Gapping down
In reaction to earnings/guidance:
- CLX -12.4%, SKYW -9.7%, F -5.5%, LGF.A -3.5%, NOV -3.3%, DLB -2.7% (also acquires Millicast), APD -2.4%, RGA -1.6%, MCHP -1.3% (also increases dividend), OTEX -1.1% (also co and Google Cloud to collaborate on next generation content services), SWKS -0.8%, PRU -0.8%, SNY -0.7%, SPB -0.6%, ETN -0.5%
Other news:
- VNDA -26.1% (reports results from the Phase III study of tradipitant in gastroparesis; did not meet its prespecified primary endpoint)
- OCFC -1.2% (to acquire majority interest in Trident Abstract Title Agency)
- COST -0.6% (names new COO)
Analyst comments:
- KLIC -2.9% (downgraded to Hold from Buy at Needham)
- BIIB -2% (downgraded to Market Perform from Outperform at BMO Capital Markets)
- CI -1.6% (downgraded to Hold from Buy at Deutsche Bank)
- EXC -1.1% (downgraded to Neutral from Buy at Goldman)
Gapping up
In reaction to earnings/guidance:
- SNAP +45.6%, BILL +24.8%, PINS +12.6%, AMZN +12.2% (also increases price for Prime membership), U +12%, EGAN +10.4%, LESL +8.3%, NWSA +6.9%, SYNA +6.8%, SKX +6.8%, MWA +6.4%, EAF +6.1%, PCTY +5.8%, ENVA +5.7%, PYCR +4.5%, GPRO +4.3% (also announces $100 mln share buyback authorization), VIAV +4%, WERN +3.2%, NLOK +2.8%, HIG +2.5%, PFSI +2.2%, COLM +2.2%, MIME +2.1%, WWE +2%, BYD +1.5%, BECN +1.5%, CVCO +1%, ADNT +0.8%, BMY +0.7%
Other news:
- ORTX +10.5% (Announces Historic Agreement Making Libmeldy Available by NHS England for MLD Patients)
- ACIU +6% (preclinical data on the optimized formulation of its wholly-owned amyloid-beta vaccine program ACI-24 were published in the peer reviewed journal Brain Communications)
- CWT +2.9% (receives state approval to acquire assets of Valencia Mesa)
- NVAX +2.5% (receives provisional approval for NVX-CoV2373 in New Zealand)
- HLIT +1.8% (approves $100 mln share repurchase program)
- AXDX +1.4% (stock offering)
- DOGZ +1.3% (files for $250 mln mixed securities shelf offering)
- TSLA +1.2% (to construct cathode building at Texas Gigafactory according to Reuters)
- BALY +1% (forms special committee to evaluate Standard General acquisition proposal)
Analyst comments:
- GTLB +5.3% (upgraded to Outperform from Sector Perform at RBC Capital Mkts)
- JNCE +5.3% (upgraded to Outperform from Market Perform at Cowen)
- BJ +3.3% (upgraded to Buy from Hold at Deutsche Bank)
Ralph Lauren’s Lifestyle Dream Meets Meta World
The company reset during the pandemic and, with a $217.7 million third-quarter profit and a boosted outlook, is building out its vision.
The dream lives on at Ralph Lauren Corp.
The company posted more than $217 million in third-quarter profits as it moved from reset mode to offense in a world redefined by the pandemic, technology and a new consumer.
But the multicategory lifestyle approach and attitude — which Lauren used to dominate department store retailing years ago — is still defining the brand at wholesale, in its own stores, at e-commerce, on Roblox and beyond.
“We’re not a clothing brand,” Patrice Louvet, president and chief executive officer, told WWD. “We’re closer to Disney than we are to other apparel companies because we’re in the dreams business.”
Louvet said that when he joined the company in 2017, he spent time with Ralph Lauren, executive chairman and chief creative officer, reflecting on exactly what kind of business they were leading.
“We concluded that we were in the dreams business, we’re in the business of creating these worlds that make people dream, that help them aspire to a better life,” Louvet said. “Ralph always says, ‘It’s not about the clothing, it’s not about the fashion, it’s about living.’ So I guess we’re in the dreams business, we’re in the living business.”
Of course, the company is also still very much in the rag trade, making its millions by producing and selling fashion. But this business about dreams is a thread that connects the company with its past and can lead it into a future where young consumers are living even more of their lives online.
“What is the multiverse? It’s an alternative world,” Louvet said.
The brand took to Roblox this holiday, recreating its take on a winter escape on the platform, which has 47 million users, including many Gen Zers. The company has also dipped a digital toe into the online world of ZEPETO.
E-commerce — where the company was one of the pioneers in the late ’90s — has been kind to Lauren, which saw revenues in its digital ecosystem, including online wholesalers, increase more than 40 percent in the third quarter with the two-year increase topping 60 percent.
Lauren’s own e-commerce grew by more than 30 percent in the third quarter.
But the metaversere-ready and digitally obsessed Lauren is just one aspect of the business that is emerging from two years of turmoil (into what will hopefully soon become the post-pandemic landscape).
Louvet has led a years-long effort to raise prices and boost brand profile at the company, which is also continuing its work with celebrities and in sport, outfitting Team USA with the Olympic Opening Ceremony Parade Uniform.
And new retail is back on the agenda.
The company is opening four new full-price North American stores this quarter — in Miami, Chicago, Atlanta and Detroit. That’s more new full-price stores in Lauren’s home market than the firm has added in six years and the start of a new growth phase that will see about a dozen new stores in North America over the next couple years.
The trick, it seems, is to project the dream wide, building a “lifestyle positioning” that helps the brand drive its core offering and build more in other categories, including outerwear.
“We can have one of the hottest restaurants in the U.S., sell gear that is worn at the Olympic opening ceremony, dress celebrities in beautiful evening gowns and tuxedos at the Oscars and offer a full line of products to consumers like you and me,” Louvet said.
The dream can come back to the fore now that Lauren — like many of the stronger companies across fashion — has found its footing during the pandemic, which was characterized by a big rush to a fast-forward transformation that was ultimately finished before COVID-19.
For the third quarter ended Dec. 25, Lauren’s earnings bounced back 82 percent to $217.7 million, or $2.93 a diluted share, from $119.8 million, or $1.61, a year ago, when the pandemic was hitting the consumer world hard. Adjusted earnings of $2.94 came in well ahead of the $2.17 analysts projected.
Revenues increased 26.7 percent to $1.8 billion from $1.4 billion.
Lauren boosted its annual revenues outlook to constant currency growth of 39 percent to 41 percent, up from the 34 percent to 36 percent growth projected in November.
Investors applauded the bullishness, pushing shares of the company up 3.5 percent to $117.68 on Thursday.
Zachary Warring, an equity analyst at CFRA Research, upgraded the firm’s stock to “buy” from “hold” and raised his target price by $15 to $150. The analyst cited the expected return of international travel, strong digital momentum and the company’s continued investment in digital and strategic initiatives.
On top of all the dream building, Louvet told analysts on a conference call that a new apparel cycle started last year and has been gaining momentum.
“It’s still very early innings with many tailwinds ahead because the consumer hasn’t really fully returned to work and certainly hasn’t fully returned to more regular external activities,” the CEO said. “So what we’re seeing on the hybrid approach by consumers is, on the one hand, a replenishment of their core wardrobe, and on the other hand, a gravitation toward newness and sophistication.”
That means shoppers are replenishing their denim and sweaters in the core, while pivoting toward elevated casual styles like cashmere and hoodies and day-time looks for venturing out of the house, like sport coats.
Such is life and style in 2022.
“What we do has always been about living — enjoying every moment from what you wear, to the way you live, to the way you love,” said Ralph Lauren. “And as we enter a new year, filled with hope of more connection and healing as humans and for our planet, I am inspired by how our teams and people around the world are connecting to what we are about — timelessness and an authentic life well-lived.”
Early premarket gappers
- Gapping up:
- SNAP +44.4%, BILL +24.3%, PINS +13.3%, AMZN +11.6%, EGAN +10.4%, U +9.9%, LESL +8.3%, NWSA +6.9%, SKX +6.8%, PCTY +6.6%, SYNA +6.5%, ENVA +5.7%, ORTX +4.8%, PYCR +4.5%, GPRO +4.4%, MWA +3.8%, LGF.A +3.7%, BYD +3.3%, WERN +3.2%, CWT +2.9%, HLIT +2.8%, PENN +2.2%, PFSI +2.2%, COLM +2.2%, TRGP +2%, WWE +2%, NVAX +1.9%, DOGZ +1.6%, BECN +1.5%, AXDX +1.4%, RGA +1.1%, BALY +1%, TSLA +1%, FTNT +1%, CVCO +1%, VTRS +0.8%, VIAV +0.8%
- Gapping down:
- CLX -12.7%, SKYW -8.3%, F -6.2%, NOV -2.8%, DLB -2.7%, SWKS -2.5%, OCFC -1.2%, OTEX -1.1%, APD -1%, COST -0.6%, SNY -0.6%
London’s West End set for ‘uninterrupted’ growth, says Shaftesbury
Commercial landlord’s vacancy rate for estate that includes Carnaby Street falls below 5%
London’s West End has continued to recover despite the emergence of the Omicron coronavirus variant and is set for an extended period of uninterrupted trading, according to a bullish forecast from landlord Shaftesbury.
The vacancy rate on the company’s 16-acre estate, which covers Chinatown, Carnaby Street and Seven Dials, has fallen below 5 per cent for the first time during the pandemic and close to 90 per cent of tenants have paid their rent for the period to December 31, an improvement on previous coronavirus-affected periods.
“This idea that everyone would flee the city centre, that hasn’t come to pass. There are no flats to let. Shops are finding that the costs of being online — paying for deliveries and a website — are going through the roof. Some are deciding they would rather have a busy store on Carnaby Street,” said chief executive Brian Bickell.
Popular with tourists, theatregoers and shoppers, the central London neighbourhood has endured a number of bruising periods during the pandemic, with coronavirus restrictions keeping visitors at home and local businesses struggling to make rent payments.
The emergence of Omicron ahead of the Christmas trading period thinned the crowds who might otherwise have visited but, unlike other strains of the virus, did not completely stifle the West End’s rebound, Shaftesbury said in a trading update on Friday.
“Whilst trading and footfall have been impacted by seven weeks of Omicron restrictions, strong trading prior to the restrictions and the continuation of government support measures have enabled our occupiers to weather this period of disruption,” said Bickell.
“Together with an improving outlook for international leisure and business travel, there is now the prospect of an extended period of uninterrupted trading growth,” he added.
During the first coronavirus lockdown in 2020, the West End fell silent. As many as 180 of the 630 flats on Shaftesbury’s estate were vacated, some by people who fled the country and left their possessions behind, according to Bickell. Empty shop fronts began pockmarking the estate as businesses folded despite government support.
Shaftesbury’s share price fell 50 per cent from February to November 2020, but has since made a partial recovery on the back of a gradual improvement in the West End.
On the last weekend of January this year visitor numbers were higher than at the same time in 2019, said Bickell.
John Cahill, an analyst at Stifel, said a return of international tourists later this year and continued demand from businesses to let space was likely to reverse some of the rental discounts which Shaftesbury introduced to attract tenants back during the pandemic.
>>> Up
* Adyen Raised to Buy at KBC Securities; PT 2,250 euros (+)
* Alphabet Raised to Buy at Phillip Secs; PT $3,493
* Axfood Raised to Hold at Nordea (+)
* Coloplast Raised to Buy at Carnegie; PT 1,100 kroner
* Dassault Systemes Raised to Buy at SocGen; PT 48 euros (+)
* Endesa Raised to Buy at Citi (+)
* Hexagon Raised to Buy at Handelsbanken; PT 147 kronor
* Nordic Semiconductor Raised to Buy at Pareto Securities
* Ralph Lauren PT Raised to $156 from $141 at Truist Secs
* Rational Raised to Hold at HSBC; PT 760 euros
* S4 Capital Raised to Buy at HSBC; PT 760 pence
* Saras Raised to Overweight at Barclays; PT 90 euro cents
* Simcorp Raised to Buy at ABG; PT 760.04 kroner
* Tomra Raised to Hold at Pareto Securities; PT 450 kroner (+)
* Tullow Raised to Overweight at Barclays; PT 75 pence
>>> Down
* Bavarian Nordic Cut to Market Perform at Cowen
* Boliden Cut to Hold at Handelsbanken; PT 410 kronor
* Bpost Cut to Hold at ING; PT 7 euros (+)
* DEFAMA AG Cut to Hold at SRC Research; PT 29 euros
* EnQuest Cut to Equal-Weight at Barclays; PT 25 pence
* Ferrari Cut to Hold at Bestinver; PT $240.53 (+)
* Holcim Cut to Sell at Berenberg
* Mercialys Cut to Neutral at Goldman; PT 10.40 euros
* Meta Platforms Cut to Hold at China Renaissance; PT $280
* Meta Platforms Cut to Sell at DZ Bank; PT $225 (+)
* Protector Forsikring Cut to Hold at Pareto Securities
* Siemens Gamesa Cut to Underweight at Morgan Stanley; PT 16 euros
* Siemens Energy Cut to Equal-Weight at Morgan Stanley
* Suominen Cut to Reduce at Inderes; PT 4.50 euros
* Swedbank Cut to Hold at SEB Equities; PT 190 kronor
>>> Initiation
* Bango Rated New Buy at Berenberg; PT 300 pence
* CT Automotive Group Rated New Buy at Liberum; PT 235 pence (+)
* flatexDEGIRO Rated New Outperform at Exane; PT 29 euros
* Henkel Reinstated Neutral at Credit Suisse; PT 80 euros
* Mercedes-Benz Group Resumed Buy at Citi (+)
* Salmon Evolution Rated New Buy at Nordea; PT 13 kroner (+)
* Shell ADRs Rated New Buy at TD; PT $62
* Shell Rated New Outperform at RBC; PT 2,700 pence
>>> Call
* Carrefour PT Upped at Jefferies Amid Possibility of Auchan Offer
- BE Semiconductor (BSI TH) +2.9%
- Nordic Semiconductor (N0S TH) +2.3%
- Nibe (NJB TH) +2.3%
- TUI (TUI1 TH) +2.3%
- HelloFresh (HFG TH) +2.2%
- Delivery Hero (DHER TH) +2.1%
- Adyen (1N8 TH) +2%
- Amazon Soars on Prime Price Hike, Huge Profit Beat on Cloud (2)
- AUTO1 (AG1 TH) +2%
- BP (BPE5 TH) +1.6%
- Brent Hovers Near $90 a Barrel as Demand Grows, OPEC+ Struggles
- Siemens Energy (ENR TH) -0.5%
- Siemens Energy Cut to Equal-Weight at Morgan Stanley
- Siemens Gamesa (GTQ1 TH) -0.6%
- Renault (RNL TH) -0.8%
- Nokia (NOA3 TH) -0.9%
- Ferrari (2FE TH) -1.1%
- Telefonica (TNE5 TH) -1.2%
- No Upside to Telefonica’s Last Chance Saloon Credit Ratings
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