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Walmart cuts FY'19 earnings forecast; BAT lowers revenue target for new products

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Walmart cuts FY'19 earnings forecast; BAT lowers revenue target for new products

TOP NEWS

* Walmart Inc. lowered its adjusted EPS guidance for fiscal 2019 to a range of $4.65 to $4.80, from the previous $4.90 to $5.05, as a result of the expected 25 cents per share dilution from its investment in Flipkart Online Services Pvt. Ltd. Walmart added that it expects its adjusted EPS to continue to decline by a low-single-digit percentage in 2020 compared with a year earlier, inclusive of the impact from the Flipkart transaction. The retail giant also forecast that total sales growth for fiscal 2020 will be 3% or greater despite a hit of about 100 basis points from the deconsolidation of its Brazilian operations and planned tobacco sales reduction at the company's Sam's Club unit.

* British American Tobacco PLC cut its full-year revenue target for its vaping products and tobacco heating devices to £900 million from its previously announced target of £1 billion, citing a flat market in Japan and its Vuse Vibe e-cigarette recall in the U.S. The company warned that its full-year adjusted EPS growth to be impacted by currency fluctuation by about 7%, assuming exchange rates remain unchanged for the rest of the year. BAT also expects to exceed its high single-digit constant currency adjusted EPS growth target in 2018.

FOOD RETAIL & DISTRIBUTION

* Supermarket operator Tesco PLC has more than doubled its plant-based range of meals to meet the burgeoning demand for vegan food in the U.K. The British grocer said the first batch of the 26 new products were introduced Oct. 15. Tesco plans to further expand the range throughout November and December.

* Seven & i Holdings Co. Ltd. reported that total sales across its Seven-Eleven Japan stores rose 7.7% year over year in September. Same-store sales for the company's Japanese convenience shop unit increased 5.1% from the year-ago period. The average spend per customer grew 7.5%, while the number of customers declined 2.2% year over year. Seven & i's overseas unit, 7-Eleven Inc., posted a 26.3% rise in net sales for the month as gasoline revenue soared 43.7% and merchandise sales jumped 11.7%.

* Alipay Singapore Holding Pte. Ltd., a unit of Chinese e-commerce giant Alibaba Group Holding Ltd., and its affiliates agreed to invest about $210 million in online food delivery company Zomato Media Private Ltd., which is controlled by Info Edge (India) Ltd., the Nikkei Asian Review reported. Following the deal, Info Edge's shareholding in Zomato will be reduced to 27% from almost 31% at the end of March, the report added, citing Info Edge's statement.

* Supermarket chain The Kroger Co. is teaming up with California-based online wine retailer Drinks Holdings Inc. to launch a wine delivery business, Bloomberg News reported. The delivery service will initially be offered to Kroger customers in 14 U.S. states, with plans to expand to more locations later, according to the report. The wines, which will be from a variety of regions such as California and France, will reportedly be priced between $10.83 and $16.67.

* Singapore-based online marketplace Honestbee Pte. Ltd. will be opening its own dining and retail concept store, called Habitat by Honestbee, in the city-state on Oct 18. The concept store has a total area of 60,000 square feet and is a supermarket, an online fulfillment center and an innovation hub. It also offers a cashless checkout experience and robotic collection point.

* Private equity firm HGGC LLC agreed to lead the merger of omnichannel retail solutions provider Mi9 Retail Inc. with MyWebGrocer Inc., a software and digital media company to the grocery and consumer packaged goods industries. The merger will create a retail software platform that will aid in the retail operations of more than 500 retailers and consumer brands.

PACKAGED FOODS

* Nestlé SA-owned baby food manufacturer Gerber Products Co. and Walmart Inc. have teamed up to test Gerber's new fresh baby and toddler food brand, The Dallas Morning News reported, citing Walmart and Gerber executives. Gerber will run a pilot of the new brand called Freshful Start in 50 Walmart stores, located in Texas, Arkansas, Kansas and Missouri, beginning the week of Oct. 15. Gerber CEO Bill Partyka told the newspaper that the company developed the line to compete with startups and trends that appeal to new parents who value convenience.

* Nestlé will launch its own brand of A2 baby milk in Australia and New Zealand, challenging Auckland-based dairy company The a2 Milk Co. Ltd., which holds a dominant market share in the region, The Australian Financial Review reported. Citing an interview with Tarun Malkani, Nestlé's global business head for Wyeth Nutrition, the report added that the Swiss food and beverage giant will launch its NAN A2 brand in Wesfarmers Ltd.-owned Coles supermarkets and online in Australia in the week of Oct. 15.

* Swedish packaging supplier Duni AB said it acquired a 75% stake in sustainable packaging manufacturer BioPak Pty. Ltd. for about 410 million Swedish kroner. BioPak has three subsidiaries and it will merge them under Duni Group's business area new markets unit. BioPak will continue trading as a separate company, according to the release.

The day ahead

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

In Asia, Hang Seng gained 0.07% to 25,462.26, while the Nikkei 225 rose 1.25% to 22,549.24.

In Europe, around midday, the FTSE 100 shed 0.30% to 7,008.24, and the Euronext 100 rose 0.44% to 992.65.

On the macro front

The Redbook index for retail sales, the industrial production report, the housing market index, the Labor Department's Job Openings and Labor Turnover Survey and the Treasury International Capital 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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