ReportWire

Tag: Retail/Wholesale

  • Casino Receives Offers to Strengthen Capital Base

    Casino Receives Offers to Strengthen Capital Base

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    By Mauro Orru

    Casino Guichard-Perrachon said it has received two proposals to strengthen its capital base, a day after the group warned it could default on part of its debt.

    The French grocer said Tuesday that one proposal came from EP Global Commerce and Fimalac, and the second from 3F Holding. Casino said it would analyze the two proposals and put them to creditors on Wednesday, when it expects to disclose details of the offers.

    Casino has for months been grappling with high debt and has entered talks with creditors to ensure it has enough funding available. Last week, the group said it was seeking to raise at least 900 million euros ($982.2 million) to deliver its midterm targets.

    “Casino’s governance bodies will not take any decision relating to such proposals until they have been presented and discussed with the creditors under the aegis of the conciliators,” the group said in a statement.

    On Monday, the company said it had fully drawn its revolving credit line at the end of June, with the ratio of gross secured debt to earnings before interest, taxes, depreciation, and amortization after lease payments expected to exceed a cap that is closely watched by investors.

    The company warned it could be in default under its revolving credit line by the end of August, “which would result in a cross-default in respect of a part of its financial debt at the level of its operating subsidiaries.”

    Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

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  • Sainsbury’s Backs FY24 View

    Sainsbury’s Backs FY24 View

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    J. Sainsbury sees same-store sales rise 9.8% in first quarter, backs 2024 view

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  • Casino Shares Plunge After Warning of Potential Debt Default

    Casino Shares Plunge After Warning of Potential Debt Default

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    By Mauro Orru

    Shares of Casino Guichard-Perrachon slumped in early Monday trading after the French grocer said it could default on part of its debt.

    At 0750 GMT, Casino shares traded 15% lower at EUR3.45.

    The group said that with its revolving credit line be fully drawn at the end of June, the ratio of gross secured debt to earnings before interest, taxes, depreciation, and amortization after lease payments is expected to exceed a cap that is closely watched by investors.

    The company said it could be in default under its revolving credit line by the end of August, “which would result in a cross-default in respect of a part of its financial debt at the level of its operating subsidiaries.”

    Casino has for months been grappling with high debt and entered talks with creditors to ensure it has enough funding available. Last week, the group said it was seeking to raise at least 900 million euros ($982.2 million) to deliver its midterm targets.

    Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94

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  • Alpha Omega Wealth Management LLC Sells 226 Shares of Starbucks Co. (NASDAQ:SBUX)

    Alpha Omega Wealth Management LLC Sells 226 Shares of Starbucks Co. (NASDAQ:SBUX)

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    Alpha Omega Wealth Management LLC lowered its holdings in Starbucks Co. (NASDAQ:SBUXFree Report) by 6.9% in the first quarter, according to its most recent 13F filing with the Securities & Exchange Commission. The firm owned 3,052 shares of the coffee company’s stock after selling 226 shares during the period. Alpha Omega Wealth Management LLC’s holdings in Starbucks were worth $318,000 at the end of the most recent quarter.

    Other institutional investors have also recently bought and sold shares of the company. Spartan Planning & Wealth Management increased its stake in shares of Starbucks by 19.2% in the fourth quarter. Spartan Planning & Wealth Management now owns 590 shares of the coffee company’s stock worth $59,000 after buying an additional 95 shares during the period. First American Trust FSB increased its stake in shares of Starbucks by 3.8% in the fourth quarter. First American Trust FSB now owns 2,649 shares of the coffee company’s stock worth $263,000 after buying an additional 97 shares during the period. Perennial Investment Advisors LLC increased its position in Starbucks by 2.0% during the 4th quarter. Perennial Investment Advisors LLC now owns 4,996 shares of the coffee company’s stock valued at $496,000 after purchasing an additional 98 shares during the period. FSM Wealth Advisors LLC increased its position in Starbucks by 2.8% during the 4th quarter. FSM Wealth Advisors LLC now owns 3,626 shares of the coffee company’s stock valued at $360,000 after purchasing an additional 99 shares during the period. Finally, Rosenberg Matthew Hamilton increased its position in Starbucks by 3.0% during the 4th quarter. Rosenberg Matthew Hamilton now owns 3,394 shares of the coffee company’s stock valued at $337,000 after purchasing an additional 100 shares during the period. Institutional investors own 69.68% of the company’s stock.

    Insider Activity

    In other news, CFO Rachel Ruggeri sold 679 shares of the company’s stock in a transaction dated Wednesday, June 21st. The shares were sold at an average price of $100.60, for a total transaction of $68,307.40. Following the completion of the sale, the chief financial officer now owns 54,761 shares of the company’s stock, valued at approximately $5,508,956.60. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Insiders own 1.98% of the company’s stock.

    Wall Street Analysts Forecast Growth

    A number of research analysts have issued reports on the stock. Credit Suisse Group boosted their price objective on shares of Starbucks from $122.00 to $128.00 in a research report on Wednesday, May 3rd. Royal Bank of Canada reduced their price objective on shares of Starbucks from $115.00 to $110.00 in a research report on Wednesday, May 3rd. Barclays boosted their price objective on shares of Starbucks from $123.00 to $127.00 in a research report on Wednesday, May 3rd. Robert W. Baird boosted their price objective on shares of Starbucks from $105.00 to $110.00 in a research report on Wednesday, May 3rd. Finally, BTIG Research boosted their target price on shares of Starbucks from $120.00 to $125.00 in a report on Wednesday, May 3rd. Twelve equities research analysts have rated the stock with a hold rating and thirteen have given a buy rating to the company’s stock. According to MarketBeat, Starbucks currently has a consensus rating of “Moderate Buy” and an average price target of $110.31.

    Starbucks Stock Performance

    Shares of NASDAQ:SBUX opened at $99.06 on Friday. Starbucks Co. has a fifty-two week low of $75.73 and a fifty-two week high of $115.48. The business has a 50-day simple moving average of $102.96 and a two-hundred day simple moving average of $103.44. The firm has a market cap of $113.56 billion, a price-to-earnings ratio of 32.16, a price-to-earnings-growth ratio of 1.71 and a beta of 0.96.

    Starbucks (NASDAQ:SBUXFree Report) last issued its earnings results on Tuesday, May 2nd. The coffee company reported $0.74 earnings per share for the quarter, topping analysts’ consensus estimates of $0.64 by $0.10. Starbucks had a negative return on equity of 41.99% and a net margin of 10.46%. The business had revenue of $8.72 billion during the quarter, compared to analyst estimates of $8.43 billion. During the same quarter in the previous year, the firm earned $0.59 EPS. Starbucks’s revenue was up 14.2% on a year-over-year basis. As a group, research analysts predict that Starbucks Co. will post 3.43 earnings per share for the current year.

    Starbucks Announces Dividend

    The firm also recently declared a quarterly dividend, which will be paid on Friday, August 25th. Stockholders of record on Friday, August 11th will be given a dividend of $0.53 per share. This represents a $2.12 annualized dividend and a dividend yield of 2.14%. The ex-dividend date of this dividend is Thursday, August 10th. Starbucks’s payout ratio is currently 68.83%.

    About Starbucks

    (Free Report)

    Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates through three segments: North America, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole beans and ground coffees, single serve products, and ready-to-drink beverages; and various food products, such as pastries, breakfast sandwiches, and lunch items.

    Read More

    Want to see what other hedge funds are holding SBUX? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Starbucks Co. (NASDAQ:SBUXFree Report).

    Institutional Ownership by Quarter for Starbucks (NASDAQ:SBUX)

    Receive News & Ratings for Starbucks Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for Starbucks and related companies with MarketBeat.com’s FREE daily email newsletter.

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  • Like choosy shoppers at a retail store, IPO investors are demanding discounts and displaying price sensitivity

    Like choosy shoppers at a retail store, IPO investors are demanding discounts and displaying price sensitivity

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    IPO investors, much like retail shoppers in recent years’ inflationary environment, are demanding clear discounts and demonstrating sensitivity to price and valuations, according to Renaissance Capital.

    The provider of IPO exchange-traded funds and institutional research said that’s a positive — even if tech unicorns in the pipeline would prefer it were not the case.

    “Quality consumer names are working,” said Matthew Kennedy, senior strategist at Renaissance, listing Kenvue, Cava Group Inc., Gen Restaurant Group Inc. and Savers Value Village Inc. as examples of recent new issues that enjoyed strong debuts.

    Kenvue
    KVUE,
    +1.65%
    ,
    the former consumer arm of Johnson & Johnson
    JNJ,
    +0.87%

    and parent of household-name products such as Tylenol and Band-Aid, raised $3.8 billion in its May IPO at a valuation of $41.08 billion, making it the biggest deal of the year to date.

    Cava Group
    CAVA,
    -5.93%
    ,
    the loss-making Mediterranean-style fast-casual restaurant group, raised $317 million in its mid-June deal at a valuation of $2.5 billion. The stock popped more than 99% on its first day of trade.

    For more: Cava Group CFO is confident restaurant chain will be profitable — but she won’t say when

    Gen Restaurant Group
    GENK,
    +13.95%

    is a profitable Korean barbecue chain that made its debut Wednesday with a more than 50% pop in early trade.

    “But broadly investors are still demanding clear discounts to public peers, especially if they take issue with certain aspects of a deal. So it’s good to see that valuation sensitivity,” said Kennedy.

    Savers Value Village
    SVV,
    +3.45%

    went public Thursday with some fanfare, closing 27% above its $18 issue price. The company is the biggest for-profit thrift-store chain in North America, with 317 stores that operate under multiple names.

    The company is profitable, with net income of $11.9 million in the quarter through April 2, after a loss of $10.2 million in the same period a year earlier. For all of 2022, it had net income of $84.7 million, up from $83.4 million in 2021.

    Revenue for the quarter came to $327.5 million, down from $345.7 million in the year-ago period. Revenue totaled $1.4 billion for 2022, up from $1.2 billion in 2021.

    See: Money-losing food chain Cava showed IPO success. Is it finally time for some tech deals?

    Two other deals that made their debut on Thursday fared less well, however.

    Texas-based Kodiak Gas Services Inc. 
    KGS,
    +3.44%

     and Fidelis Insurance Holdings Ltd. closed lower after pricing below their estimated ranges and making other accommodations to get their deals through.

    Bermuda-based Fidelis, a reinsurer, downsized its deal to 15 million shares from a previous expectation that it would offer 17 million. The initial public offering was priced at $14 a share, below the proposed $16-to-$19 range.

    Maker of oil- and gas-production equipment Kodiak opened almost 3% below its issue price of $16, which was well below its proposed price range of $19 to $22.

    Fidelis has an unusual structure, in that it uses a third party for origination, underwriting and claims management, said Kennedy.

    “We think insurance investors wanted a discount for a company that didn’t own the underwriting group,” he said. “It has an experienced management team, though, so now they’ll just need to execute.”

    Kodiak, meanwhile, carries substantial debt and will need to undertake significant capital spendig in the coming years, just as gas prices have fallen back.

    It’s also worth noting that the last big oil and gas IPO, Atlas, “is slightly below its offer price,” Kennedy said.

    Atlas Energy Solutions Inc.
    AESI,
    -2.75%

    went public in March at an issue price of $18 a share. The stock was last quoted at $17.52.

    Still, Renaissance is expecting a gradual reopening of the IPO market in the second half, said Kennedy, who noted that the IPO ETF
    IPO,
    +1.38%

    has gained about 30% in to date in 2023, outperforming the S&P 500’s
    SPX,
    +1.23%

    14% gain.

    To date, there have been 52 IPOs this year, up 33% from the same time last year, when the market was effectively frozen. Almost $9 billion in proceeds have been raised, up 115% from last year but well below levels seen in frothier times.

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  • Nordea Investment Management AB Sells 121,500 Shares of Walmart Inc. (NYSE:WMT)

    Nordea Investment Management AB Sells 121,500 Shares of Walmart Inc. (NYSE:WMT)

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    Nordea Investment Management AB reduced its stake in Walmart Inc. (NYSE:WMTFree Report) by 10.3% in the 1st quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 1,063,117 shares of the retailer’s stock after selling 121,500 shares during the period. Nordea Investment Management AB’s holdings in Walmart were worth $157,341,000 as of its most recent SEC filing.

    Several other institutional investors have also recently made changes to their positions in the stock. Avalon Investment & Advisory raised its position in shares of Walmart by 3.4% during the 4th quarter. Avalon Investment & Advisory now owns 2,070 shares of the retailer’s stock worth $294,000 after purchasing an additional 69 shares during the last quarter. Transparent Wealth Partners LLC raised its holdings in shares of Walmart by 2.4% during the fourth quarter. Transparent Wealth Partners LLC now owns 3,076 shares of the retailer’s stock valued at $436,000 after acquiring an additional 71 shares during the last quarter. Pin Oak Investment Advisors Inc. lifted its position in shares of Walmart by 1.1% in the fourth quarter. Pin Oak Investment Advisors Inc. now owns 6,701 shares of the retailer’s stock valued at $950,000 after acquiring an additional 71 shares in the last quarter. Elgethun Capital Management boosted its stake in shares of Walmart by 1.2% in the third quarter. Elgethun Capital Management now owns 6,045 shares of the retailer’s stock worth $784,000 after acquiring an additional 72 shares during the last quarter. Finally, Keystone Wealth Services LLC increased its position in shares of Walmart by 2.0% during the first quarter. Keystone Wealth Services LLC now owns 3,726 shares of the retailer’s stock worth $549,000 after purchasing an additional 72 shares in the last quarter. Institutional investors and hedge funds own 31.95% of the company’s stock.

    Analyst Ratings Changes

    A number of research analysts have weighed in on WMT shares. Wells Fargo & Company raised their price objective on Walmart from $155.00 to $170.00 and gave the company an “overweight” rating in a report on Thursday, April 6th. BNP Paribas initiated coverage on shares of Walmart in a research note on Monday, June 12th. They issued an “outperform” rating and a $186.00 price target on the stock. Citigroup upped their price objective on shares of Walmart from $169.00 to $174.00 in a research note on Friday, May 19th. Oppenheimer raised their target price on shares of Walmart from $160.00 to $165.00 and gave the stock an “outperform” rating in a research note on Thursday, April 6th. Finally, Barclays upped their price target on Walmart from $159.00 to $162.00 in a research report on Sunday, May 21st. Five research analysts have rated the stock with a hold rating, twenty-five have issued a buy rating and one has issued a strong buy rating to the company’s stock. Based on data from MarketBeat, the stock currently has an average rating of “Moderate Buy” and a consensus price target of $166.91.

    Insider Activity

    In related news, CEO C Douglas Mcmillon sold 9,708 shares of Walmart stock in a transaction that occurred on Thursday, June 22nd. The shares were sold at an average price of $155.04, for a total value of $1,505,128.32. Following the completion of the transaction, the chief executive officer now owns 1,490,621 shares in the company, valued at $231,105,879.84. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. In other Walmart news, major shareholder Alice L. Walton sold 455,060 shares of the stock in a transaction that occurred on Friday, May 19th. The shares were sold at an average price of $149.98, for a total value of $68,249,898.80. Following the transaction, the insider now directly owns 245,256,456 shares in the company, valued at $36,783,563,270.88. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, CEO C Douglas Mcmillon sold 9,708 shares of the business’s stock in a transaction that occurred on Thursday, June 22nd. The stock was sold at an average price of $155.04, for a total transaction of $1,505,128.32. Following the sale, the chief executive officer now owns 1,490,621 shares of the company’s stock, valued at approximately $231,105,879.84. The disclosure for this sale can be found here. In the last quarter, insiders sold 9,195,764 shares of company stock worth $1,419,154,047. 46.51% of the stock is currently owned by company insiders.

    Walmart Price Performance

    Walmart stock opened at $154.28 on Friday. The company’s 50 day moving average is $151.67 and its two-hundred day moving average is $146.55. The firm has a market cap of $415.45 billion, a PE ratio of 37.09, a price-to-earnings-growth ratio of 4.55 and a beta of 0.49. The company has a quick ratio of 0.23, a current ratio of 0.82 and a debt-to-equity ratio of 0.54. Walmart Inc. has a 52-week low of $119.89 and a 52-week high of $158.23.

    Walmart (NYSE:WMTFree Report) last announced its quarterly earnings data on Thursday, May 18th. The retailer reported $1.47 earnings per share (EPS) for the quarter, beating the consensus estimate of $1.32 by $0.15. Walmart had a return on equity of 21.30% and a net margin of 1.82%. The business had revenue of $152.30 billion for the quarter, compared to analysts’ expectations of $147.91 billion. During the same period last year, the firm earned $1.30 earnings per share. The company’s revenue for the quarter was up 7.6% compared to the same quarter last year. On average, research analysts expect that Walmart Inc. will post 6.21 EPS for the current fiscal year.

    Walmart Company Profile

    (Free Report)

    Walmart Inc engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments: Walmart U.S., Walmart International, and Sam’s Club. It operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores under Walmart and Walmart Neighborhood Market brands; membership-only warehouse clubs; ecommerce websites, such as walmart.com, walmart.com.mx, walmart.ca, flipkart.com, and samsclub.com; and mobile commerce applications.

    Featured Articles

    Want to see what other hedge funds are holding WMT? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Walmart Inc. (NYSE:WMTFree Report).

    Institutional Ownership by Quarter for Walmart (NYSE:WMT)

    Receive News & Ratings for Walmart Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for Walmart and related companies with MarketBeat.com’s FREE daily email newsletter.

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  • Nike profit misses expectations, as ‘higher markdowns’ endure amid weaker demand

    Nike profit misses expectations, as ‘higher markdowns’ endure amid weaker demand

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    Nike Inc. on Thursday reported fourth-quarter profit that came up short of Wall Street’s expectations, with price cuts weighing on results amid weaker demand for sneakers and clothing.

    Nike
    NKE,
    +0.30%

    reported fourth-quarter net income of $1.03 billion, or 66 cents a share, down from $1.44 billion, or 90 cents a share, in the same quarter last year. Revenue rose 5% to $12.83 billion, compared with $12.23 billion in the prior-year quarter.

    Analysts polled by FactSet expected Nike to report adjusted earnings of 68 cents a share, on $12.58 billion in sales.

    Nike said gross margins slipped 140 basis points to 43.6%, dragged by “higher product input costs and elevated freight and logistics costs, higher markdowns and continued unfavorable changes in net foreign currency exchange rates.”

    Shares were up 0.3% after hours on Thursday.

    Heading into the earnings, Wall Street had questions about Nike’s stockpiles of unsold shoes and clothing, and what it might take to clear them, as consumers still find themselves stretching their budgets to buy more essential goods like groceries.

    Nike’s broader plans to sell more shoes and clothes directly — either through its own e-commerce platform or its own physical stores. But recent plans to start selling again in Macy’s Inc.
    M,
    +3.35%

    and Designer Brands Inc.’s
    DBI,
    +4.01%

    DSW shoe stores have raised questions over whether the athletic-gear maker is rethinking that strategy. Analysts were also focused on demand in China, whose re-opening from COVID-19 shutdowns remains in flux.

    Shares of Nike have risen 9.6% over the past 12 months. By comparison, the S&P 500 Index
    SPX,
    +0.45%

    has risen 15% over that period.

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  • Does Nike have too many sneakers? Its financial results could tell us whether shoes will get cheaper.

    Does Nike have too many sneakers? Its financial results could tell us whether shoes will get cheaper.

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    Are stores getting more desperate to sell sneakers? Fourth-quarter results from Nike Inc. on Thursday will probably provide part of the answer.

    Even as its some of its basketball shoes still put up double-digit sales gains — like those named after NBA icons LeBron James, Luka Doncic and Giannis Antetokounmpo — the athletic-gear maker, like its rivals, has faced weaker consumer demand overall. With customers forced to spend more money on necessities over the past year, they’ve had less to spend on new shoes.

    In March, Nike
    NKE,
    +0.19%

    executives said that the demand backdrop remained “promotional” — one in which anyone selling sneakers and clothing was cutting prices more aggressively to attract customers. But ahead of Thursday’s results, some analysts also wondered whether the stalling demand has forced bigger changes to the way management thinks about its broader turn away from retailers — a core piece of its sales strategy.

    Nike over recent years has embarked on a plan to rely less on shoe retailers for sales and more on sales made directly to customers through its own stores and online. But recently, it decided to start selling clothing again at Macy’s
    M,
    +3.58%

    and shoes again at DSW, the shoe-store chain run by Designer Brands Inc.
    DBI,
    +4.32%

    — this after ending partnerships with both retailers over the past two years.

    The return to traditional retail has raised questions about whether Nike is looking to more aggressively clear product it’s had trouble selling, and whether management is re-evaluating the company’s go-it-alone sales strategy overall.

    “The big question on our minds heading into [Nike’s] quarter is what is going on with the [direct-to-consumer] pivot?” Quo Vadis analyst John Zolidis said in a note on Monday. “Reopening Macy’s and DSW seems odd in context of previous dismissive statements about undifferentiated retail.”

    He continued: “Further, neither of these retailers has a customer that correlates strongly with [Nike’s] highest-value segments. The easiest explanation is that [Nike] overestimated the dollars it could recapture from closed wholesale accounts and now has too much inventory it needs to clear.”

    What to expect

    Earnings: Analysts polled by FactSet expect Nike to earn 68 cents a share, down from 90 cents in the same quarter a year ago. Contributors to Estimize — a crowdsourcing platform that gathers estimates from Wall Street analysts as well as buy-side analysts, fund managers, company executives, academics and others — expect earnings per share of 75 cents.

    Revenue: Analysts polled by FactSet expect $12.58 billion in sales for Nike. Forecasts from Estimize call for sales of $12.72 billion.

    Stock price: Nike’s stock is only up 1.3% over the past 12 months. Shares got hit in September, after company executives warned of further price-cutting from rivals due to weaker demand. The stock rebounded later but gave up some gains in May. The stock was up 2% on Monday.

    What analysts are saying

    Nike in March said demand for product sold at full pricing remained solid. Still, sneaker chain Foot Locker Inc.
    FL,
    +2.09%

    recently cut its outlook. Lots of Vans shoes are running at a discount, one analyst said last month, as the skater-centric brand competes with casual fare from the likes of Adidas
    ADS,
    +0.61%

    and others.

    Other analysts were also wondering about Nike’s return to Macy’s and DSW. But not everyone believed the move was a sign of deeper problems.

    “Investors are worried that this is a reversal in Nike’s shift from wholesale to [direct-to-consumer], but we don’t think the strategy is broken,” BofA analyst Lorraine Hutchinson said in a research note on Wednesday. “We expect to hear an explanation of these moves on the [conference] call rather than an about-face on its focus on reducing undifferentiated wholesale.”

    Still, the company faced concerns about sales abroad. Zolidis also said markets were increasingly worried about growth in China, whose recovery from pandemic lockdowns has stumbled.

    “Our recent conversations with companies in China suggest that trends are mixed,” Zolidis said. “The consumer is more value oriented, and job uncertainty is higher.”

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  • Ozempic and other weight-loss drugs boost pharmacy sales at Rite Aid

    Ozempic and other weight-loss drugs boost pharmacy sales at Rite Aid

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    Rite Aid Corp. said Thursday that its fiscal first-quarter pharmacy sales got a boost from a new class of drug.

    Pharmacy sales, which rose 3.4% from a year ago, were boosted by higher sales of Ozempic and other GLP-1 receptor agonists, which are used to treat Type 2 diabetes and obesity.

    The higher sales did not translate into profit, however.

    “As the cost of these drugs is also high, the impact of the increase in volume of these drugs on our gross profit dollars is minimal,” Rite Aid Chief Financial Officer Matthew Schroeder told analysts on the company’s earnings call, according to a FactSet transcript.

    Still, the company
    RAD,
    +2.96%

    cheered investors by raising its full-year revenue guidance due to the sales bump from Ozempic and other high-dollar GLP-1 drugs. It now expects revenue of $22.6 billion to $23 billion, ahead of the FactSet consensus of $22.3 billion.

    Ozempic, Wegovy and Rybelsus, which are made by Novo Nordisk
    NOVO.B,
    +0.17%

    NOVO.B,
    +0.17%
    ,
    and Mounjaro, which is made by Eli Lilly & Co.
    LLY,
    +1.34%
    ,
    have become so popular in the U.S. that supplies have at times run short and the U.S. Food and Drug Administration has been forced to warn patients against using knockoff versions.

    The drugs are administered by injection and mimic the effects of GLP-1, a gut hormone that can help control blood-sugar levels and reduce appetite. GLP stands for glucagon-like peptide.

    Ozempic, Rybelsus and Mounjaro have been approved by the Food and Drug Administration for treatment of Type 2 diabetes, while Wegovy is approved for people with obesity and for certain people with excess weight combined with weight-related medical problems. 

    Last year, more than 5 million prescriptions for Ozempic, Mounjaro, Rybelsus or Wegovy were written for weight management, up from 230,000 in 2019, according to data and analytics firm Komodo Health.

    Obesity drugs could be a $54 billion market by 2030, up from $2.4 billion in 2022, Morgan Stanley said in a report last year. Reports of people who take GLP-1 drugs seeing improvements in addictive behaviors such as smoking and drinking have lately amplified interest in the medications.  

    For more, read: The dark side of the weight-loss-drug craze: eating disorders, medication shortages, dangerous knockoffs

    Drug companies, including Lilly and Pfizer Inc.
    PFE,
    -0.32%
    ,
    are now working to develop treatments in the form of pills that could be more convenient alternatives to the injectables.

    See now: Weight-loss drugs in development aim to replace injections with pills

    Rite Aid’s overall numbers surprised on the upside, as its loss was narrower than expected and revenue beat the consensus estimate.

    For more, see: Rite Aid’s stock soars 7.5% after company surprises with earnings that are less bad than feared

    Eleanor Laise contributed.

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  • Costco to clamp down on sharing of membership cards

    Costco to clamp down on sharing of membership cards

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    Costco Corp. plans to take a tougher line on the sharing of membership cards.

    The bulk retailer intends to ask customers to show photo identification in addition to a Costco
    COST,
    +1.32%

    membership card when going through the self-checkout process. The Dallas Morning News first reported on the development last week.

    A Costco spokesperson emphasized that the company’s policy isn’t changing, as the it always required membership cards at checkout. With the rise of self checkout, however, the company has noticed non-members using cards that don’t belong to them.

    “We don’t feel it’s right that non-members receive the same benefits and pricing as our members,” a Costco spokesperson said.

    The company indicated on its last earnings call that it was likely to hold off on increasing its membership fees, even as an analyst suggested Costco would appear to have room for a hike.

    See more: Grocery prices are still going up, but Costco membership fees aren’t — for now

    “Our view right now is that we’ve got enough levers out there to drive business,” Chief Financial Officer Richard Galanti said on the earnings call, although his view is that Costco would be able to increase fees if it wanted to without meaningfully crimping renewal or signup rates.

    Costco offers Gold Star and Business memberships for $60 each annually, as well as an Executive membership that costs $120. That higher tier of membership gives consumers a 2% reward on qualifying purchases from the company, among other benefits.

    Costco joins Netflix Inc.
    NFLX,
    +0.27%

    in clamping down on what the companies see as an abuse of membership privileges. The streaming service has moved recently to rein in account-sharing by viewers in different households, requiring either that freeloaders pay for their own accounts or that account holders pay extra to add additional viewers.

    Netflix’s initiative seems to be having the desired financial effect, initial third-party data points indicate.

    See also: Netflix stock rally builds as company wins cheers for password-sharing success

    Read: Netflix could be looking at a ‘once-in-a-lifetime opportunity’

    Bill Peters contributed.

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  • ‘This is a game changer’: Ahead of Amazon Prime Day, a new law makes it harder for online sellers to hawk fake or stolen products

    ‘This is a game changer’: Ahead of Amazon Prime Day, a new law makes it harder for online sellers to hawk fake or stolen products

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    Shopping online has just gotten safer.

    The INFORM Consumers Act, which went into effect Tuesday, aims to limit the sales of stolen and counterfeit products on e-commerce platforms. 

    The measure, which requires e-commerce sites to verify and disclose information about their high-volume third-party sellers, was passed into law following a lobbying campaign to address counterfeit products after being left out of the bipartisan Chips and Science Act last year.

    All online marketplaces, including eBay, Etsy, Poshmark and Amazon’s third-party sales platform, will now be required to collect information from high-volume sellers, defined as those selling 200 items or more totaling at least $5,000 over the previous 12 months. These third-party sellers must submit information such as a government-issued ID, a bank-account number, a working email address and phone number, and a taxpayer identification number. 

    Customers will also be able to find the verified contact information for bigger third-party sellers — those with sales of over $20,000 a year — and to get in touch with them outside of the e-commerce platform. In the past, consumers often had to engage within the platform operator in order to communicate with a seller. 

    Those bigger sellers will also have their full names and physical addresses listed on their product pages in addition to their contact information, according to the Federal Trade Commission’s business guide

    “This is a game changer,” said Teresa Murray, director of the consumer watchdog office at U.S. PIRG, a nonprofit that lobbies on behalf of the public interest. “For bad guys, stealing items has generally been the difficult part. Selling things online once you’ve stolen them is easy. We hope that with the INFORM Act, it’s not nearly as easy in the future.”

    ‘The only people opposing this may be thieves.’


    — Teresa Murray, U.S. PIRG

    The act goes into effect just weeks before Amazon Prime Day, when the world’s biggest e-commerce site rolls out discounts for Prime members. This year, Prime Day will be held over two days, on July 11 and 12.

    Picks: Amazon Prime Day is July 11-12. You’ll need the $139-a-year Prime membership to access the deals, but is it actually worth it?

    Also see: Amazon sued by FTC, which alleges people were ‘tricked and trapped’ into Prime subscriptions

    Several e-commerce platforms, including Amazon and eBay, supported the INFORM Consumers Act. TechNet, a national network of technology CEOs and senior executives representing what it calls the innovation economy, wrote to leaders in Congress last December, saying the law would improve consumer safety and increase transparency. 

    In a statement provided to MarketWatch, eBay
    EBAY,
    +2.32%

    said it “fully supports transparency and is committed to a safe selling and buying experience for our customers. We were proud to support” the law “to protect consumers from bad actors who seek to misuse online marketplaces, while also ensuring important protections for sellers. We are fully prepared to comply with the new law.”

    Etsy
    ETSY,
    +3.45%

    said it “has long been supportive of the INFORM Act passing into law, as a balanced and thoughtful approach to make the ecommerce landscape safer for both consumers and sellers.” In a statement provided to MarketWatch, the company said, “We are taking appropriate steps to comply with the INFORM Act requirements.”

    Amazon
    AMZN,
    +1.45%

    and Poshmark, owned by South Korea–based Naver Corp.
    035420,
    -0.59%
    ,
    did not immediately respond to MarketWatch requests for comment.

    Some analysts, however, said the new law lacks stronger protections that were included the SHOP SAFE Act, an earlier bill that did not get passed by Congress. The INFORM Act, they noted, does not hold online platforms liable when a third party sells harmful counterfeit products or when the platform has not followed certain best practices. 

    “Notably, the legislation is supported by Amazon and other marketplaces as it’s seen as a watered-down bill that would head off more stringent legislation like the SHOP SAFE Act,” Ben Koltun, director of research at Beacon Policy Advisors, wrote in a note last year.

    So how can consumers spot counterfeit or stolen items? A guide from PIRG has tips, such as keeping an eye out for products with suspiciously low prices or featuring misspellings or mislabeling or low-quality, photoshopped photos in their listings.

    PIRG also cautions consumers about purchasing medications online. Always check the legitimacy of online pharmacies, it says. 

    “Many online marketplaces haven’t been doing enough to protect consumers from sellers who appear to be peddling stolen or counterfeit goods,” Murray said. “The only people opposing this [new law] may be thieves.”

    Victor Reklaitis contributed.

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  • No more needles? A daily pill may work as well as Wegovy shots to treat obesity

    No more needles? A daily pill may work as well as Wegovy shots to treat obesity

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    That’s a notion that has long fueled hope for many of the more than 40% of Americans who are considered obese — and fueled criticism by those who advocate for wider weight acceptance. Soon, it may be a reality.

    High-dose oral versions of the medication in the weight-loss drug Wegovy may work as well as the popular injections when it comes to paring pounds and improving health, according to final results of two studies released Sunday night. The potent tablets also appear to work for people with diabetes, who notoriously struggle to lose weight.

    Drugmaker Novo Nordisk
    NOVO.B,
    +0.22%

    plans to ask the U.S. Food and Drug Administration to approve the pills later this year.

    “If you ask people a random question, ‘Would you rather take a pill or an injection?’ People overwhelmingly prefer a pill,” said Dr. Daniel Bessesen, chief of endocrinology at Denver Health, who treats patients with obesity but was not involved in the new research.

    That’s assuming, Bessesen said, that both ways to take the medications are equally effective, available and affordable. “Those are the most important factors for people,” he said.

    There have been other weight-loss pills on the market, but none that achieve the substantial reductions seen with injected drugs like Wegovy. People with obesity will be “thrilled” to have an oral option that’s as effective, said Dr. Katherine Saunders, clinical professor of medicine at Weill Cornell Health and co-founder of Intellihealth, a weight-loss center.

    Novo Nordisk already sells Rybelsus, which is approved to treat diabetes and is an oral version of semaglutide, the same medication used in the diabetes drug Ozempic and Wegovy. It comes in doses up to 14 milligrams.

    But results of two gold-standard trials released at the American Diabetes Association’s annual meeting looked at how doses of oral semaglutide as high as 25 milligrams and 50 milligrams worked to reduce weight and improve blood sugar and other health markers.

    A 16-month study of about 1,600 people who were overweight or obese and already being treated for Type 2 diabetes found the high-dose daily pills lowered blood sugar significantly better than the standard dose of Rybelsus. From a baseline weight of 212 pounds, the higher doses also resulted in weight loss of between 15 and 20 pounds, compared to about 10 pounds on the lower dose.

    Another 16-month study of more than 660 adults who had obesity or were overweight with at least one related disease — but not diabetes — found the 50-milligram daily pill helped people lose an average of about 15% of their body weight, or about 35 pounds, versus about 6 pounds with a dummy pill, or placebo.

    That’s “notably consistent” with the weight loss spurred by weekly shots of the highest dose of Wegovy, the study authors said.

    But there were side effects. About 80% of participants receiving any size dose of oral semaglutide experienced things like mild to moderate intestinal problems, such as nausea, constipation and diarrhea.

    In the 50-milligram obesity trial, there was evidence of higher rates of benign tumors in people who took the drug versus a placebo. In addition, about 13% of those who took the drug had “altered skin sensation” such as tingling or extra sensitivity.

    Medical experts predict the pills will be popular, especially among people who want to lose weight but are fearful of needles. Plus, tablets would be more portable than injection pens and they don’t have to be stored in the refrigerator.

    But the pills aren’t necessarily a better option for the hundreds of thousands of people already taking injectable versions such as Ozempic or Wegovy, said Dr. Fatima Cody Stanford, an obesity medicine expert at Massachusetts General Hospital.

    “I don’t find significant hesitancy surrounding receiving an injection,” she said. “A lot of people like the ease of taking a medication once a week.”

    In addition, she said, some patients may actually prefer shots to the new pills, which have to be taken 30 minutes before eating or drinking in the morning.

    Paul Morer, 56, who works for a New Jersey hospital system, lost 85 pounds using Wegovy and hopes to lose 30 more. He said he would probably stick with the weekly injections, even if pills were available.

    “I do it on Saturday morning. It’s part of my routine,” he said. “I don’t even feel the needle. It’s a non-issue.”

    Some critics also worry that a pill will also put pressure on people who are obese to use it, fueling social stigma against people who can’t — or don’t want to — lose weight, said Tigress Osborn, chair of the National Association to Advance Fat Acceptance.

    “There is no escape from the narrative that your body is wrong and it should change,” Osborn said.

    Still, Novo Nordisk is banking on the popularity of a higher-dose pill to treat both diabetes and obesity. Sales of Rybelsus reached about $1.63 billion last year, more than double the 2021 figure.

    Other companies are working on oral versions of drugs that work as well as Eli Lilly and Co.’s
    LLY,
    +0.25%

    Mounjaro — an injectable diabetes drug expected to be approved for weight-loss soon. Lilly researchers reported promising mid-stage trial results for an oral pill called orforglipron to treat patients who are obese or overweight with and without diabetes.

    Pfizer
    PFE,
    -1.11%
    ,
    too, has released mid-stage results for dangulgipron, an oral drug for diabetes taken twice daily with food.

    Novo Nordisk officials said it’s too early to say what the cost of the firm’s high-dose oral pills would be or how the company plans to guarantee adequate manufacturing capacity to meet to demand. Despite surging popularity, injectable doses of Wegovy will be in short supply until at least September, company officials said.

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  • U.S. economy running close to 2% growth rate in second quarter, S&P says

    U.S. economy running close to 2% growth rate in second quarter, S&P says

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    This version corrects the manufacturing PMI data which fell to a six-month low of 46.3 in June from 48.4 in the prior month.

    The numbers: The S&P Global “flash” U.S. service sector activity index fell to a 54.1 in June from 54.9 in the prior month, a two-month low. 

    Economists surveyed by the Wall Street Journal has forecast a reading of 53.3.

    The S&P Global “flash” U.S. manufacturing sector index, meanwhile, slid to a six-month low of 46.3 from 48.4 in May. Economists had expected a 49 reading. 

    Readings above 50 signifies expansion; below that, contraction.

    Key details: In the services sector, new orders increased at a strong rate in June. The pace of expansion was close to May’s 13-month high.

    On the other hand, manufacturers recorded the fastest rate of contraction in new orders since last December. They linked the drop to muted consumer confidence. Foreign client demand was also subdued.

    Inflation was seen as moderating. The overall rate of selling prices for goods and services dropped to the lowest level since late 2020.

    Big picture: The S&P PMIs try to look ahead at the health of the economy, a critical question with even Federal Reserve officials saying that the outlook for the U.S. is hidden in a fog.

    A composite output index from S&P showed the fifth straight month of increases in private sector activity.

    What S&P Global said: “The overall rate of expansion of business activity in the
    US remained robust in June, consistent with GDP rising at a rate of 1.7% to put second quarter growth in the region of 2%,” said Chris Williamson, chief business economist at S&P Global.

    Market reaction: Stocks
    DJIA,
    -0.65%

    SPX,
    -0.77%

    opened lower on Friday on talk of more interest rate hikes from global central banks. The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.741%

    fell to 3.72%.

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  • How hard has it been to cancel Amazon Prime? Start by navigating 4 pages, 6 clicks and 15 options.

    How hard has it been to cancel Amazon Prime? Start by navigating 4 pages, 6 clicks and 15 options.

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    Signing up for Amazon Prime is as easy as 1-2-3. Canceling it, not so much.

    For years, up until this past April, the online retail giant made customers trying to quit its signature service navigate an odyssey through a labyrinthine system called the “Iliad Flow” named after the epically long and complex masterwork by the Greek poet Homer. 

    According to a civil lawsuit filed Wednesday by the Federal Trade Commission, Amazon customers were required to make their way through a four-page, six-click, 15-option process to stop paying for the service. One wrong click, and they were sent back to the beginning, the lawsuit said.

    The FTC noted that Amazon
    AMZN,
    +3.69%

    maintained the multistep process even though new subscribers in the U.S. to $14.99-a-month or $139-a-year Prime accounts needed only one or two clicks. And even though subscribers could sign up on a multitude of devices, they could only cancel using their desktop computer or mobile phone or by calling customer service.

    The FTC suit also accused Amazon of manipulating millions of customers into inadvertently signing up for Prime and then hitting them with automatic renewals without warning.

    Amazon has dismissed the charges as misguided, adding that the lawsuit is legally and factually inaccurate. It has vowed to fight the FTC.

    The FTC said in court papers that Amazon created the complex “Iliad Flow” exit strategy in 2016 and kept it in place until April of this year, when it caught wind that the agency was preparing to file a lawsuit about the practice.

    During that time frame, Amazon quadrupled the number of global Prime subscribers from around 50 million to more than 200 million. The program brings around $25 billion into Amazon’s coffers every year. 

    The suit described an allegedly maddening process for a customer to actually cancel a subscription. 

    To start, a subscriber first had to find the “Iliad Flow,” which was not made easy, the FTC suit said. A customer had to select the “accounts and list” dropdown menu, navigate to the third column and then select the eleventh option there: Prime Membership.

    That would bring the customer to the Prime Central page. There, one would have to click the “manage membership” button to trigger options that finally included an “end membership” button. But that was only the beginning.

    Only after clicking “end membership” would the customer enter the “Iliad Flow” process. From there, a customer would need to navigate three more pages, each with a multitude of options, to finally complete canceling the subscription.

    This is one of several web pages a Prime customer would need to navigate in order to cancel the service, the FTC said.


    Federal Trade Commission

    On the first page, customers were forced to “take a look back at [their] journey with Prime” — a kind of greatest-hits reel of Prime services used over the years. The page was also loaded with marketing material for a multitude of Prime services, with links reading: “Start shopping today’s deals!” and “You can start watching videos by clicking here!” or “Start listening now!”

    One wrong click would knock the subscriber out of the “Iliad Flow.” 

    If the subscriber managed to navigate to the bottom of the page, he or she would finally find a “continue to cancel” button. That would take them to Page 2.

    According to the FTC, that page would present the customer with a number of discount options, such as switching from monthly to annual payments, or taking advantage of student discounts or discounts for people on government assistance. The page also included warning icons and links stating: “Items tied to your Prime membership will be affected if you cancel your membership,” and “By canceling, you will no longer be eligible for your unclaimed Prime exclusive offers.” 

    Clicking on any of those would take the subscriber out of the “Iliad Flow.”

    At the bottom of that page was another “continue to cancel” button, which would take the user to Page 3.

    If you managed to get to this page, you were only six options away from actually being able to quit Amazon’s Prime service, the FTC suit said.


    Federal Trade Commission

    On this final page, a customer was presented with five options, only the last of which — “end now” — would actually allow the subscription to be canceled. The other options included pausing the subscription or canceling its auto-renewal function. Pressing any of the four other choices would bring the user out of the “Iliad Flow.” They would have to start over if they wanted to continue.

    Only after successfully navigating this maze of web pages would the customer be allowed to actually cancel the service.

    The suit said this process caused cancellations to drop significantly.

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  • Alibaba, Dice, Arcellx, Avis, PayPal, and More Stock Market Movers

    Alibaba, Dice, Arcellx, Avis, PayPal, and More Stock Market Movers

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  • 14,555 Shares in Costco Wholesale Co. (NASDAQ:COST) Acquired by Talbot Financial LLC

    14,555 Shares in Costco Wholesale Co. (NASDAQ:COST) Acquired by Talbot Financial LLC

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    Talbot Financial LLC acquired a new position in Costco Wholesale Co. (NASDAQ:COSTGet Rating) in the 4th quarter, according to its most recent disclosure with the Securities and Exchange Commission. The firm acquired 14,555 shares of the retailer’s stock, valued at approximately $6,644,000.

    Other institutional investors and hedge funds also recently bought and sold shares of the company. Canal Capital Management LLC boosted its holdings in Costco Wholesale by 8.5% in the 4th quarter. Canal Capital Management LLC now owns 563 shares of the retailer’s stock valued at $257,000 after purchasing an additional 44 shares during the period. TCG Advisory Services LLC boosted its holdings in Costco Wholesale by 2.6% in the 3rd quarter. TCG Advisory Services LLC now owns 817 shares of the retailer’s stock valued at $386,000 after purchasing an additional 21 shares during the period. united american securities inc. d b a uas asset management boosted its holdings in Costco Wholesale by 105.5% in the 3rd quarter. united american securities inc. d b a uas asset management now owns 41,525 shares of the retailer’s stock valued at $19,611,000 after purchasing an additional 21,319 shares during the period. Accurate Wealth Management LLC bought a new position in Costco Wholesale in the 4th quarter valued at $191,000. Finally, Capital Investment Advisors LLC boosted its holdings in Costco Wholesale by 1.9% in the 4th quarter. Capital Investment Advisors LLC now owns 13,748 shares of the retailer’s stock valued at $6,276,000 after purchasing an additional 252 shares during the period. 66.03% of the stock is owned by institutional investors.

    Insider Activity at Costco Wholesale

    In related news, EVP Caton Frates sold 600 shares of the stock in a transaction dated Tuesday, April 11th. The shares were sold at an average price of $497.35, for a total transaction of $298,410.00. Following the sale, the executive vice president now directly owns 4,320 shares of the company’s stock, valued at approximately $2,148,552. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. 0.22% of the stock is currently owned by insiders.

    Analysts Set New Price Targets

    COST has been the topic of several research reports. Evercore ISI lowered their price objective on shares of Costco Wholesale from $545.00 to $535.00 in a research report on Thursday, April 6th. Oppenheimer restated an “outperform” rating and set a $550.00 price objective on shares of Costco Wholesale in a research report on Thursday, April 6th. Telsey Advisory Group restated an “outperform” rating and set a $540.00 price objective on shares of Costco Wholesale in a research report on Thursday, April 6th. TheStreet upgraded shares of Costco Wholesale from a “c” rating to a “b” rating in a research report on Thursday, March 23rd. Finally, Truist Financial decreased their price objective on Costco Wholesale from $571.00 to $568.00 in a report on Thursday, May 4th. Five research analysts have rated the stock with a hold rating and fifteen have issued a buy rating to the company. According to data from MarketBeat, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $548.72.

    Costco Wholesale Stock Up 1.0 %

    NASDAQ:COST opened at $527.20 on Thursday. The firm’s 50-day moving average price is $501.51 and its 200-day moving average price is $492.38. The company has a market capitalization of $233.60 billion, a PE ratio of 39.05, a P/E/G ratio of 4.36 and a beta of 0.79. The company has a debt-to-equity ratio of 0.28, a current ratio of 1.08 and a quick ratio of 0.57. Costco Wholesale Co. has a 1-year low of $443.20 and a 1-year high of $564.75.

    Costco Wholesale (NASDAQ:COSTGet Rating) last released its earnings results on Thursday, May 25th. The retailer reported $3.43 earnings per share for the quarter, topping analysts’ consensus estimates of $3.32 by $0.11. The firm had revenue of $53.65 billion for the quarter, compared to the consensus estimate of $54.58 billion. Costco Wholesale had a net margin of 2.55% and a return on equity of 28.18%. The company’s revenue was up 2.0% compared to the same quarter last year. During the same period in the prior year, the firm earned $3.17 EPS. On average, equities analysts predict that Costco Wholesale Co. will post 14.4 EPS for the current fiscal year.

    Costco Wholesale Increases Dividend

    The company also recently disclosed a quarterly dividend, which was paid on Friday, May 19th. Investors of record on Friday, May 5th were given a dividend of $1.02 per share. This represents a $4.08 annualized dividend and a yield of 0.77%. This is an increase from Costco Wholesale’s previous quarterly dividend of $0.90. The ex-dividend date of this dividend was Thursday, May 4th. Costco Wholesale’s dividend payout ratio is 30.22%.

    Costco Wholesale Profile

    (Get Rating)

    Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, Canada, the United Kingdom, Mexico, Japan, Korea, Australia, Spain, France, Iceland, China, and Taiwan. It offers branded and private-label products in a range of merchandise categories.

    Read More

    Want to see what other hedge funds are holding COST? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Costco Wholesale Co. (NASDAQ:COSTGet Rating).

    Institutional Ownership by Quarter for Costco Wholesale (NASDAQ:COST)

    Receive News & Ratings for Costco Wholesale Daily – Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for Costco Wholesale and related companies with MarketBeat.com’s FREE daily email newsletter.

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  • Hennes & Mauritz 2Q Sales SEK57.62B

    Hennes & Mauritz 2Q Sales SEK57.62B

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    By Dominic Chopping

    STOCKHOLM–Sweden’s H&M Hennes & Mauritz on Thursday reported fiscal second-quarter sales that were slightly below expectations.

    The fashion retailer said sales for the quarter ended May 31 increased by 6% on year to 57.62 billion Swedish kronor ($5.38 billion), while net sales in local currencies were “flattish”.

    Analysts…

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  • ‘Greedflation’ is replacing inflation as companies raise prices for bigger profits, report finds

    ‘Greedflation’ is replacing inflation as companies raise prices for bigger profits, report finds

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    That’s the practice by many S&P 500 food and consumer companies of raising prices to protect what a new report calls their “cushioned corporate profits,” and it has enabled them to boost margins through the current inflationary period.

    Companies including Kimberly-Clark Corp.
    KMB,
    -0.45%
    ,
    PepsiCo Inc.
    PEP,
    -0.18%
    ,
    General Mills Inc.
    GIS,
    -0.88%

    and Tyson Foods Inc.
    TSN,
    -0.36%

    have on recent earnings calls touted their ability to raise prices, earning tidy profits and rewarding their shareholders as they go, according to the report from Accountable.US, a liberal-leaning consumer-advocacy group.

    And they have signaled their intention to continue to take “price actions” even as the Federal Reserve has hiked interest rates an unprecedented 10 times in an effort to tame inflation.

    “Higher interest rates haven’t stopped S&P companies, especially in the big food industry, from raising consumer prices despite reporting billions in extra net earnings and over a trillion dollars in new giveaways to wealthy investors,” said Liz Zelnick, director of economic security and corporate power at Accountable.US.

    “Corporate greed is a stubborn thing and requires serious action from Congress. The Fed has not seen an adequate return on its investment in a policy that has already created fissures in the economy that could lead to recession. It’s just not worth it,” she said. 

    Now read: Skip, pause or hike? A guide to what is expected from the Fed on Wednesday.

    Accountable.US is not alone in calling out price hikes on essentials including food. Walmart Inc.
    WMT,
    +0.73%

    is also unhappy with packaged-food companies that have steadily raised prices in dry grocery and consumable goods, according to a recent report from research company CFRA.

    “Given Walmart’s enormous bargaining power over its suppliers, we expect the retail giant to push back on further price increases from its packaged-food suppliers,” he said. That is expected to hurt margins, especially if volume growth does not recover.

    For more, see: Inflation in goods from cereal to soup has given a boost to consumer food stocks. Can Walmart help bring prices, both food and stock, down?

    May inflation data released Tuesday found that food prices were up 0.2% from April, after remaining flat for the previous two months. Food prices are up 6.7% over the last year. The food-at-home index is up 5.8% over the last year, while the index for cereals and bakery products is up 10.7%.

    Food prices started to rise about two years ago, when supply-chain issues and higher fuel and commodity prices led companies to pass some of those costs on to customers.

    But companies appear determined to raise prices even more, despite a decline in shipping and gas costs. Gasoline was down 5.6% in May from April and fuel oil fell 7.7%, according to consumer-price-index figures.

    Also read: U.S. inflation slows again, CPI shows, and might keep Fed on sidelines

    Kimberly-Clark executives told analysts on its recent earnings call that the company is able to “rapidly implement broad pricing actions” and acknowledged that “pricing has continued to be a big driver behind our top-line growth.”

    The company’s first-quarter earnings topped expectations and it raised guidance for the full year. That’s after it raised prices by 10% for a second straight quarter, driving margins wider by 340 basis points.

    Shareholders were rewarded to the tune of $425 million during the quarter, the Accountable.US report notes.

    See also: Colgate-Palmolive’s stock pops after earnings beat as company raises prices by double-digit percentage

    PepsiCo Chief Executive Ramon Laguarta told analysts on that company’s recent earnings call that most of its price increases are behind it.

    However, he said, “obviously, there are some markets, highly inflationary markets around the world, where we might have to take additional pricing. If you think about Argentina, Turkey, Egypt — those kinds of markets where the currencies are suffering. But the majority of our pricing is already done,” he said, according to a FactSet transcript.

    PepsiCo’s 2022 earnings rose 16.9% to nearly $9 billion, and it spent more than $7.6 billion on stock buybacks and dividends, with the former up 1,313% from 2021.

    General Mills, meanwhile, bragged about “getting smart about how we look at pricing” on its recent call. The parent of brands including Cheerios, Nature Valley, Blue Buffalo pet products and Pillsbury raised its fiscal 2023 guidance in February.

    And Tyson executives touted the “significant pricing power of our portfolio with a year-over-year increase of 7.6%.” Tyson’s latest quarter included a surprise loss, as it was hit by weak demand for meat, along with plant closures and job cuts.

    For more, see: Tyson Foods stock slides after meat producer swings to surprise loss

    But Tyson had net income of over $3.2 billion in 2022, up from $3 billion in 2021, and it rewarded shareholders with $1.35 billion in buybacks and dividends.

    For Accountable.US, it’s more compelling evidence that the Fed’s rate-hike strategy “has failed to root out one of the main drivers of inflation and should give the [Federal Open Market Committee] pause before lifting rates again this week to the detriment of jobs and the economy.”

    The Consumer Staples Select Sector SPDR exchange-traded fund
    XLP,
    +0.36%

    has fallen 1.6% to date in 2023, while the SPDR S&P Retail ETF
    XRT,
    +1.89%

    has gained 4.6%. The S&P 500
    SPX,
    +0.62%

    has gained 13% in the same period.

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  • Industrial Alliance Investment Management Inc. Decreases Stake in Costco Wholesale Co. (NASDAQ:COST)

    Industrial Alliance Investment Management Inc. Decreases Stake in Costco Wholesale Co. (NASDAQ:COST)

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    Industrial Alliance Investment Management Inc. reduced its holdings in Costco Wholesale Co. (NASDAQ:COSTGet Rating) by 3.9% during the 4th quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission. The institutional investor owned 76,991 shares of the retailer’s stock after selling 3,157 shares during the period. Costco Wholesale makes up 1.0% of Industrial Alliance Investment Management Inc.’s holdings, making the stock its 21st biggest position. Industrial Alliance Investment Management Inc.’s holdings in Costco Wholesale were worth $35,146,000 as of its most recent SEC filing.

    Other hedge funds and other institutional investors have also recently modified their holdings of the company. United Bank raised its stake in Costco Wholesale by 9.2% during the first quarter. United Bank now owns 5,254 shares of the retailer’s stock worth $3,026,000 after purchasing an additional 444 shares during the period. Mirae Asset Global Investments Co. Ltd. increased its position in shares of Costco Wholesale by 33.6% during the first quarter. Mirae Asset Global Investments Co. Ltd. now owns 383,691 shares of the retailer’s stock valued at $220,948,000 after acquiring an additional 96,566 shares during the last quarter. Covestor Ltd increased its position in shares of Costco Wholesale by 87.1% during the first quarter. Covestor Ltd now owns 232 shares of the retailer’s stock valued at $134,000 after acquiring an additional 108 shares during the last quarter. Bridgefront Capital LLC acquired a new stake in shares of Costco Wholesale during the first quarter valued at about $333,000. Finally, Next Century Growth Investors LLC increased its position in shares of Costco Wholesale by 0.9% during the first quarter. Next Century Growth Investors LLC now owns 3,414 shares of the retailer’s stock valued at $1,965,000 after acquiring an additional 30 shares during the last quarter. 66.03% of the stock is owned by hedge funds and other institutional investors.

    Insider Transactions at Costco Wholesale

    In other news, EVP Caton Frates sold 600 shares of the business’s stock in a transaction that occurred on Tuesday, April 11th. The shares were sold at an average price of $497.35, for a total transaction of $298,410.00. Following the completion of the sale, the executive vice president now owns 4,320 shares in the company, valued at approximately $2,148,552. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this link. Insiders own 0.22% of the company’s stock.

    Analyst Upgrades and Downgrades

    A number of brokerages have weighed in on COST. William Blair began coverage on shares of Costco Wholesale in a research report on Wednesday, April 12th. They set an “outperform” rating for the company. Roth Capital reiterated a “neutral” rating on shares of Costco Wholesale in a research report on Friday, March 10th. Northcoast Research upgraded shares of Costco Wholesale from a “neutral” rating to a “buy” rating and set a $560.00 price target for the company in a research report on Tuesday, March 7th. Deutsche Bank Aktiengesellschaft dropped their price target on shares of Costco Wholesale from $575.00 to $574.00 in a research report on Thursday, April 6th. Finally, StockNews.com cut shares of Costco Wholesale from a “buy” rating to a “hold” rating in a research report on Friday, June 2nd. Five investment analysts have rated the stock with a hold rating and fifteen have issued a buy rating to the company’s stock. According to MarketBeat, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $548.72.

    Costco Wholesale Stock Up 0.7 %

    Shares of Costco Wholesale stock opened at $520.97 on Tuesday. Costco Wholesale Co. has a 52-week low of $443.20 and a 52-week high of $564.75. The company has a 50 day moving average of $500.42 and a 200 day moving average of $492.22. The company has a quick ratio of 0.57, a current ratio of 1.08 and a debt-to-equity ratio of 0.28. The company has a market capitalization of $230.84 billion, a P/E ratio of 38.59, a P/E/G ratio of 4.32 and a beta of 0.79.

    Costco Wholesale (NASDAQ:COSTGet Rating) last issued its quarterly earnings data on Thursday, May 25th. The retailer reported $3.43 earnings per share for the quarter, topping the consensus estimate of $3.32 by $0.11. The business had revenue of $53.65 billion during the quarter, compared to the consensus estimate of $54.58 billion. Costco Wholesale had a net margin of 2.55% and a return on equity of 28.18%. The company’s revenue was up 2.0% compared to the same quarter last year. During the same quarter in the previous year, the firm earned $3.17 EPS. As a group, research analysts forecast that Costco Wholesale Co. will post 14.4 EPS for the current fiscal year.

    Costco Wholesale Increases Dividend

    The business also recently disclosed a quarterly dividend, which was paid on Friday, May 19th. Stockholders of record on Friday, May 5th were given a dividend of $1.02 per share. This represents a $4.08 annualized dividend and a dividend yield of 0.78%. The ex-dividend date was Thursday, May 4th. This is an increase from Costco Wholesale’s previous quarterly dividend of $0.90. Costco Wholesale’s payout ratio is currently 30.22%.

    Costco Wholesale Company Profile

    (Get Rating)

    Costco Wholesale Corp. engages in the operation of membership warehouses through wholly owned subsidiaries. It operates through the following geographical segments: United States, Canada, and Other International Operations. The company was founded by James D. Sinegal and Jeffrey H. Brotman in 1983 and is headquartered in Issaquah, WA.

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    Want to see what other hedge funds are holding COST? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Costco Wholesale Co. (NASDAQ:COSTGet Rating).

    Institutional Ownership by Quarter for Costco Wholesale (NASDAQ:COST)

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