-
AMS (DQW1 TH) +6.5%
- Ams Disputes Reports Austrian Authorities Are Investigating Management
- Carnival Plc (POH1 TH) +4.6%
-
Lufthansa (LHA TH) +3.8%
- Air France-KLM to Get $3.8 Billion in Aid From the Netherlands
-
Nokia (NOA3 TH) +3.7%
- CNET: Singapore chooses Nokia, Ericcson over Huawei to build core 5G network
- IAG (INR TH) +2.8%
- Sartorius Stedim (56S1 TH) +2.4%
- Worldline (WO6 TH) +2.3%
- Thyssenkrupp (TKA TH) +2.3%
- BP (BPE5 TH) +2%
- Bayer (BAYN TH) +1.8%
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ASML (ASME TH) -0.3%
- Covid-19 ‘New Normal’ Nods to Tech Earnings, Even at 26x P/E
- Bechtle (BC8 TH) -0.3%
- Adidas (ADS TH) -0.6%
- Watch European Sportswear Stocks After Nike Earnings Disappoint
- Coloplast (CBHD TH) -0.8%
- Delivery Hero (DHER TH) -0.9%
- TOMRA (TMR TH) -0.9%
- TeamViewer (1UD TH) -1%
- Galapagos (GXE TH) -1.4%
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Puma (PUM TH) -1.5%
- Watch European Sportswear Stocks After Nike Earnings Disappoint
-
Wirecard (WDI TH) -23%
- Wirecard Auditors Say ‘Elaborate’ Fraud Led to Missing Billions
Nike ecommerce gains fail to make up for pandemic fallout
Global revenues for fourth quarter drop 38% due to physical store closures
Nike said sales lost due to widespread physical store closures during the coronavirus pandemic were not offset by gains in its ecommerce business, underscoring the sportswear maker’s reliance on bricks-and-mortar retail as it takes new steps to expand online and direct sales.
About 90 per cent of Nike-owned stores in the Americas, Europe and Asia-Pacific were closed for roughly eight weeks during the company’s most recent quarter due to virus-imposed lockdowns. Sales declines were further hampered by similar closures at Nike’s wholesale partners, the company said.
Many of those Nike-owned stores have since begun to reopen, including about 85 per cent of those in North America, the company’s largest single market by revenues.
John Donahoe, the company’s chief executive since January, said that during the pandemic, Nike digital sales rose to 30 per cent of overall revenues, reflecting a shift in consumer behaviour. He expected digital to reach 50 per cent of Nike revenues “in the foreseeable future”.
Global revenues for the fiscal fourth quarter plummeted 38 per cent to $6.3bn as Nike swung to a loss of $790m for the period, from a profit of $989m a year ago. Nike shares, which are flat year to date, fell 3.8 per cent to $97.60 in after-hours trading on Thursday.
Mr Donahoe said Nike would continue to invest in its digital sales segment, which rose 75 per cent during the three months ended May. New membership registrations among Nike apps more than doubled to 25 million during the period, half of which belonged to women.
The world’s largest sports footwear and apparel maker has put direct-to-consumer and online sales at the forefront of its retail strategy in recent years, with the appointment of Mr Donahoe — a former eBay and Service Now executive — the strongest indicator yet of that commitment.
Nike traditionally made the bulk of its sales through wholesale agreements with retailers such as Macy’s, Dick’s Sporting Goods and other bricks-and-mortar businesses. In 2015 it announced plans to double its direct sales to consumers to $16bn by this year, in part by revamping a suite of smartphone apps and launching desirable products, such as self-lacing shoes, exclusively through its own channels. As of the end of the 2020 financial year, they were $12.4bn.
Moving forward, Mr Donahoe said Nike would take several steps to improve its owned retail sales, including opening between 150 and 200 stores in North America and Europe this year. Some facilities, such as its distribution warehouse in Memphis, have already been converted from primarily wholesale to direct to consumer logistics centres.
The company also plans to streamline its men’s, women’s and children’s product segments to help it respond more nimbly to consumer demand.
In an email to employees, Mr Donahoe said Nike would initiate job cuts from next month but did not specify how many employees would be affected or which departments, according to a person familiar with the matter. A virtual, company-wide meeting to discuss the restructuring is scheduled for Tuesday.
A Nike spokesman did not immediately respond to a request for comment.
On a call with analysts on Thursday, Nike chief financial officer Matt Friend said he expected revenues to be below previous-year levels for the rest of 2020, picking up in the first half of 2021. Inventories are expected to stabilise during Nike’s fiscal second quarter, after rising 31 per cent through the year ended in May.
In China, where effects of the pandemic were first felt, Nike said all of its owned stores have since reopened and sales have returned to growth. Revenues in the region fell 3 per cent for the latest quarter, compared with declines of 46 per cent each in both North America and Europe, the Middle East and Africa.
In recent weeks, Nike has been at the forefront of discussions around systemic racism and police brutality, thanks to its advertising campaign in 2018 featuring football star-turned-activist Colin Kaepernick.
Mr Donahoe opened remarks to analysts on Thursday by saying the company is uniting behind its black athletes and community. In a letter to employees earlier this month, reviewed by the Financial Times, he wrote that many at the company “have felt a disconnect between our external brand and your internal experience”, based on recent conversations with staff.
“You have told me that we have not consistently supported, recognised and celebrated our own black teammates in a manner they deserve,” he continued. “This needs to change.”
DAX:
- Bayer (BAYN TH) +2.2%
- After Roundup Battle, Bayer CEO’s Next Task Is Keeping His Job
- Daimler (DAI TH) +1.6%
- Glass Lewis Recommends Abstaining From Daimler AGM Vote: WiWo
- Infineon (IFX TH) +1.3%
- BASF (BAS TH) +1.1%
- Fresenius SE (FRE TH) +1.1%
- RWE (RWE TH) +0.4%
- Deutsche Telekom (DTE TH) +0.3%
- E.On (EOAN TH) +0.3%
- Adidas (ADS TH) -0.4%
- Watch European Sportswear Stocks After Nike Earnings Disappoint
- Wirecard (WDI TH) -26%
- Wirecard Auditors Say ‘Elaborate’ Fraud Led to Missing Billions
MDAX:
- Lufthansa (LHA TH) +4.3%
- Air France-KLM to Get $3.8 Billion in Aid From the Netherlands
- Thyssenkrupp (TKA TH) +3%
- Covenant Review Slams Aggressive Thyssenkrupp Elevator Covenants
- Fraport (FRA TH) +2.6%
- Fraport Cut to Reduce at Commerzbank; PT 29 euros
- Aroundtown (AT1 TH) +2.4%
- Commerzbank (CBK TH) +1.9%
- Wirecard Raced to Win Funds in Months Leading Up toInsolvency
- Evotec SE (EVT TH) +1%
- Metro AG (B4B TH) +0.4%
- HelloFresh (HFG TH) +0.4%
- Varta (VAR1 TH) +0.3%
- Puma (PUM TH) -1.5%
- Watch European Sportswear Stocks After Nike Earnings Disappoint
SDAX:
- Kloeckner (KCO TH) +4.8%
- Hornbach Holding (HBH TH) +4.6%
- Hornbach Holding First Quarter Ebit EU173.4 Mln, +79% Y/y
- Fielmann (FIE TH) +2.4%
- SAF-Holland SE (SFQ TH) +2.4%
- Aixtron (AIXA TH) +2.1%
- Deutz (DEZ TH) +1.3%
- Steinhoff (SNH TH) +1%
- DMG Mori AG (GIL TH) +0.9%
- Deutsche PBB (PBB TH) +0.2%
- Indus Holding (INH TH) -1.7%
>>> Up
* Banca Farmafactoring Raised to Overweight at Morgan Stanley
* Bunzl Raised to Overweight at JPMorgan; PT 2,350 pence
* Finnair Raised to Hold at HSBC; PT 65 euro cents
* Rentokil Raised to Overweight at JPMorgan; PT 560 pence
* Rotork Raised to Outperform at Exane; PT 320 pence
* SKF Raised to Buy at SEB Equities; PT 202 kronor
* Societa Cattolica Raised to Hold at SocGen; PT 5 euros
>>> Down
* Airbus Cut to Market Perform at Bernstein; PT 69 euros
* Boeing Cut to Market Perform at Bernstein; PT $165
* ConvaTec Cut to Add at Peel Hunt; PT 225 pence
* Crest Nicholson Cut to Hold at Jefferies; PT 226 pence
* EDP Cut to Hold at HSBC; PT 4.40 euros
* Enel Cut to Hold at HSBC; PT 8 euros
* Fraport Cut to Reduce at Commerzbank; PT 29 euros
* Iberdrola Cut to Hold at HSBC; PT 11.30 euros
* Safestore Cut to Hold at Berenberg; PT 750 pence
>>> Initiation
* Hermes International Rated New Neutral at Citi; PT 785 euros
* InterContinental Hotels Rated New Buy at Peel Hunt
* Intermediate Capital Rated New Add at Peel Hunt; PT 1,456 pence
* Vetoquinol Rated New Buy at MainFirst; PT 77 euros
* Virbac Rated New Hold at MainFirst; PT 200 euros
>>> Call
* Crest Nicholson Cut, Still Value in Housebuilders: Jefferies
* InterContinental is a Global Leader in Hotels, Peel Hunt Says
* Genfit, Puma Fall After BofA Initiates with Underperform Rating
* Safestore Growth to Become More Muted, Cut to Hold: Berenberg
Asian stocks climbed Friday along with equity futures in Europe and the U.S. as investors weighed the prospects for additional stimulus against the spike in American virus cases.
Shares rose in Japan and South Korea, on below average volumes. Australia also saw gains, while Hong Kong reopened to modest declines following Thursday’s holiday. China was closed. S&P 500 futures edged higher after a rally in the final hour of a choppy session left the index up about 1%. Treasuries were steady, while South Korea’s won lead most emerging-market currencies higher.
US After Hours Banks are generally lower on stress test results as Fed seeks to limit dividends/buybacks; NKE falls on big earnings miss; SNX up big on earnings
Nikkei +1.23% Hang Seng -0.60% CSI +0.42% Shanghai +0.30% Shenzen +0.01%
Eur$ 1.1221 CNH 7.0806 CNY 7.0782 JPY 107.06 GBP 1.2430 RUB 69.0565 WTI$ 39.27 +1.42%
S&P +0.03% Nasdaq +0.04% EuroStoxx +0.93% FTSE +0.95% Dax +0.82% SMI
Macro :
- *GERMANY WEIGHS MEASURES AGAINST U.S. OVER NORD STREAM SANCTIONS
- Switzerland to Submit EU Framework Proposals After Sept.: NZZ
Keep an eye on :
- ADS GY : Watch European Sportswear Stocks After Nike Earnings Disappoint
- AF FP : France, Netherlands Agree on EU3.4b Aid Package to KLM: Reuters
- AF FP : Omnicom Wins Air France Advertising Budget, Le Figaro Reports
- ALM SM : Almirall Sells Ansiolin to Neuraxpharm’s Italian Unit
- AMS SW : AMS Isn’t Aware of Any Trading Probe Against Current Employee
- AV/ LN : Manulife Is Said to Lead Bidding for Aviva Vietnam Insurer Unit
- BATS LN : BAT South Africa Says Hearing on Tobacco Ban Set for June 30
- BAYN GY : Bayer Isn’t Out of the Roundup Woods as 30,000 Claims Remain
- BO DC : Sparkle Roll Subscribes 9.37 Mln B&O Rights Shares to Keep Stake
- IAG LN : British Air Proposes Pay Cut for Attendants to Limit Job Losses
- BUSER SS : Bambuser Offering Prices 54.7m Shares at SEK5.30/Share
- COPN SW : Cosmo: Positive CHMP Opinion for Methilthioninium Chloride Cosmo
- CSGN SW : Credit Suisse U.S. Unit 2020 Capital Plan Passed by Fed
- DAI GY : Glass Lewis Recommends Abstaining From Daimler AGM Vote: WiWo
- EQNR NO : Ex-Equinor CEO Lund Says Oil Industry Overspent on U.S. Shale
- ALFOC FP : Focus Home Interactive Buys Deck13 Interactive for EU7.1m
- HBH GY : Hornbach Holding First Quarter Ebit EU173.4 Mln, +79% Y/y
- INSR NO : Insr Insurance Offering Prices 14.8m Shares at NOK3.75/Share
- INTU LN : British Land in Talks to Manage Intu Shopping Mall, React Says
- LSE LN : Italy Weighs New ‘Golden Power’ Use for Borsa Italiana: Sole
- LHA GY : Lufthansa Wins Shareholder Backing for $10 Billion Bailout Deal
- MOLN SW : FDA Finds ‘Unfavorable’ Risk Ratio in Abicipar Pegol Treatment
- NDX1 GY : Nordex to Build Concrete Towers Plant in Spain, Create ~300 Jobs
- NOVN SW : *NOVARTIS UNITS PAY $347 MILLION TO RESOLVE U.S. BRIBERY PROBE
- RCN LN : Ex-Redcentric Bosses Face Prosecution After FCA Probe: Sky News
- RNO FP : French Car Revival Takes Hold as June Sales Seen Close to Normal
- RIB GY : RIB Software Sees Full Year Oper Ebitda EU55 Mln to EU75 Mln
- SAABB SS : Saab Confirms Vricon Share Divestment, Prel. Capital Gain SEK1b
- SAS SS : SAS Lays Off 560 Pilots in Scandinavia, SVT Reports
- SK FP : SEB Lowers Estimate for Lost 2Q Rev., Sees Positive Oper. Result
- SOW GY : Fidelity Funds Sicav Raises Software AG Voting Rights to 5.03%
- TEP LN : Telecom Plus Holders to Offer Shares
- VIV FP : Omnicom Wins Air France Advertising Budget, Le Figaro Reports
- VOW3 GY : U.K. Car Output Drops 95% in May, Spurring Cry for Help
- WDI GY : *VISA, MASTERCARD WEIGH CUTTING TIES WITH WIRECARD AFTER SCANDAL
- WDI GY : Wirecard Auditors Say ‘Elaborate’ Fraud Led to Missing Billions
- WDI GY : EU to Call for Probe Into Germany’s BaFin Over Wirecard, FT Says
- WDI GY : Wirecard Adds to Roster of Short Sellers’ Victories in Europe
- WDI GY : Chris Hohn Earned $200 Million From Shorting Wirecard Stock: HB
- ROSE SW : Zur Rose Buys Mail-Order, Diabetes Activities of Apotal
After Hours Summary: Banks are generally lower on stress test results as Fed seeks to limit dividends/buybacks; NKE falls on big earnings miss; SNX up big on earningsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: CAMP +14.5%, SNX +6.8%, PRGS +3.7%
Companies trading higher in after hours in reaction to news: VXRT +23.2% (extends big move during Thursday's session), ALT +22.1% (Venrock Healthcare Capital discloses 20.8% stake in ALT), SITC +8.9% (to join S&P SmallCap 600), SPCE +5.6% (completes second SpaceShipTwo test flight from Spaceport America), CLLS +2.4% (publishes streamlined manufacturing method for CAR T-cells)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: NKE -3.6%
Companies trading lower in after hours in reaction to news: SOLY -15.6% (stock offering), FRG -3.9% (announces 3.5 mln share offering), CYH -2.7% (to sell Florida hospital), USB -2.3% (releases stress test results), DHT -1.9% (files for $850 mln mixed securities shelf offering; also files for offering by selling shareholder), GPI -1.8% (provides Q2 operational update; US operating profits are improving faster than anticipated), FB -1.3% (CNBC reporting that VZ will pull ads from FB until FB comes up with solution)
Banks were generally lower on stress test results as Fed says will limit dividends and buybacks at large banks in Q3 due to pandemic.
Movers include: GS -4.1%, WFC -3.6%, BAC -2.5%, USB -2.7%, FITB -2.6%, RF -2.2%, JPM -1.9%, CMA -1.8%, COF -1.6%, PNC -1.4%, AXP -1%; however a few are higher: MS +1.4%, DB +0.4%
EU competition chief urges more cross-border M&A
Margrethe Vestager calls for pan-European consolidation, especially in telecoms sector
The EU’s competition chief has urged European companies to pursue more cross-border takeovers inside the bloc to ward off predatory foreign buyers, emphasising in particular the potential for consolidation in the telecoms markets.
Margrethe Vestager, who is serving a second term as competition commissioner, blocked two major mobile telecoms mergers in Denmark and the UK during her first term which deterred companies from pursuing in-market consolidation in the sector.
However, speaking to the Financial Times during a panel discussion at a trade conference, Ms Vestager said: “In a single market we would not consider [it] to be controversial if European businesses consolidate. In some sectors there is indeed room for cross-border consolidation, the telco sector in particular, because here we still have very national markets.”
She added that “it would be good to have more pan-European players. We also have a few big ones like they have in the US. Instead of only thinking about consolidating within the national market then [we can have] a more pan-European approach. We have seen a few mergers in that direction, but not many.”
Ms Vestager’s remarks come less than a month after the General Court in Luxembourg dealt a blow to the commission by annulling its decision to block the £10.25 sale of O2 to Three in 2016. That ruling, which is likely to be appealed, has been welcomed as a potential catalyst for a consolidation frenzy.
Ms Vestager has indicated to telecoms companies in recent weeks that she would welcome more cross-border deals. Mike Fries, chief executive of Liberty Global, which has been one of the most active traders of telecoms assets in Europe over the past decade, told an investor call last week that Ms Vestager had indicated that she would like to see more cross-border deals in Europe during a conference with telecoms executives.
In April, Ms Vestager encouraged European nations to buy stakes in national companies in the wake of steep drops in market value that left companies vulnerable to bids from overseas players.
Her comments are an acknowledgment that companies across the continent are particularly vulnerable to opportunistic buyers from the US and China due to the crisis.
Deal flow in the telecoms sector has picked up since 2018 as cable and mobile networks have combined, including Vodafone’s takeover of Unitymedia in Germany and O2’s merger with Virgin Media in the UK. Some cross-border transactions, such as Telenor’s takeover of Finland’s DNA, have also taken place.
The court’s ruling has led to expectations in sectors including telecoms of a revival of mergers. Advisers to some of the largest telecom companies in Europe now expect a flurry of transactions, particularly in markets where there are still four mobile operators.
José María Álvarez-Pallete, chairman and chief executive of Telefónica, said he looked forward to greater consolidation in the fragmented European market following the European court’s ruling. In an interview with the FT this week, he said: “Something is changing in Europe . . . The stars are aligning for telecoms consolidation.”