hang Seng slipped 0.19% to 26,572.57, and the Nikkei 225 declined 0.80% to 23,783.72.

In Europe, around midday, the FTSE 100 was down 0.49% to 7,382.69, and the Euronext 100 was down 0.31% to 1,044.33.

On the macro front

The employment situation report, the international trade report, the consumer credit 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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