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Richemont FY'18 earnings miss estimates; J.C. Penney cuts FY'18 guidance

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Richemont FY'18 earnings miss estimates; J.C. Penney cuts FY'18 guidance

TOP NEWS

* Cartier owner Compagnie Financière Richemont SA reported full-year earnings for fiscal 2018 that missed expectations due to weaker sales in the wholesale channel and a higher tax bill, sending shares falling 5.7% in late-morning trading. The Swiss luxury goods company said net income for the 12 months ended March 31 edged up 1% year over year to €1.22 billion from €1.21 billion, short of the S&P Capital IQ consensus estimate of €1.72 billion. Diluted EPS increased 1% to €2.16 from €2.14 a year prior but fell below the S&P Capital IQ consensus estimate of €3.05.

* J.C. Penney Co. Inc. lowered its adjusted EPS guidance for fiscal 2018 despite outpacing analysts' expectations. The Texas-based department store chain now expects a loss of 7 cents per share to a gain of 13 cents per share compared to its previous EPS outlook range of a gain of 5 cents to 25 cents. For the first quarter ended May 5, the retailer posted an adjusted loss per share of 22 cents, below EPS of 1 cent in the year-ago period, but ahead of the S&P Capital IQ consensus normalized loss per share estimate of 24 cents.

MULTILINE RETAIL

* Nordstrom Inc. lifted its earnings guidance for fiscal 2018 on stronger year-over-year earnings. The department store operator posted diluted earnings per share for the quarter ended May 5 of 51 cents, up from 37 cents in the same period a year earlier and ahead of the S&P Capital IQ consensus normalized EPS estimate of 46 cents. The owner of Nordstrom Rack and Trunk Club raised its diluted EPS guidance for full year 2018 to a range of $3.35 to $3.55 from the $3.30 to $3.55 Nordstrom gave when the company reported fiscal 2017 earnings.

* Macy's Inc. intends to hire nearly 1,000 full-time and part-time beauty advisers across its U.S. city-area stores during its recruitment events May 22 in a move to improve customer experience, Women's Wear Daily reported. The American department store chain, which is also expected to open 25 Bluemercury luxury beauty and spa retail outlets in 2018, will hold hiring events in major U.S. cities, including Chicago, New York, Miami, Seattle and Los Angeles.

* Chilean department store chain S.A.C.I. Falabella was granted franchise rights by IKEA Systems BV, the global franchiser of the IKEA store concept, to run IKEA stores in Chile, Colombia and Peru. Under the deal, Falabella will open at least nine IKEA stores in the countries in 10 years, with the first store set to open in Santiago, Chile, by the end of 2020, along with online sales channels.

E-COMMERCE

* Australian food distributor Metcash Ltd. launched its Fresh Pantry e-commerce store on JD.com Inc.'s cross-border shopping platform JD Worldwide, marking the concept store's debut in the Chinese market. Metcash joins other Australian retailers, such as Pola Orbis Holdings Inc.-owned cosmetics manufacturer Jurlique International Pty. Ltd and health supplement producer Nature's Way, on JD Worldwide in a move to reach Chinese consumers.

* Blue Apron Inc. appointed Tim Bensley as CFO and treasurer, effective on his first day atn the company, which is expected to be May 21. Bensley, former CFO of marketing firm Acosta Inc., will replace Bradley J. Dickerson, who remained in the position after succeeding Matt Salzberg as president and CEO.

HOUSEHOLD AND PERSONAL PRODUCTS

* L'Oréal SA will start an international rollout of its skin care brand CeraVe, which the personal products company acquired in 2017, to expand beyond the U.S. market. A series of launches are planned for the brand within 2018, including in L'Oréal's home country of France. The company said it would make CeraVe's products, which include cleansers, moisturizers and healing ointments, available in new markets through channels such as drugstores, specialized distributors, retail chains and e-commerce.

FOOD AND STAPLES RETAILING

* Instacart's relationship with Kroger Co., one of its major U.S. clients, may be in hot water after the food retail giant announced its partnership with U.K. online grocery service Ocado Group PLC. When asked about the San Francisco-based company's pricing practices at a BMO Capital Markets-organized conference in New York, Kroger CFO J. Michael Schlotman pointed to Instacart's practice of charging more for some Kroger products than Kroger does in its stores. However, Kroger views its alliance with Instacart as compatible to its deal with Ocado, adding that the companies' relationship will not be affected by the transaction, Reuters reported, citing a Kroger spokesman.

* U.K.'s Competition and Markets Authority is inviting feedback about the potential impact of a merger between supermarket chain J Sainsbury PLC and Walmart Inc.'s British unit Asda Stores Ltd. Interested parties are encouraged to send their comments on the proposed transaction until June 4 to allow the watchdog to gather information and analyze the deal's effect on competition in the country. The antitrust regulator, which said its director of mergers, Colin Raftery, will be responsible for the review, anticipates that the investigation "will happen in the coming months."

HYPERMARKETS AND SUPERCENTERS

* BJ's Wholesale Club filed for an IPO to list itself on the New York Stock Exchange after being taken private in 2011 by Leonard Green & Partners LP and CVC Capital Partners Ltd. The Massachusetts-based warehouse club operator, which will list on the exchange under the symbol BJ, plans to raise up to $100 million. According to Bloomberg News, the private equity firms paid $2.8 billion in cash for the company.

* Walmart Inc. agreed to sell its banking operations in Canada and Chile to an undisclosed buyer as the company plans to focus on core retail capabilities. According to The Globe and Mail's interview with financier Stephen Smith, the retail giant is selling Walmart Canada Bank to him and private equity firm Centerbridge Partners LP, adding that he expects the deal to close within six months. Financial terms of the transaction were not disclosed.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Newell Brands Inc. appointed CEO Michael Polk as its president, effective May 25, in addition to his roles as CEO and director of the company after President Mark Tarchetti informed the company of his departure. In the same filing, the company said it appointed Procter & Gamble Co. veteran Robert Steele to its board of directors, along with Gerardo Lopez, appointed by the company as part of its agreement with activist investor Starboard Value LP.

* Gunmaker Remington Outdoor Co. Inc. emerged from Chapter 11 bankruptcy after it implemented its approved reorganization plan that converted more than $775 million of its debt into equity. The plan also provided the retailer with an asset-based loan of $193 million, which will be used to refinance a total of $155 million in term loans.

* U.K. floor coverings retailer Carpetright PLC will offer 232,463,221 in new ordinary shares at 28 pence per share, subject to approval at the company's annual general meeting, to raise about £60 million in equity. The troubled chain will use £33 million of the proceeds for capital, £12.5 million to repay its loan from Meditor, Carpetright's largest shareholder, while £6 million will cover expenses incurred from insolvency procedures.

The day ahead

Early morning futures indicators pointed to a higher opening for the U.S. market.

In Asia, the Hang Seng increased 0.34% to 31,047.91, and the Nikkei 225 increased 0.40% to 22,930.36.

In Europe, around midday, the FTSE 100 was down 0.17% to 7,775.10, while the Euronext 100 was up 0.10% to 1,084.48.

On the macro front

The Baker-Hughes Rig Count report is due out today.

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