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J.C. Penney gets delisting warning; Mattel shares fall over whistleblower letter

TOP NEWS

* J. C. Penney Co. Inc. received a notice of delisting from the NYSE after the company failed to comply with the exchange's rule requiring companies to maintain an average closing share price of at least $1.00 over a period of 30 consecutive trading days. The company said it plans to pursue measures, which includes a reverse stock split of J.C. Penney's common shares, if necessary, subject to stockholder approval at the retailer's next annual meeting, to regain compliance with the exchange's requirement.

* Shares of Mattel Inc. plunged 9.46% in after-hours trading on Aug. 8 to $12.16 after the U.S. toymaker withdrew its planned bond offering following the receipt of "an anonymous whistleblower letter." In an SEC filing, Mattel said it was made aware of the whistleblower letter Aug. 6. but did not provide further details, apart from saying it will "investigate the matters set forth in the letter."

TEXTILES, APPAREL AND LUXURY GOODS

* Kontoor Brands Inc.'s second-quarter adjusted EPS was 96 cents, down from $1.18 in the year-ago period, as net income dropped 37% year over year to $38 million. Revenue slid 8% year over year to $609.7 million.

* Abercrombie & Fitch Co. named Felix Carbullido, Williams-Sonoma Inc.'s executive vice president and chief marketing officer, as an independent director, effective Aug. 5. The apparel retailer expanded its board to 11 members with Carbullido's appointment.

* Fast Retailing Co. Ltd.'s Uniqlo will close one store in South Korea as the boycott of Japanese goods in the country progresses, Reuters reported. A spokeswoman reportedly clarified to Reuters that the company, which apologized to South Korean customers for an executive's "poorly expressed" remark regarding the boycotts, will close the shop due to its decision not to renew its contract on the property.

MULTILINE RETAIL

* Hudson's Bay Co. could soon reach a deal to sell its Lord & Taylor department store chain to San Francisco-based apparel rental platform Le Tote Inc., Women's Wear Daily reported, citing sources with knowledge of the matter. Hudson's Bay and Le Tote did not immediately respond to S&P Global Market Intelligence's request for comment.

* Activist investor Jonathan Litt, the founder of hedge fund Land & Buildings Investment Management LLC, wrote a letter to Hudson's Bay Co. shareholders that Chairman Richard Baker should be replaced if the offer to take the company private fails. Litt said Baker is attempting to "disenfranchise minority shareholders by offering a woefully inadequate price," adding that the chairman must have always been aware that the bid "was dead on arrival."

* Canadian Tire Corp. Ltd.'s second-quarter adjusted diluted EPS grew 13.8% year over year to C$2.97 but missed the S&P Global Market Intelligence consensus normalized EPS estimate of C$3.01. Separately, the company said it agreed to acquire Party City's Canadian business for C$174.4 million.

* Lotte Shopping Co. Ltd. posted a second-quarter net profit of 77 billion South Korean won, compared with a net loss of 214 billion won in the year-ago period, while revenue grew 1% year over year to 4.456 trillion won from 4.413 trillion won.

E-COMMERCE

* Alibaba Group Holding Ltd. President Michael Evans is one of the 17 former and current Goldman Sachs Group Inc. directors facing custodial sentences and criminal fines regarding the 1Malaysia Development Bhd. scandal, Bloomberg News reported. "We are aware of the news and will continue to monitor the situation," the Chinese company reportedly said.

* Online luxury fashion retail platform Farfetch Ltd. will buy Italy-based New Guards Group Holding SpA, which owns fashion brands including Off White, Palm Angels and Unravel Project, for a total enterprise value of $675 million.

* Digital services marketplace Fiverr International Ltd. reported its first earnings results following its IPO, posting a narrower loss per share for the second quarter of 2019. Adjusted net loss came in at 19 cents per share, versus a loss of 25 cents per share in the year-ago period, beating the S&P Global Market Intelligence consensus normalized loss estimate of 56 cents per share. Revenue rose 41% year over year to $25.9 million.

* Amazon.com Inc. has come under the scrutiny of Luxembourg's national privacy regulator over how the company handles recordings from its voice assistant Alexa, Reuters reported. Luxembourg's National Data Protection Commission is already in touch with Amazon and has asked the U.S. e-commerce giant to provide information regarding Alexa amid a rising unease over companies' use of personal data, the report said.

* On the Beach Group PLC expects its fiscal 2019 results to be below expectations as a result of the increased likelihood of a no-deal Brexit, which has caused the devaluation of the sterling. "We continue to actively explore acquisition opportunities," the company said in a statement.

HOUSEHOLD AND PERSONAL PRODUCTS

* Revlon Inc.'s second-quarter adjusted diluted loss came in at 99 cents per share, versus a loss of $1.54 per share in the year-ago period. Net sales decreased 6% year over year to $570.2 million, mainly due to declines in the company's portfolio and fragrances segments.

* Unicharm Corp. said diluted EPS for the fiscal first half of 2019 came in at ¥42.19, versus ¥49.59 in the year-ago period, as attributable profit dropped 15.7% year over year to ¥25.30 billion. Net sales increased 5.2% year over year to ¥342.50 billion. Unicharm still expects its attributable profit for the full year to grow 3.5% to ¥63.50 billion, or ¥106.92 per share, and net sales to rise 6.1% to ¥730 billion.

HYPERMARKETS AND SUPER CENTERS

* The police department of Springfield, Mo., arrested an armed white male who entered a local Walmart Inc. store Aug. 8. "The investigation is on-going and we are working to determine his motives," authorities said. The arrest comes after a mass shooting at a Walmart location Aug. 3 in Texas, following another shooting at its site in Mississippi on July 30.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* HMV Group PLC's Hong Kong business will hold a cash-only liquidation sale from Aug. 15 to Aug. 29 since the music store chain failed to find a buyer, the South China Morning Post reported, citing an interview with Wong Sun-keung, a partner at accounting firm Vision AS. The U.K.'s HMV was rescued from administration by Canada's Sunrise Records Ltd. in February.

CASINOS AND GAMING

* William Hill Ltd.'s half-year basic adjusted EPS was 5.3 pence, a 42% drop from 9.1 pence in the year-ago period, while net revenue inched up 1% year over year to £811.7 million from £802.9 million. Adjusted operating profit was down 33% to £76.2 million due to the U.K. government's decision to limit the maximum stake on fixed-odds betting terminals to £2.

* The New South Wales Independent Liquor & Gaming Authority will launch an inquiry into Hong Kong-listed Melco Resorts & Entertainment Ltd.'s proposed A$1.76 billion acquisition of a 19.99% stake in local casino operator Crown Resorts Ltd. The move comes after a number of Australian newspapers reported allegations of money laundering operations and other criminal activity at Crown Resorts, which said in a statement that it will fully cooperate in the investigation.

EDUCATION SERVICES

* Laureate Education Inc. posted GAAP diluted EPS of $3.48 in the second quarter of 2019, up from $1 in the year-ago period and above the S&P Global Market Intelligence consensus GAAP EPS estimate of 56 cents. Revenue declined 2% to $1 billion from $1.02 billion due to the weakening of foreign currencies.

SPECIALIZED CONSUMER SERVICES

* Liberty Tax Inc. will buy nutritional products retailer Vitamin Shoppe Inc. in a deal valued at approximately $208 million, or $6.50 per share, representing a premium of 43% to the company's closing share price Aug. 7. The tax preparation services firm said the move is in line with its strategy to acquire franchise-centric businesses.

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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 was down 0.69% to 25,939.30, and the Nikkei 225 gained 0.44% to 20,684.82.

In Europe, around midday, the FTSE 100 was down 0.20% to 7,272.47, and the Euronext 100 slipped 0.74% to 1,042.14.

On the macro front

The producer price index for final demand and the Baker-Hughes Rig Count 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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