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Walmart lowers FY'19 EPS outlook; Court approves $300M financing for Sears


* 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.

* A bankruptcy court in New York approved a $300 million financing deal to keep Sears Holdings Corp. in business through the holiday season after it filed for bankruptcy protection. It also received authorization to continue paying employee wages and to honor member programs including warranties and promotions. The company is also negotiating a $300 million subordinated debtor-in-possession financing with resigned CEO Eddie Lampert's hedge fund ESL Investments to support the business during the financial restructuring process.


* Kering SA brand Gucci is hesitant to partner with Alibaba Group Holding Ltd. and Inc. due to counterfeiting concerns on many Chinese e-commerce platforms, the Financial Times reported, citing CEO Marco Bizzarri. Bizzarri reportedly said Gucci would rather "wait and see" instead of taking a risk with Alibaba and Luxury brands owned by Kering sued Alibaba in 2015 for allowing vendors to sell fake products on its platform but later dropped the lawsuit and teamed up with the Chinese giant in 2017 to protect intellectual property rights.

* Apparel accessories producer IQ Brands, a portfolio company of lower-middle-market private equity firm Huron Capital Partners LLC, paid an undisclosed sum to purchase novelty socks manufacturer Wheel House Designs. The deal is the fourth add-on acquisition for the IQ Brands platform.

* Thread raised £17 million in a funding round led by H & M Hennes & Mauritz AB, which plans to harness the London-based online fashion startup's artificial intelligence software through a retail partnership, The Daily Telegraph reported. Thread, which specializes in using a combination of AI technology and human stylists to provide fashion suggestions to customers, plans to expand internationally and into women's fashion, the report said, citing CEO Kieran O'Neill.

* Dozens of Fu Yuen Garment Co. Ltd. workers, who have been on strike to demand the reinstatement of 30 employees that were fired for campaigning for better work conditions, were injured in a clash with 20 to 30 assailants, witnesses told Reuters. Fu Yuen Garment reportedly produces clothes for Lidl Stiftung & Co. KG and Joules Group PLC. A Lidl spokesman reportedly said the company will assess the situation "and take action, if necessary," while a Joules spokeswoman said that the apparel retailer has stopped working with the factory since April.

* Clessidra SGR SpA enlisted the help of Rothschild to evaluate the possibility of bringing in a minority funding partner for fashion giant Roberto Cavalli SpA, Reuters reported, citing undisclosed sources. Italian private equity firm Rothschild, which holds 90% of the fashion brand through Varenne, did not comment on the matter, according to the report.

* Burberry Group PLC will launch product releases called B Series on the 17th day of every month in a move to "excite customers with new deliveries and frequent communication." The first collection, featuring a white T-shirt and jersey sweatshirt with Burberry's monogram, will be available Oct. 17 and will be sold exclusively on Burberry's Instagram and WeChat accounts and on Line Corp.'s and Kakao Corp.'s mobile platforms.

* Footasylum plc reported an adjusted loss before tax of £4 million for the first half of 2019 due to tough high street conditions and delays in store openings and expansions. Footasylum also said it will scale back its planned store expansion program to two new stores and two upsizes annually from its previous target of up to eight new stores per year, along with a number of store upsizes in key locations. For the 26 weeks ended Aug. 25, the footwear retailer posted adjusted diluted loss of 3.98 pence per share, compared to an adjusted diluted EPS of 1.70 pence in the year-ago period, while revenue grew 19% year over year to £98.6 million.

* Claire's Stores Inc. has no plans of entering a company voluntary arrangement, an insolvency process that will allow the U.S. company to close some stores and negotiate rents in the U.K., London's City A.M. reported, citing CEO Ron Marshall. Marshall reportedly denied reports that the apparel retailer is exploring options for a restructuring, adding that it has "no plans for either a CVA or major store closures in the U.K. in the foreseeable future." The news follows Claire's announcement that its U.S. arm has emerged from bankruptcy after it completed its financial restructuring, which allowed the company to eliminate about $1.9 billion of debt and secure $575 million in new capital.


* Inc. will invest $10 million in a closed loop fund that provides 3 million households in the U.S. with curbside recycling infrastructure. The move aims to divert one million tons of recyclable material into the recycling stream and eliminate the equivalent of two million metric tons of carbon dioxide by 2028.

* Amazon is likely to buy a stake of at least 7% to 8% in India's Future Group at an estimated value of about 25 billion Indian rupees, sources told CNBC-TV18. Sources reportedly said the deal will likely be signed over the next two weeks, but discussions about the valuation are yet to be finalized. The development comes after a Business Standard report in August that Amazon had begun formal negotiations to invest about $600 million to $700 million in Future Group for a 12% to 15% stake.


* The U.K.'s Competition and Markets Authority said it will consider the impact of J Sainsbury PLC's proposed merger with Walmart Inc.-owned Asda Stores Ltd. on suppliers as part of its investigation. The regulator said it will look at "whether the merged company could use its increased buyer power to squeeze suppliers" into charging higher prices to other stores that compete with the combined entity.


* Alternative investment manager Arcapita Inc. capitalized NuYu, which will allow the Saudi Arabian boutique fitness chain for women to deploy more than 250 million Saudi Arabian riyals to expand its network to more than 30 sites across the country.


* Seasonally adjusted U.S. retail sales ticked up 0.1% month over month to $509.04 billion in September, the same pace of increase as in August, according to an advance estimate from the U.S. Department of Commerce's Census Bureau. Econoday had projected sales would rise 0.6% in monthly terms. In annual terms, retail sales were up 4.7%.

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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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