Consumer Products and Services

U.S. mortgage fix is hostage to 2020 election

14 February 2019

Trump officials have hinted they may bypass Congress to overhaul Fannie Mae and Freddie Mac. The giant housing-finance firms’ proposed new overseer is certainly no fan. Reform is long overdue. But messing with Americans’ mortgages as a presidential vote looms is risky.

Levi’s IPO fails the Marie Kondo test

14 February 2019

The denim maker plans to list its shares after decades in private hands. But the super-voting stock and staggered board that entrench the family owners detract from its strong growth. To quote the Japanese wardrobe-sifting guru: Does it spark joy? As it stands, the answer is no.

Nestlé delivers just enough to fend off Dan Loeb

14 February 2019

The Swiss consumer giant’s 2018 results show the Kit Kat maker is on track to meet its modest operating margin goal. That is the minimum to keep activist Third Point at bay. Speeding up disposals and aiming for more ambitious targets would be bolder – and achievable.

The Exchange: Hollowing out white-collar jobs

13 February 2019

In “The Globotics Upheaval” Richard Baldwin predicts machine learning and instant communications will disrupt service workers just as automation and offshoring upended Western factories. He tells Breakingviews what’s coming, and what we can do to slow it down.

Heineken sets premium bar high for rival AB InBev

13 February 2019

The world’s two mega-brewers are aggressively wooing customers to pay up for higher-quality, and craftier, suds. The Dutch brewer’s full-year results suggest it’s managing the shift well despite - or perhaps because of - the increased heft of its $129 bln competitor.

Toshiba’s big early miss invites investor revolt

13 February 2019

The Japanese electronics giant has cut its operating profit forecast by two-thirds barely three months after giving guidance. That doesn’t inspire confidence it can deliver on its five-year strategic plan. Toshiba’s large cohort of foreign shareholders could get more demanding.

Chinese banks resist maxing out credit cards

13 February 2019

Lenders have issued more than 650 mln of them to local consumers, facilitating debt-fueled shopping sprees. It’s a lucrative but risky supplement to other types of loans, and some banks are pulling back. That’s negative for economic stimulus, but financially prudent.

Uber steers around its Asian innovation conundrum

13 February 2019

After exits from China and Southeast Asia, the ride-hailing giant's eastern footprint hinges on India and promising spots, like Taiwan. Emerging market problems force a rapid pace of change. Safety buttons and a "lite" app are encouraging, but local rivals are moving faster.

P&G offers roadmap for new Colgate CEO

12 February 2019

Noel Wallace takes over with the $57 bln soap and toothpaste maker a stock-market laggard in recent years. Though he’s a Colgate veteran, he needs fresh ideas to boost market share. Activist Nelson Peltz has stirred P&G into action. Wallace could follow his competitor’s lead.

JAB offer for Coty puts lipstick on a pig

12 February 2019

The investment firm’s bid to take a majority stake in the troubled perfumer has more than a whiff of opportunism. Coty’s shares collapsed after a bad deal that JAB masterminded. Stopping short of a full takeover shortchanges shareholders, and suggests JAB isn’t yet done meddling.

Pinduoduo’s bid for calm has its limits

12 February 2019

Even by Chinese tech company standards, the $31 bln e-commerce outfit has had a volatile start to public life. A $1 bln follow-on will up the float and help to ease wild price swings. But ballooning losses, competition with Alibaba, and legal woes will continue to create a stir.

China bling scare was healthy reality check

8 February 2019

Birkin bag maker Hermes reported strong fourth-quarter sales momentum in the Middle Kingdom, echoing rival LVMH and easing fears of a slump in Chinese demand that hit luxury shares last year. Yet valuations were probably too high. The correction is welcome.

L’Oréal can save up to buy out Nestlé

7 February 2019

Buoyant demand from Chinese shoppers boosted the cosmetics giant’s sales and margins in 2018. The Lancôme owner’s growing 2.8 billion euro net cash pile may seem an unnecessary indulgence. But it will come in handy if Nestlé gives in to pressure to reduce its 23 pct stake.

Pernod Ricard half answers Elliott critique

7 February 2019

The spirits maker converted more sales into operating profit in the second half of 2018, and promised higher growth and more savings. That addresses some of the activist investor’s concerns. But it glossed over worries about the family-dominated board lacking outside perspective.

Asian drinkers justify Carlsberg’s premium price

6 February 2019

The Danish brewer trails bigger rivals AB InBev and Heineken in terms of profitability, yet trades on a higher multiple of earnings. That reflects the promise of higher margins, and greater exposure to growth in China and India. A $491 million share-buyback plan helps too.

SoftBank’s Einstein pitch fails relativity test

6 February 2019

Masayoshi Son invoked the Nobel Prize winner’s theories to argue the Japanese group is worth $110 bln more. But adjust his sums for low liquidity and the possibility of squandered cash, and the black hole is small. Massive objects like the Vision Fund distort the laws of physics.

Elliott’s Pernod overhaul can start with wine

6 February 2019

The spirits maker’s wines could be worth 2 billion euros including debt. Following rival Diageo’s lead by selling lower-margin wine brands could boost Pernod Ricard’s share price. That might keep aggressive activist shareholder Elliott at bay.

Japanese carmakers can find trade-war refuges

4 February 2019

A stronger yen docked some $390 mln from Honda's revenue last quarter, adding to other blows. It's been tough to juggle a safe-haven domestic currency and growth that comes largely from overseas. Rival Mitsubishi's stellar results, built on emerging markets, show it can be done.

PlayStation glitch lights fire under Sony CEO

1 February 2019

The $64 bln electronics giant missed operating profit forecasts, as video-games sales disappointed and smartphones tanked. As cash-cow businesses slow, the heat is rising for Kenichiro Yoshida to deliver growth from music and movies - and ditch the unprofitable handsets unit.

KFC is finger lickin’ in a less appetising China

1 February 2019

Mainland appetite for fried chicken helped Yum China turn a fourth-quarter profit and pushed same-store sales up 2 pct, beating forecasts. It's still expanding fast too. That suggests a resilient bet on Chinese consumers: even as budgets tighten, cheap eats stay on the menu.