TOP NEWS
* Best Buy Co. Inc. lifted its full year 2020 adjusted diluted EPS guidance to $5.60 to $5.75, compared with its prior forecast of $5.45 to $5.65, and narrowed its revenue guidance to between $43.1 billion and $43.6 billion. For the second quarter ended Aug. 3, the computer and electronics retailer posted adjusted diluted EPS of $1.08, up from 91 cents a year ago and higher than the S&P Global Market Intelligence estimate of 99 cents. Revenue grew to $9.54 billion from $9.38 billion in fiscal 2019.
* Dollar General Corp. stock surged more than 8% in premarket trading on Aug. 29 after the retailer raised its net sales growth guidance for fiscal 2019 to about 8%, from the previous expectation of about 7%, downplayed the risks of tariffs and reported positive second quarter earnings. The company reported that adjusted diluted EPS for the quarter ended Aug. 2 rose 14.5% to $1.74, a jump from $1.52 in the year-earlier period and better than the mean consensus estimate for normalized EPS of $1.58, according to S&P Global Market Intelligence.
TEXTILES, APPAREL AND LUXURY GOODS
* Forever 21 Inc. is preparing to file for Chapter 11 bankruptcy protection in a bid to recapitalize its business and close loss-making stores, Bloomberg News reported, citing people familiar with the matter. Sources reportedly said the fashion retailer's discussions with possible lenders for additional financing have stalled, and its goal has shifted to securing a potential debtor-in-possession loan. Representatives for Forever 21 did not respond to a comment request, the report added.
* H & M Hennes & Mauritz AB launched its online store in Indonesia, expanding its digital footprint to 49 markets.
* Adidas AG partnered with retail platform startup Storr Inc., which allows people to open their own online stores with the brands taking care of shipping and inventory, Women's Wear Daily reported. Under the collaboration, 10,000 of the top customers on Adidas' Creators Club reportedly will be invited to launch their own digital shops and sell products by the apparel company.
* Chico's FAS Inc. said it expects a further decline in sales for fiscal 2019 as it reported second quarter adjusted net loss of $151,000 and a decline in net sales to $508.4 million from $544.7 million in the year-ago period. The company said it anticipates a mid-single-digit decline in total net sales and consolidated comparable sales for the full year, from its previous guidance of a low to mid-single-digit reduction.
* PVH Corp. lowered its adjusted EPS outlook again for fiscal 2019 to a range of $9.30 to $9.40, compared with its previous guidance of $10.20 to $10.30, after reporting that second quarter non-GAAP EPS declined to $2.10 from $2.18 a year ago. The company beat the S&P Global Market Intelligence consensus normalized EPS estimate of $1.88. Revenue increased 1% in reported terms, or 3% at constant currency, to $2.36 billion.
MULTILINE RETAIL
* Hudson's Bay Co. agreed to sell its Lord & Taylor department store business to subscription-based clothing rental platform Le Tote Inc. for C$99.5 million in cash after the transaction closes and a C$33.2 million secured promissory note payable in cash after two years.
* S&P Global Ratings downgraded its issuer credit rating on J. C. Penney Co. Inc. to CCC from CCC+, with a negative outlook. The agency sees an "elevated risk" that the department store chain will restructure its debt over the next 12 months due to its unsustainable capital structure.
* Burlington Stores Inc. raised its adjusted EPS outlook for fiscal 2019 to a range of $7.14 to $7.22, from its prior guidance of $6.93 to $7.01, and its total sales growth forecast to between 8.8% and 9.3%, versus its previous range of 8.5% to 9.2%. The apparel retailer's second quarter adjusted EPS rose 19% to $1.36 from $1.15 in the year-ago period, above the S&P Global Market Intelligence consensus GAAP EPS estimate of $1.10.
HOUSEHOLD AND PERSONAL PRODUCTS
* PZ Cussons PLC agreed to sell its Greek subsidiary, Minerva SA Edible Oils and Food Enterprises, to Diorama Investments Sicar SA-controlled Mirties Enterprises Co. Ltd. for £41 million in cash. The company will also sell its Luksja personal care brand to Athens, Greece-based Sarantis Group for an undisclosed amount.
FOOD AND STAPLES RETAILING
* Australian retail conglomerate Woolworths Group Ltd. saw net profit climb 9.2% for the fiscal year ended June 30, exceeding market expectations. For the 53-week period, net income, excluding one-off items, came in at A$1.75 billion compared to last year's A$1.61 billion. The figure beat the S&P Global Market Intelligence consensus net income estimate of A$1.70 billion.
HOUSEHOLD DURABLES AND SPECIALTY RETAIL
* Sony Corp. will launch a tender offer for its entire 5.03% stake in Olympus Corp. since the initial purpose of their capital alliance, which is to establish a collaboration, has been accomplished through their joint venture Sony Olympus Medical Solutions Inc. Sony will sell its 68,975,800 shares in the company for ¥1,165 per share, or a total price of ¥80.36 billion.
* Five Below Inc.'s second quarter diluted EPS grew 13% to 51 cents from 45 cents in the year-ago period, beating the S&P Global Market Intelligence consensus normalized EPS estimate of 50 cents. Net sales jumped 20% year over year to $417.4 million. The company expects diluted EPS for the full year to be in the range of $3.08 to $3.19.
* Steinhoff International Holdings NV said revenue from continuing operations for the nine-month period ended June 30 rose 4% to €10.11 billion from €9.73 billion, driven by a sales increase of 13% in its Pepkor Europe business unit and 3% in Pepkor Africa. The company reported that it is considering all options as part of its debt-reduction strategy and "will keep the future ownership of [its] businesses under review."
LEISURE PRODUCTS AND FACILITIES
* Goals Soccer Centres PLC commenced a process, conducted by Deloitte LLP, to invite offers for the company. "There is no certainty as to the timetable or outcome of this process," Goals Soccer Centres disclosed.
CASINOS AND GAMING
* Caesars Entertainment Corp. will no longer pursue opening a casino in Japan and instead focus on its merger with Eldorado Resorts Inc., Bloomberg News reported, citing a statement from CEO Tony Rodio. Rodio reportedly said the company made the decision out of sensitivity to the Japanese government and its business partners.
* The Independent Liquor and Gaming Authority is conducting an inquiry into Crown Resorts Ltd. and whether it should retain its license to operate its business unit, Crown Sydney Gaming Pty. Ltd. The investigation comes after media reports alleging that Crown Resorts is involved in money laundering, breach of gambling laws and partnering with junket operators that have ties in drug trafficking, human trafficking and organized crime groups. Melco Resorts & Entertainment Ltd. has postponed its 19.99% stake purchase in Crown as a result of the investigation.
SPECIALIZED CONSUMER SERVICES
* Australia's Wellness and Beauty Solutions Ltd. will acquire Sydney-based skincare and beauty distributor True Solutions International Pty. Ltd. to expand its network of cosmetic clinics, spas and beauty salons. Wellness and Beauty Solutions did not disclose the purchase price but said it will fund the transaction through the issuance of 10 million convertible notes at 5 Australian cents each for a total issue price of A$500,000.
INDUSTRY NEWS
* More than 200 footwear companies in the U.S. urged President Donald Trump to cancel its 10% tariffs on Chinese imports, which is expected to take effect Sept. 1 and Dec. 15. In a letter spearheaded by the Footwear Distributors and Retailers of America, companies said the cost increases will directly affect consumer prices and may create further economic uncertainty.
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The day ahead
Early morning futures indicators pointed to a higher opening for the U.S. market.
In Asia, the Hang Seng rose 0.34% to 25,703.50, and the Nikkei 225 fell 0.09% to 20,460.93.
In Europe, around midday, the FTSE 100 was up 1.07% to 7,190.97, and the Euronext 100 rose 1.47% to 1,057.66.
On the macro front
The GDP report, the international trade in goods report, the jobless claims report, the corporate profits report, the retail inventories [Advance], the wholesale inventories [Advance], the Pending home sales index, the EIA natural gas report, the Fed balance sheet and the money supply 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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