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Walmart Q1'19 earnings jump 14% YOY; Kroger to redefine US grocery with Ocado


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Walmart Q1'19 earnings jump 14% YOY; Kroger to redefine US grocery with Ocado


* Walmart Inc. reported fiscal first-quarter earnings jumped 14% year over year, beating expectations, aided by a 33% jump in online sales in the U.S. and an 11.7% rise in international sales. The retail giant said adjusted EPS for the 13 weeks to April 27 climbed to $1.14 from $1.00 in the same period a year ago, outpacing a mean consensus of analysts' estimates for normalized EPS of $1.12, according to data compiled by S&P Capital IQ. Revenue rose to $122.7 billion from $117.5 billion, an increase of 4.4%. International sales ticked up to $30.3 billion from $27.1 billion as eight of its 11 markets posted gains.

* Kroger Co. and Ocado Group PLC agreed to a deal under which the U.S. grocer will acquire a 5% stake in the U.K. online grocery retailer and will exclusively use Ocado's technology for food distribution-related activities. Under the terms of the deal, Ocado will help Kroger redefine the grocery customer experience in the U.S. with its Ocado Smart Platform, a proprietary end-to-end solution for online grocery services. In lunchtime trading in London, Ocado's shares soared 348 pence, or 63.04%, to 900 pence.


* LVMH Moët Hennessy Louis Vuitton SE-owned Givenchy launched an online shop on China's WeChat, joining a slew of luxury brands such as Prada SpA and Cartier in courting wealthy Chinese consumers on the social media platform. The new WeChat boutique, which allows shoppers to make purchases directly in the app, features categories including handbags, accessories, shoes and apparel.


* Macy's Inc. raised its earnings forecasts for fiscal-year 2018 as it reported results for the first quarter that exceeded analysts' expectations. The department store operator now expects adjusted earnings per diluted share in the range of $3.75 to $3.95 for full-year 2018, up from the previous guidance range of $3.55 to $3.75. The Ohio-based company's first-quarter adjusted EPS came in at 48 cents, beating the S&P Capital IQ mean consensus estimate for normalized EPS of 35 cents.

* Department store chain Mothercare PLC plans to close 50 stores in the U.K. by June 2019 and reduce leases of 21 outlets as part of the company's refinancing and restructuring program. In Mothercare's stock exchange filing, interim executive chairman Clive Whiley also announced that Mark Newton-Jones agreed to return as the struggling chain's CEO with David Wood stepping in as group managing director. Mothercare is targeting to cut its store count to 73 locations by fiscal 2022 from its current 137 stores to cut costs by at least £15 million in 18 months.


* California-based online fashion brand Lulus secured a $120 million investment, which it will use to expand its "affordable luxury" business, from asset management firms Institutional Venture Partners and Canada Pension Plan Investment Board.

* Jim Freeman, vice president of Inc.'s Alexa division, left the company in April to join German online retailer Zalando SE, adding to the recent wave of resignations from the e-commerce giants key executives, CNBC reported. The exit of over 12 Amazon executives and senior staff since July point to either burnout from the company's high-pressure culture or better offers from firms like Airbnb Inc. and Uber Technologies Inc., recruitment experts told the news outlet.

* Amazon will host an event in Hangzhou, China, the hometown of its Chinese rival Alibaba Group Holding Ltd., in the coming weeks as it seeks to be a middleman in the "global flow of goods," Bloomberg News reported. The "Coming Together For U" event will link online merchants to 400 Chinese manufacturers looking to sell goods like electronics and car parts more directly to American and European customers, according to the report.

* YOOX Net-A-Porter Group SpA, or YNAP, will be delisted from the Milan Stock Exchange on June 20 in connection with Compagnie Financière Richemont SA's takeover of the online high-fashion retailer. The Swiss luxury house, which previously owned 24.97% of the Italian company, said it accumulated 94.999% of YNAP's ordinary shares through a voluntary public tender offer. On May 18, the Cartier brand owner will pay €2.47 billion in cash to holders of the YNAP shares that have been tendered so far in the offer and will buy out the remaining shares for up to €300.1 million.


* Walgreens Boots Alliance Inc.'s Walgreen Co., Kroger Co., Albertsons Cos. Inc. and HEB Grocery Company, LP are suing Allergan PLC for allegedly violating antitrust laws by trying to stop rivals from selling generic copies of its dry-eye drug Restasis. In a lawsuit filed in New York, the four major U.S. retailers alleged that the pharmaceutical company maintained its monopoly in the market by getting invalid patents and suing generic competitors for the alleged infringement of those patents. The companies also claimed that Allergan transferred the invalid patents to a sovereign Native American tribe to avoid legal scrutiny.

* ABC, the healthcare-focused partnership between industry giants Amazon, Berkshire Hathaway Inc. and JPMorgan Chase & Co., is struggling to find a CEO, CNBC reported. The Bezos-Buffett-Dimon joint venture was announced in January with an aim to cut the costs of healthcare and is structured as an entity "free from profit-making incentives and constraints." The group is now looking for an entrepreneur after initially interviewing healthcare executives, which included former Aetna Inc. executive Gary Loveman and ex-Medicare chief Andy Slavitt, CNBC said, citing people with knowledge of the matter.

* Pharmaceutical company Perrigo Co. PLC and household products manufacturer Reckitt Benckiser Group PLC are interested in acquiring Aspen Pharmacare Holdings Ltd.'s infant formula business, Bloomberg News reported, citing people familiar with the matter. France's Lactalis and Australia's iNova Pharmaceuticals (Australia) Pty Ltd are also considering bidding for a stake in the unit, which could fetch approximately $1 billion to $1.5 billion in a potential deal, the unnamed sources said.


* U.S. connected learning platform Chegg Inc. purchased Berkeley, Calif.-based online writing platform WriteLab Inc. for about $15 million in cash. Chegg said an additional $5 million in cash or stock may be paid to key employees of WriteLab over the next three years if they stay with the company.


* Bookmakers Paddy Power Betfair PLC and William Hill Ltd. issued revenue warnings after the U.K. Department for Digital, Culture, Media and Sport cut the maximum bet for gaming machines to £2 from £100 in an effort to reduce gambling-related incidences. Ireland's Paddy Power said the new limits for fixed-odds betting terminals will reduce its machine gaming revenue by 33% to 43%, while William Hill said that the regulatory change will impact its gaming net revenue by 35% to 45%. The London-based company also estimated that about 38% of its existing retail estate, or approximately 900 William Hill shops, will become loss-making, which may result to shop closures "within a relatively short time" after the rule is implemented.

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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 0.54% to 30,942.15, and the Nikkei 225 rose 0.53% to 22,838.37.

In Europe, as of midday, the FTSE 100 was up 0.17% to 7,747.06, and the Euronext 100 was up 0.36% to 1,077.41.

On the macro front

The jobless claims report, the Philadelphia Fed business outlook survey, the E-Commerce retail sales report, the leading indicators report, the EIA natural gas report, the Fed balance sheet and the money supply report are due out today.

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