Kraft Heinz is desperate for a fresh variety 21 Feb 2019 An earnings miss, a $15 bln writedown and an SEC subpoena sent the ketchup maker’s stock plunging over 20 pct after hours Thursday. It’s a sign CEO Bernardo Hees’s cost-cutting strategy has hit a dead end. Owners 3G and Berkshire Hathaway need to find a new recipe for growth.
Homeplus shopping pain will resist Korean IPO cure 22 Feb 2019 Asian buyout firm MBK will list some of the hypermarket buildings it bought from Tesco. This $1.5 bln REIT should fly in yield-hungry Seoul. Yet the split could make it harder to sell the rest. Separating property and operating units was a boom-era trick that ended badly.
Scale is no easy remedy for CVS price pressures 20 Feb 2019 The pharmacy firm slashed its profit forecast due to a squeeze on reimbursements and slower drug-price growth, wiping $7 bln off its market value. Buying Aetna was supposed to help it cut costs and improve patient outcomes, but that’s harder than banking on healthcare inflation.
Walmart is smallest loser in UK supermarket salvo 20 Feb 2019 British regulators released a damning view on the 7.3 bln pound tie-up of Sainsbury’s and Asda, owned by the U.S. group. The pair need a plan to fend off German discounters. But the verdict limits M&A options. Asda’s global clout helps. Sainsbury’s looks set for further decline.
Veganism may prove a more durable diet fad 19 Feb 2019 Climate change and concern for animal welfare are prompting more consumers to shun meat. As with the low-carb trend of the early 2000s, companies are scrambling to keep up: vegan sausage rolls helped boost British baker Greggs’ sales. The shift is more than a flash in the pan.
Walmart proves big is relatively beautiful 19 Feb 2019 The $290 bln company’s quarterly sales defied the overall slump that hit U.S. retailers in December. Earnings beat expectations too. Walmart’s growing online revenue and cheap grocery business should help it capitalize on weaker retailers’ misfortune in a softer economy.
HSBC pushes investor goodwill to its limits 19 Feb 2019 The Asia-focused bank fell short of expectations after a fourth-quarter slowdown. Even so, boss John Flint is sticking to his 11 pct return on equity target for 2020 despite strong Brexit and China headwinds. Already valued at 1.2 times book value, there is no room for error.
Danone’s self-help plan B gets more important 19 Feb 2019 The French dairy giant is inching towards its 2020 revenue growth target. But operating margins lag peers’ and it trades at a tangible discount. To face down future activism, CEO Emmanuel Faber should be compiling a list of further cuts or deals to buy faster-growing brands.
New Reckitt CEO will have breakup on the brain 18 Feb 2019 Separating cleaning goods like Vanish and Dettol from Nurofen and health products helped outgoing CEO Rakesh Kapoor lift sales last year. A full breakup could boost Reckitt’s market value by more than a tenth, Breakingviews calculates. It’ll be the new boss’s first big task.
U.S. mortgage fix is hostage to 2020 election 14 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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 Feb 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.