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Asos shares sink 40% on profit warning; H&M fiscal Q4 group sales up 6% YOY

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Asos shares sink 40% on profit warning; H&M fiscal Q4 group sales up 6% YOY

TOP NEWS

* U.K.-based fashion retailer Asos PPLC shares dropped more than 40% after it revised its full-year guidance and issued a profit warning due to significant deterioration in November. The company is now expecting sales growth of 15% for the year ending August 2019, compared to the previous range of 20% to 25%. The retailer also revised its EBIT margin from 4% to 2%. The group's total sales for the first quarter reached £656 million, an increase of 14% from the year-ago period.

* H & M Hennes & Mauritz AB (publ)'s shares fell 7% after the fashion retailer reported a 6% increase in group sales including VAT for the fourth quarter of fiscal 2018. Total sales for the three months ended Nov. 30 reached 65.45 billion Swedish kroner, up from 58.48 billion kroner in the year-ago period. Sales excluding VAT jumped 12% to 56.43 billion kroner from 50.41 billion kroner.

TEXTILES, APPAREL AND LUXURY GOODS

* Apparel retailer Canada Goose Holdings Inc. delayed the opening of its first flagship store in China as tensions between the two countries grow over the arrest of Huawei Technologies Co. Ltd.'s CFO in Canada, Hong Kong's South China Morning Post reported. However, the retailer said it postponed the opening of its store in Beijing because of the ongoing construction.

* DIESEL USA Inc.'s founder Renzo Rosso is interested in buying Italian apparel retailer Roberto Cavalli SpA through his holding company OTB, Reuters reported, citing local newspaper Il Sole 24 Ore. According to the report, about 10 companies have shown interested in buying Cavalli, which is owned by private equity firm Clessidra.

* Prada SpA will remove its "Pradamalia" product line from sale after the items were associated with "racist and denigrating blackface imagery," New York local news website Gothamist reported. According to the report, the products resemble images of blackface, which is viewed by the African-American community as a racially insensitive representation of their appearance. In a statement to the news site, the Italian fashion house reportedly said: "Prada Group abhors racist imagery. The Pradamalia are fantasy charms composed of elements of the Prada oeuvre. They are imaginary creatures not intended to have any reference to the real world and certainly not blackface. We abhor all forms of racism and racist imagery. We will withdraw all of the characters in question from display and circulation."

* Kering SA said Patricia Barbizet resigned as vice chairman of the company's board. The announcement comes less than a month after Barbizet was appointed a director of French alcoholic drinks maker Pernod Ricard SA. Kering named Héloïse Temple-Boyer, deputy CEO of the Pinault family's investment vehicle, Artemis SA, as Barbizet's replacement on its board.

MULTILINE RETAIL

* Sears Holdings Corp. reported an increase of 3.2% in the same store sales while its unit Kmart Holding Corp.'s sales increased 6.1% for the third quarter ended Nov. 3. Revenue for the quarter dropped about 23.5% to $2.74 billion from $3.58 billion in the year-ago period. The company closed 101 stores during the period — 73 Sears and 28 Kmart stores.

* British American Tobacco PLC announced a slew of changes to its management board, including the removal of the COO and group business development director roles. CEO Jack Bowles was the group's COO for international operations before he was named chief executive in September. Meanwhile, Group Business Development Director Naresh Sethi will step down at the end of the second quarter of 2019, according to the announcement. The company said it is also creating two new management board roles, the director for new categories and director for digital and information, effective Jan. 1, 2019. It appointed Paul Lageweg as director for new categories and Marina Bellini as director for digital and information.

E-COMMERCE

* JD.com Inc. launched an artificial intelligence-based four-wheeled robot that will be used for delivering products to customers' doorsteps, the Nikkei Asian Review reported. The company rolled out 20 robots, each with 22 compartments for storing customers' items. The robots can deliver goods to locations up to 5 kilometers from its base, at a speed of up to 20 kilometers per hour.

* German e-commerce company Zalando SE partnered with Belgian courier company bpost SA/NV to test a new technology that allows Belgian customers to remotely give couriers access to their home to drop off and pick up packages. When a bpost courier rings the "smart doorbell" connected to the customer's phone, the customer identifies the courier and remotely unlocks the door. The courier drops off the package and closes the door. Customers can also stream the delivery process remotely, interact with the courier or deny access to their home at any time.

* The International Olympic Committee launched its first Olympic store on Alibaba Group Holding Ltd.'s online platform Tmall. The store will offer official products developed as part of its Olympic core licensing collections to Chinese customers.

* Amazon.com Inc. is eliminating unprofitable products from its range and encouraging manufacturers to improve their packaging in order to increase sales, The Wall Street Journal reported. The e-commerce giant is reportedly moving away from cheaper, lower-margin items and has talked to companies such as Coca-Cola Co. and Unilever PLC unit Seventh Generation about revising their selling strategies.

HOUSEHOLD AND PERSONAL PRODUCTS

* South Korean beauty products company AMOREPACIFIC Group's unit Innisfree expanded its footprint in the Southeast Asian market with the opening of its first store in Philippines, Inside Retail reported. The store covers an area of 148 square meters and offers a complete range of Innisfree items. The company plans to launch an online channel and three new stores in Manila.

FOOD AND STAPLES RETAILING

* The Competition Appeal Tribunal granted J Sainsbury PLC and Asda Stores Ltd.'s request for more time to review evidence and submit documents to support their proposed merger, which the Competition and Markets Authority is investigating. In a brief statement released Dec. 14, the U.K. grocers said the court ruled in their favor and found that the timetable for responding to materials and attending a main party hearing were both "unfair."

* Coca-Cola FEMSA SAB de CV said it completed the sale of its 51% stake in Coca-Cola FEMSA Philippines Inc. back to U.S. soft drinks giant Coca-Cola Co., marking FEMSA's exit from the Southeast Asian country. Coca-Cola FEMSA sold the shares, which were held by its subsidiary Controladora de Inversiones en Bebidas Refrescantes SL, for $715 million.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Steinhoff International Holdings NV said the company voluntary arrangements it proposed for its Steinhoff Europe AG and Steinhoff Finance Holding GmbH units have been approved by the creditors and their respective members. "The agreements reached today with creditors of the group's key finance companies are key to bringing in a new period of financial stability for the group and enabling management to focus on maximizing the potential of the group's various businesses," Commercial Director and CEO Designate Louis du Preez said in a statement.

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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 retreated 0.03% to 26,087.98. The Nikkei 225 rose 0.62% to 21,506.88.

In Europe as of midday, the FTSE was down 0.47% to 6,812.80, and the Euronext 100 fell 0.69% to 936.76.

On the macro front

The Federal Reserve Bank of New York's Empire State Manufacturing Survey, the Housing Market Index 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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