TOP NEWS
* Sears Holdings Corp. said it will close 72 more stores in the near future as it posted a net loss attributable to shareholders of $424 million, or $3.93 per diluted share, for the fiscal first quarter ended May 5. The S&P Capital IQ consensus estimate was a loss of 21 cents on a GAAP basis. Revenue also fell to approximately $2.9 billion from $4.2 billion in the year-ago period, mostly due to store closures.
* Discount retailer Dollar General Corp. reported that fiscal first-quarter earnings increased 30.5% year over year but fell short of expectations as bad weather reduced customer traffic. The retailer said net income for the quarter ended May 4, 2018, rose to $364.9 million from $279.5 million in the period to May 5, 2017, missing a mean consensus of analysts' estimates for $379 million, according to S&P Capital IQ. Diluted EPS jumped 33.3% to $1.33 from $1.02 as net sales climbed 9% to $6.11 billion from $5.61 billion. However, same-store sales were ahead only 2.1%, due to "the effect of unseasonably cold and damp weather."
TEXTILES, APPAREL AND LUXURY GOODS
* PVH Corp. raised its EPS guidance for full year 2018 after reporting first-quarter earnings that exceeded analysts' expectations. The owner of Calvin Klein and Tommy Hilfiger brands now expects full-year EPS on a non-GAAP basis to come in between $9.05 and $9.15, higher than the prior guidance of $9 to $9.10 it provided March 28. The retailer's diluted EPS for the first quarter ended May 6 was $2.36, higher than the S&P Capital IQ mean consensus estimate of $2.25. PVH also reported a year-over-year increase in net income for the fiscal first quarter, which came in at $184.8 million, compared with $130.2 million in the three months ended April 30, 2017.
MULTILINE RETAIL
* South Korea's Lotte Group carried out its plan to consolidate the conglomerate's fashion operations, with the resulting entity to be called Lotte GFR, Yonhap News Agency reported. Retail subsidiary Lotte Shopping Co. Ltd. transferred its global fashion business to Lotte Group's apparel affiliate NCF Co. Ltd. The company reportedly plans to pursue merger and acquisition deals, import popular foreign brands and develop new labels of its own.
E-COMMERCE
* Amazon.com Inc. said it will lock Australian shoppers out of its U.S. and other overseas sites due to a new goods and services tax, or GST, regime coming into effect in the country. Under the updated GST rules that begin July 1, consumers in Australia will be required to pay a 10% tax on all goods purchased and delivered from overseas, with imported items worth less than A$1,000 no longer exempt from the levy. The same day, Amazon will start redirecting Australian shoppers from its global e-commerce sites to amazon.com.au.
FOOD AND STAPLES RETAILING
* Russian food retail chain X5 Retail Group NV announced key changes to the organizational structure of its Pyaterochka chain, opting for a macroregional management model as it seeks to streamline operations. As part of the change, five macroregions, with each macroregion concentrating on two to four former geographical divisions, will be run and supervised by directors reporting to Pyaterochka's general director.
HYPERMARKETS AND SUPERCENTERS
* Japanese retail chain AEON Co. Ltd., in partnership with Shanghai-based startup DeepBlue Technology, opened a new research center in Shanghai to improve its retail operations by using artificial intelligence and electronic payments, the Nikkei Asian Review reported. The facility will introduce a security system and cleaning robots at an Aeon shopping center in Jiangsu province that will open in spring 2019. Aeon also will invest ¥500 billion by fiscal 2020 to automate its distribution process and develop its system that connects its physical stores and online platforms.
* Walmart Inc. unveiled a new employee benefit program that would give its associates in the U.S. access to affordable college degrees in business or supply chain management. In partnership with education benefits platform Guild Education, Walmart said it will subsidize the cost of tuition, books and fees, allowing associates under the program to contribute only $1 a day toward a college degree and eliminating the need for student loan debt.
HOUSEHOLD DURABLES AND SPECIALTY RETAIL
* Suning.com Co. Ltd. has divested $1.5 billion worth of shares in Alibaba Group Holding Ltd., the Chinese home electronics retailer disclosed in a Shenzhen Stock Exchange filing. The sale conducted through the New York Stock Exchange involves 7,660,000 shares. Suning.com expects to make a net profit of about 5.61 billion yuan from the deal, after which it will have 13,164,689 shares equivalent to a 0.51% stake in the Chinese e-commerce giant.
* The Japanese arm of furniture retailer IKEA will begin buying back its baby furniture at nine of its 10 stores in the country, the Nikkei Asian Review reported. Within 90 days of purchase, a customer can trade in baby furniture and get a loaded prepaid card with half the purchase price. IKEA Japan also reportedly plans to introduce furniture rentals within two years.
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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 up 1.37% to 30,468.56, while the Nikkei 225 rose 0.83% to 22,201.82
In Europe, around midday, the FTSE 100 rose 0.13% to 7,699.53, and the Euronext 100 gained 0.27% to 1,056.77.
On the macro front
The jobless claims report, the Bureau of Economic Analysis' personal income and outlays report, the Chicago PMI, the pending home sales index, the EIA natural gas report, the EIA petroleum status report, the Fed balance sheet and the money supply report are due out today.
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