Nestlé fashions a more activist-friendly board 19 Jan 2018 The CEOs of Zara-owner Inditex and Adidas are among the Swiss giant’s proposed new heavyweight non-executives. Their e-commerce expertise will help steer efforts to sell more directly to consumers. They also pre-empt any move by activist Dan Loeb to install his own candidates.
Amex is a rare real victim of U.S. tax cuts 18 Jan 2018 The $86 bln charge-card group took a big hit from December’s tax revamp. Unlike at other financial firms, its capital ratios fell below acceptable levels. Suspending buybacks to rebuild the cushion makes sense, but it will delay the benefits of the new low-tax regime.
Amazon HQ2 choices disappointingly undisruptive 18 Jan 2018 The e-commerce giant has cut the field for its second headquarters to 20 prime locations including Dallas, Atlanta and New York. Hundreds of cities hoped Amazon would think outside the box, but a desire for talent and a welcoming environment led it to the usual hot spots.
Carrefour’s bad news will come in threes 17 Jan 2018 Europe’s biggest retailer issued a second profit warning in five months on weaker sales. New CEO Alexandre Bompard will unveil his turnaround plan next week. With a need to ramp up online investment and cut back on hypermarket stores, notably in France, greater pain is to come.
Unilever’s $47 bln Indian arm is real beauty spot 17 Jan 2018 India is set to become the consumer giant’s largest market by sales. Hindustan Unilever dominates sales of soap and is well positioned to fight off rivals. A multiple of almost 50 times forward earnings – more than twice its parent’s valuation – reflects that promise.
Sugar-for-supplements swap will test Nestlé boss 16 Jan 2018 The KitKat maker is selling its U.S. candy arm to Ferrero for a sweet $2.8 bln to invest in products with better growth than junk food. But high valuations for alternatives like vitamin pills limit CEO Mark Schneider’s opportunities to make Nestlé a clean-living champion.
Uniqlo owner has too much cash insulation 12 Jan 2018 Earnings from Fast Retailing underline the turnaround at the Japanese retailer, especially overseas. All those puffer jackets and sweaters have generated a $7 bln-plus cash pile. If Fast does not share more of that with shareholders, troublemakers could show up.
Fujifilm has chance to ink a solid deal with Xerox 11 Jan 2018 A full takeover by the $19 bln Japanese company of its U.S. partner would be gutsy, especially given Fujifilm’s already shaky grasp on overseas outposts. Still, with activist Carl Icahn heaping pressure on the American printer and copier maker, a smaller deal could make sense.
Sainsbury’s is proxy for UK retail’s split fate 10 Jan 2018 The Argos-owner’s food business had a better Christmas than its clothing and general merchandise. UK consumers, stung by high inflation, are spending less on non-essential items, but still need to eat. That means grocers are better able to pass on rising prices to customers.
Can Nelson Peltz clean up at P&G? 8 Jan 2018 Now that Trian Management founder Nelson Peltz is on the board of consumer-goods giant Procter & Gamble, Breakingviews has created a calculator to show how the market value of the $230 billion group could increase if revenue growth and margins improve.
Peltz may go from nice to nasty at P&G 8 Jan 2018 The activist, now on the $230 bln consumer-goods giant’s board, has said P&G should slash costs and steal market share. That may boost the stock by over 10 pct, Breakingviews calculates. To get much more, Peltz might suggest a deeper cut: offloading razor maker Gillette.
British shoppers are a shaky economic backstop 8 Jan 2018 Consumer spending on Visa cards in 2017 was the weakest in five years. Profit warnings from retailers Mothercare and Debenhams add to the glum outlook. Despite easing cost inflation and a tight job market, customers who have kept the UK economy moving are becoming less reliable.
Verizon will be one of 2018’s few mega-dealmakers 4 Jan 2018 As the ground shakes more strongly under the media and telecom industries, the U.S. wireless titan has only reacted tentatively. Owning Yahoo hardly qualifies as pivotal. Buying Dish, however, could make a difference. Big mergers are on the wane, but Verizon will buck the trend.
Next cheer may delay essential style overhaul 3 Jan 2018 The UK clothing retailer is more upbeat about the outlook for full-year profit. The danger is that healthier sales and diminishing price pressures will tempt CEO Simon Wolfson to dodge tough decisions, such as much-needed store closures.
Activists’ guide to 2018 (sponsored by P&G) 2 Jan 2018 Investors seeking new strategies, more dividends or board seats aren't going away. The siege of the Pampers maker by Trian, which ultimately won a board seat, will embolden others to take up the cause. Resistance isn't futile, but needs to be more carefully considered.
As Macau welcomes the humble gambler, bet on MGM 29 Dec 2017 In 2018, poorer customers will outshine high-rollers, who have had an impressive run for the world's largest wagering hub. That would signal a reversal of fortunes for some Macau operators. As it opens a new casino targeting the masses, laggard MGM is poised to hit the jackpot.
Temperance is the new craft beer for drinks groups 28 Dec 2017 Health awareness and restrained young drinkers are driving demand for booze-free tipples. Growth in volumes of low-alcohol beer will outstrip traditional drinks fivefold next year. It’s a new source of expansion for global companies as the craft beer craze loses its froth.
Once-stodgy banks will gain upper hand in fintech 27 Dec 2017 Scandals hit SoFi and Lending Club. Earnest’s down-round sale showed building scale is hard. Such ill fortune is a boon for traditional players as they start cranking out more of their own tech-enabled tools to improve customer service and cut costs. It’s their battle to lose.
Unilever and Nestlé will sidestep supermarkets 27 Dec 2017 The duo’s decade-high operating margins are being squeezed between grocers, who are bargaining harder on price, and new ways of shopping. Selling direct to consumers is one way to reach ambitious profit goals that were set to appease activists. But the strategy is risky.
Xiaomi IPO could plug into Internet of Things hype 22 Dec 2017 Sales at the Chinese tech company are booming, Reuters reports, probably thanks to a turnaround in smartphones. A mooted $100 billion valuation at listing sounds aggressive, but Xiaomi might be able to position itself as the first big consumer-facing play on the connected home.