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Ahold Delhaize cuts 2018 EPS on new IFRS rule; Philip Morris trims FY'19 outlook


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Ahold Delhaize cuts 2018 EPS on new IFRS rule; Philip Morris trims FY'19 outlook


* Dutch retailer Koninklijke Ahold Delhaize NV updated its financial statements to account for the impact of IFRS 16, a new financial reporting standard that requires lease obligations to be moved on the balance sheet, which came into effect Jan. 1. The new reporting standard will impact retailer's certain key performance indicators due to its lease portfolio, which includes stores, distribution centers, offices and other assets. It said it now expects underlying EPS of €1.57 for fiscal 2018, down €0.03 from its previous outlook of €1.60. Also, the company incurred a €177 million decrease in free cash flow due to repayment of finance leases not previously included in the definition of the metric. The company reiterated its pre-IFRS 16 guidance for fiscal 2019 and continues to expect underlying earnings per share to grow by high single-digit percentage.

* Philip Morris International Inc. further reduced its diluted EPS outlook for fiscal 2019 after its Canadian subsidiary secured creditor protection amid a class-action lawsuit in Quebec. The New York-based tobacco maker now expects diluted EPS for fiscal 2019 to be at least $4.90 compared to its previous outlook of at least $5.28, which was already lowered from the initial forecast of $5.37. The latest forecast, however, still represents an 8% increase in adjusted diluted earnings per share of $4.84 in 2018, Philip Morris said in a release.


* U.K. retailer Tesco PLC said it will remove a selection of plastic-wrapped fruit and vegetable to reduce packaging waste, The Guardian reported. Under the month-long trial at its Extra stores in Watford and Swindon, Tesco will remove plastic packaging from 45 foods, including onions, apples, bananas and avocados, where loose alternatives are available, the report said. The move follows the company's May 2018 announcement to ban hard-to-recycle plastic packaging by 2019 and make all packaging fully recyclable by 2025.

* U.K. grocers J Sainsbury PLC and Asda Stores Ltd. offered to close between 125 and 150 stores and sell a number of filling stations, likely about 38, to either grocery buyers or fuel operators, in order to gain regulatory approval for their merger, as a remedy package in response to the Competition and Markets Authority's, or CMA's, Feb. 20 statement that it may block the deal. The CMA said it will issue its final decision on the matter by April 30.

* Japan-based Duskin Co. Ltd. will close all its Mister Donut (Shanghai) Food Co. Ltd. stores in Shanghai, China, after high costs forced it to exit the market, the Nikkei Asian Review reported, citing an announcement on the company's website. Mister Donut will close all 10 shops after nearly 20 years of business as competition grew too intense and pushed up prices, the report said. A company spokesman said Duskin could re-enter the market later on, possibly through franchise deals, and that China remains "an attractive region" to the Japanese company. Duskin said it has no plans to withdraw from other Asian markets where it operates Mister Donut stores — Indonesia, the Philippines, Taiwan and Thailand.

* The Kroger Co.-owned QFC said it will phase out single-use plastic bags beginning April 1. The Bellevue, Wash.-based QFC supermarket chain will donate $1 from reusable bag sales throughout April to the nonprofit environmental group The Nature Conservancy. In August 2018, Kroger announced its plan to ban single-use plastic bag across all its stores by 2025, as part of its Restock Kroger sustainability initiative.

* Finnish food retailer Kesko Oyj adopted IFRS 16 Lease accounting standards, which came into effect Jan. 1. In line with this, the retailer's comparable operating profit for full year 2018 increased €96 million through continuing operations. The group's comparable EPS of €2.47 suffered a loss of 2 cents due to implementing the new IFRS standards.


* Swiss food giant Nestlé SA opened a new research and development center in Beijing and a system technology hub in Shenzhen to accelerate trend-based innovation in China to meet fast-changing consumer demand. The Beijing R&D center will focus on developing new food and beverage products, with over 40 specialists working across multiple product categories, while the technology hub is an extension of the company's center in Orbe, Switzerland, and will focus on new ideas for beverage systems and components.

* A unit of Japanese brewer Kirin Holdings Co. Ltd. started exporting its Chateau Mercian wine to London to leverage the new EU-Japan trade deal, the Nikkei Asian Review reported, citing sources. Kirin's winemaker, Merican, will initially ship about 300 cases of its Fuefuki Koshu Gris de Gris and Yamanashi Koshu wines to London, priced at $24 and $21, respectively. Based on the sales, it will decide about its further expansion into Europe. Merican sells 7 million cases a year in Japan, Singapore, the U.S. and Hong Kong.


* Archer-Daniels-Midland Co. said it nominated Dr. Lei Zhang Schlitz for election as a board of director at the company's annual shareholder meeting May 1, as Daniel Shih decided to step down from the board and will not seek re-election. The company added that it will create a new board committee that will focus on sustainability and corporate responsibility. The committee will be launched in May and led by director Suzan Harrison.


* New Zealand dairy company The a2 Milk Co. Ltd. said it named Li Xiao CEO of its operations in Greater China, effective April 29 and will oversee a2 Milk's growth plans for the region. Xiao previously worked at Nike Inc. and Restaurant Brands International Inc.'s Burger King and most recently served at Wanda Group Co. Ltd.'s kids entertainment division.

* U.S. meat producer Pilgrim's Pride Corp. said the company appointed Jayson Penn as its new CEO, effective immediately. Penn is the president of Pilgrim's Pride USA. He will succeed Bill Lovette, who will retire as the company's president and CEO. Lovette will provide strategic advisory services to the company until July 2020.

* Nomad Foods Ltd. launched a new range of meat-free products, containing pea protein, called Green Cuisine, in the U.K. under its Birds Eye brand. Green Cuisine offers plant-based burgers, sausages and Swedish-style meatballs to capitalize on the meat-free trend. The frozen food retailer launched the meat-free product line after the success of its pea-protein range Pease in Sweden, Norway, Finland and Denmark. The new products will be available from March 21, the company said.


* The U.S. Food and Drug Administration released final guidance limiting how specialty vape shops that stock e-cigarettes can modify the devices before selling them to consumers, though some of the largest e-cigarette makers, including Juul Labs Inc., Imperial Brands PLC and Japan Tobacco Inc., already recommend against tinkering with their products. Vape shops cannot modify a pod-based e-cigarette with parts not manufactured specifically for that device, according to the agency's guidance, which finalizes draft rules first issued in 2017. Pod-based, or "closed," e-cigarettes use prefilled pods containing a nicotine-infused liquid that is heated to produce flavored vapor.


* Pizza chain Papa John's International Inc. said it appointed four-time NBA champion Shaquille O'Neal as director, and the basketball player-turned-businessman will invest in nine Papa John's restaurants in Atlanta. O'Neal will also serve as a brand ambassador for the pizza chain, which is trying to improve its image after its founder and former chairman John Schnatter used a racial slur during a conference call. O'Neal is founder and owner of Big Chicken in Las Vegas and Shaquille's in Los Angeles. He also owns a Krispy Kreme Doughnuts Inc. franchise in Atlanta.

* Domino's Pizza Inc. said it opened its first store in Bangladesh through its master franchisee Jubilant FoodWorks Ltd. and local operator Golden Harvest. The store is in Dhaka's Dhanmondi area and has a "pizza theater" layout, which allows diners to see the pizza-making process. Domino's plans to open more locations in the South Asian country later this year.

* Domino's Pizza Group PLC, which operates the Domino's Pizza Inc. chain in the U.K., appointed Ian Bull as its independent nonexecutive director, effective April 18. Previously, Bull has held various senior roles at companies, including BT Group, Greene King PLC, Ladbrokes PLC and Parkdean Resorts.


* Portugal's competition authority has accused six supermarket chains — Sonae SGPS SA-owned Modelo Continente Hipermercados SAModelo Continente Hipermercados SA, Intermarché SAS, Pingo Doce Distribuição Alimentar SA, and local units of Lidl Stiftung & Co. KG and E.Leclerc SA — for fixing prices of beer and beverages between 2003 and 2017, Reuters reported, citing the authority's statement. The retailers reportedly colluded with distributors Heineken NV-owned Central de Cervejas e Bebidas and local supplier Super Bock Bebidas SA. The report further cited the statement saying these activities are "equivalent to a cartel." Central de Cervejas e Bebidas and Pingo Doce denied any wrongdoing, as the former said in a statement that it will cooperate in the investigation, the report said. The other companies did not comment.

The day ahead

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

In Asia, the Hang Seng Index was down 2.03% to 28,523.35. The Nikkei 225 retreated 3.01% to 20,977.11.

In Europe, around midday, the FTSE 100 was down 0.26% to 7,188.88, and the Euronext 100 fell 0.29% to 1,023.84.

On the macro front

The Federal Reserve Bank of Chicago's National Activity Index and the Dallas Fed's Manufacturing Survey 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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