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Walmart, CVS reach agreement on new contract; V.F. raises FY'19 EPS outlook

TOP NEWS

* Walmart Inc. and CVS Health Corp. said they have entered into a multiyear agreement, wherein the big-box retailer will continue to be a part of CVS' Caremark pharmacy benefit management commercial and Managed Medicaid retail pharmacy networks. The announcement comes just days after Walmart exited the drugstore networks due to a dispute over pricing. The financial terms of the new contract were not disclosed. Sean Slovenski, senior vice president of Walmart health and wellness, said both parties "have reached fair and equitable terms."

* V.F. Corp. raised its fiscal 2019 outlook for the second time after posting third-quarter earnings that beat Street estimates. The Vans-owner reported adjusted diluted EPS of $1.31 for the three months ended Dec. 29, 2018, up 30% year over year, beating the S&P Global Market Intelligence mean consensus normalized EPS estimate of $1.10. Revenue from continuing operations rose 8% year over year to $3.94 billion. The company now expects full-year EPS to be $3.73, up from the $3.65 it predicted when it announced second-quarter results.

TEXTILES, APPAREL AND LUXURY GOODS

* Fashion retailer New Look Retail Group Ltd.'s Belgian unit filed for insolvency at the Brussels Enterprise Court after its board ruled that the business, which operates six stores in the country, "has not achieved the necessary sales and profitability to continue its ongoing operations on a standalone basis." The announcement comes just days after U.K.-based New Look secured a restructuring deal to cut its long-term debt by 80% from £1.35 billion to £350 million.

* Signet Jewelers Ltd. cut its earnings outlook for fiscal 2019 following a drop in its same-store sales during the holiday season. The jeweler now expects a GAAP loss per share of $7.93 to $8.16 for fiscal 2019, wider than its prior forecast of a loss of $7.07 to $7.40 per share. It comes as the company's same-store sales during the nine-week period to Jan. 5 fell 1.3% to $1.84 billion following slow sales in its international segment.

MULTILINE RETAIL

* Unsecured creditors of Sears Holdings Corp. have formally objected to Chairman Eddie Lampert's takeover bid for the department store chain made through his hedge fund ESL Investments Inc., CNBC reported, citing court documents. In the objection filed to the U.S. Bankruptcy Court for the Southern District of New York, the group of creditors reportedly alleged that Lampert and ESL, among others, contributed to Sears' downfall through "years of misconduct." ESL said in a statement to CNBC that it has fully cooperated with the creditors' review. The filing comes the same day the hedge fund agreed to a $5.2 billion acquisition deal for the troubled retailer.

* Walmart will expand its online grocery delivery option in the U.S. with the addition of four grocery delivery service providers: Point Pickup, Skipcart, AxleHire and Roadie. The service providers will begin delivering groceries in metro areas across four states "in the coming weeks." Walmart added that its online grocery delivery service is available in more than 800 stores, and it plans to add another 800 this year.

* Walmart is canceling its plans to launch a new video-streaming service and will instead focus on its video-on-demand service, VUDU Inc., CNBC reported, citing anonymous sources. The Wall Street Journal reported in July 2018 that the retail giant hired television executive Mark Greenberg to work on the project. According to CNBC, Walmart decided to not pursue the project because talks with Greenberg failed in 2018. Walmart spokeswoman Tara Raddohl-House reportedly said the company aims to bring more content at the best possible price and that Vudu "has developed a strong platform."

* Target Corp. is expanding its infant brand Cloud Island with the addition of diapers, wipes, toiletries and other baby essentials. The brand, which was launched in May 2017, will now offer 30 new products, with prices ranging from 99 cents to $21.99.

E-COMMERCE

* China's Alibaba Group Holding Ltd. is cutting its travel expenses, including restricting business class airfares on a unit-by-unit basis, and slowing down the hiring of new personnel in anticipation of a slowdown in the country's economy, Bloomberg News reported, citing people familiar with the matter. The company reportedly told some new hires that they cannot start work until the beginning of the new fiscal year in April. "Long-term strategic planning and continuous upgrades of our talent pool are central to Alibaba's future," the e-commerce company told the news outlet in an email.

* Amazon.com Inc.'s Prime subscription membership in the U.S. grew 10% year over year to 101 million members in 2018, according to a market research firm Consumer Intelligence Research Partners survey of 500 Amazon customers. The slower year-over-year growth is "still significant on a huge base" and comes after years of rapid growth, the research firm added. The survey also found that Prime members spend about $1,400 annually, while non-member customers spend $600 per year.

* Amazon's U.K. arm launched its own cosmetics range under its fashion brand Find. The line includes eyeshadow palettes, mascaras, eyeliners, highlighters and lipsticks, as well as nail polishes and nail care products.

* G-III Apparel Group Ltd.-owned fashion brand DKNY tied up with JD.com Inc. to open an official DKNY flagship store on the Chinese e-commerce company's portal. JD.com said the partnership also would enable the companies to develop other online and offline retail ventures.

* Japanese e-commerce company Rakuten Inc. partially modified its August 2018 reorganization plan to consider future management strategy, optimal allocation of management resources, among others. The company said it will not set up an internet services unit, but it will merge its Rakuten Direct Inc. subsidiary into the parent company instead. Rakuten's mobile communications business will be succeeded to a wholly owned entity, Rakuten Mobile Network Inc. The company's financial technology businesses, expect for Rakuten Card Co. Ltd. and Rakuten Edy Inc., will be transferred to Rakuten Card Co. Ltd.

HOUSEHOLD AND PERSONAL PRODUCTS

* Hindustan Unilever Ltd. reported year-over-year growth in net profit and sales for the third quarter of 2018 but missed analysts' earnings expectations. For the three months to Dec. 31, 2018, the Indian consumer goods giant posted diluted EPS of 6.67 Indian rupees, up 8.8% from 6.13 rupees in the year-ago period but below the S&P Global Market Intelligence consensus GAAP EPS estimate of 7.14 rupees. Net profit for the quarter rose to 14.44 billion rupees from 13.25 billion in the third quarter of 2017. Meanwhile, sales of products came in at 93.57 billion rupees, a 12.4% increase from the 83.23 billion rupees recorded in the prior-year period.

HYPERMARKETS AND SUPERCENTERS

* Casino Guichard-Perrachon SA reported total group sales for full-year 2018 rose 4.7% on an organic basis, and 3% on a same-store basis, to €36.60 billion. For the fourth quarter of 2018, total retail sales in France increased 0.2% on an organic basis to €4.92 billion, with same-store growth of 0.5%, as positive sales in Casino's Monoprix banner, supermarket unit and convenience store business offset the negative results in its Franprix banner, hypermarkets segment and Leader Price banner.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Fossil Group Inc. agreed to sell its smartwatch technology that is under development to Google LLC for $40 million. Under the deal, members of the watchmaker's research and development team that are involved in transferring the intellectual property will join Google. Fossil said it will retain more than 200 of its R&D team members following the transaction, which is expected to close in January.

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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 increased 1.25% to 27,090.81, and the Nikkei 225 rose 1.29% to 20,666.07.

In Europe, around midday, the FTSE 100 was up 1.40% to 6,930.93, and the Euronext 100 was up 1.52% to 949.88.

On the macro front

The industrial production report, the consumer sentiment report and the Baker-Hughes Rig Count 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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