TOP NEWS
* Walmart Inc.'s deal to buy a majority stake in India-based e-commerce startup Flipkart Online Services Pvt. Ltd. will weigh on the company's balance sheet for the next few quarters. However, it is a price that is well worth a foothold in one of the world's fastest-growing e-commerce markets, Walmart executives told analysts in a conference call. The deal, expected to close by the end of the 2018 calendar year, would reduce Walmart's full-year 2019 earnings by approximately 25 cents to 30 cents per share if the deal is completed in the company's fiscal second quarter. For fiscal 2020, Walmart anticipates a hit of 60 cents per share on the transaction.
* Panasonic Corp. reported jumps in profit and revenue for full-year fiscal 2018 ended March 31. The Japanese consumer electronics company said attributable net profit for the fiscal year came in at ¥236.0 billion, up 58% from ¥149.4 billion in fiscal 2017 and above the S&P Capital IQ consensus estimate of ¥209.1 billion. Basic EPS stood at ¥101.20, up from ¥64.33 in the prior fiscal year and beating the S&P Capital IQ consensus estimate of ¥89.35. However, it was noted that ¥72.3 billion of extraordinary loss was recorded to the parent alone for the provision of allowance for certain subsidiaries and associates but not recognized for the group on a consolidated basis.
TEXTILES, APPAREL AND LUXURY GOODS
* Burberry Group PLC filed a lawsuit against Target Corp. for allegedly copying the luxury goods company's signature check print on its products, Business Insider reported, citing court documents filed in New York. Burberry reportedly is seeking $2 million for each trademark infringement, plus the coverage of its legal fees, apart from requesting that the general merchandiser cease production and sale of the products. "We are aware of the filing by Burberry and hope to address the matter in a reasonable manner," a spokesperson for Target was quoted as saying.
* Swiss luxury house Compagnie Financière Richemont SA said it now holds 94.99% of the ordinary shares of YOOX Net-A-Porter Group SpA, or YNAP, following the end of its takeover offer. Richemont, which previously held 24.97% of the Italy-based online luxury fashion retailer, in January offered up to €2.69 billion to buy all the shares of the company that it did not already own, at a consideration price of €38 per share. The new stake exceeds a 90% threshold that triggers an obligation for Richemont to buy out YNAP's remaining investors and delist the company.
E-COMMERCE
* EBay Inc. said it will relaunch eBay India and sell its holdings in Flipkart Online Services Pvt. Ltd. for $1.1 billion after Walmart Inc. announced that it agreed to acquire a majority stake in the Indian e-commerce company. The same day, South African internet and entertainment firm Naspers Ltd. sold its 11.18% stake in Flipkart to Walmart in a strategy to realize value from businesses it helps to build. Meanwhile, The Economic Times of India reported that company co-founder Sachin Bansal plans to sell his 5.5% holding in Flipkart for about $1 billion after announcing his departure from the privately held online retailer in a Facebook post.
* Online travel services giant Booking Holdings Inc., formerly known as Priceline Group, reported first-quarter profit and adjusted EPS that topped analyst targets. For the three months ended March 31, non-GAAP net income per diluted common share for the period came in at $12, higher than the S&P Capital IQ consensus estimate for normalized EPS of $10.66. For the second quarter ending June 30, Booking Holdings forecasts non-GAAP net income to come in between $795 million and $825 million, or between $16.35 and $17 per diluted share.
* Amazon.com Inc. is working with homebuilder Lennar Ventures to demo Amazon Experience Centers, model smart homes that allow customers to control the lights, TV, shades and other appliances using the company's voice assistant Alexa. Customers will also find out how to schedule auto-deliveries of household essentials, reorder goods with the press of a button, and book recurring or on-demand home services through Amazon.
* Chinese social e-commerce platform Meili Inc. is looking to raise $500 million in a U.S. IPO in the second half, Reuters reported, citing sources with direct knowledge of the matter. The sources said the company hired Morgan Stanley to lead the listing, alongside Credit Suisse and China Renaissance. Meili and China Renaissance did not immediately respond to requests for comment by S&P Global Market Intelligence, while Morgan Stanley and Credit Suisse could not be reached for comment.
FOOD AND STAPLES RETAILING
* Wm Morrison Supermarkets PLC reported a 3.6% increase in group like-for-like sales, excluding fuel, for the 13 weeks ended May 6, driven by a 1.8% growth in retail sales and a 1.8% sales increase from the company's wholesale channel. According to a report by the Financial Times, Morrisons' executives declined to comment on the transaction between U.K. rival J Sainsbury PLC and Walmart's local unit, Asda Stores Ltd., during a call to discuss results.
HYPERMARKETS AND SUPERCENTERS
* British private equity firm OpCapita LLP is among the potential bidders for Wesfarmers Ltd.'s struggling U.K. home improvement chain Homebase, Sky News reported, citing a source. The development follows a report in April that the Australian conglomerate has started approaching potential buyers for Homebase, following the chain's underperformance in the first half of fiscal 2018. OpCapita previously owned electrical retailer Comet Group Ltd., which fell into administration in 2012 after the equity firm failed to turn around the business.
HOUSEHOLD DURABLES AND SPECIALTY RETAIL
* Chinese consumer electronics company Hisense Electric Co. Ltd. is set to take over Gorenje d.d. as it agreed to buy 50% plus 1 share of the Slovenian household appliances maker at a price of €12 per share. Gorenje said Hisense committed to launching a takeover intent within 15 days and will place a takeover offer according to statutory deadlines.
INDUSTRY NEWS
* U.S. imports of retail goods are projected to set monthly records this summer despite the threat of tariffs on hundreds of billions on goods shipped between the U.S. and China, according to a report by the National Retail Federation. In its "Global Port Tracker" report, consulting firm Hackett Associates forecast that retail goods to be imported in July and August will top the previous record of 1.83 million 20-foot equivalent units, or TEU, worth of goods set in August 2017. April imports are projected to be up 6.4% year over year to 1.73 million TEU, while May imports are expected to rise 4.3% year over year to 1.82 million TEU, the report added.
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Analysts voice concern about Walmart's e-commerce prospects after Flipkart deal
The day ahead
Early morning futures indicators pointed to a mixed opening for the U.S. market.
In Asia, the Hang Seng rose 0.89% to 30,809.22, while the Nikkei 225 was up 0.39% to 22,497.18.
In Europe, around midday, the FTSE 100 fell 0.35% to 7,635.86, and the Euronext 100 was down 0.16% to 1,068.16.
On the macro front
The consumer price index, the jobless claims report, the EIA natural gas report, the treasury budget report, the Fed balance sheet and the money supply report are due out today.
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