>>> Campbell Soup misses by $0.05, reports revs in-line; lowers FY18 EPS outlook

Campbell Soup misses by $0.05, reports revs in-line; lowers FY18 EPS outlook, reaffirms FY18 revs guidance
  • Reports Q1 (Oct) earnings of $0.92 per share, excluding non-recurring items, $0.05 worse than the Capital IQ Consensus of $0.97; revenues fell 1.9% year/year to $2.16 bln vs the $2.17 bln Capital IQ Consensus.
  • "This was a difficult quarter, particularly for our U.S. soup business. The operating environment remains volatile with a rapidly evolving retailer landscape and competitive activity pressuring the top line. Our bottom line performance was negatively impacted by a lower adjusted gross margin rate due in part to cost inflation, higher carrot costs and escalating transportation and logistics costs following the hurricane season...The two percent decline in organic sales was largely due to the performance of our Americas Simple Meals and Beverages division, where U.S. soup sales declined by 9 percent. Consumer takeaway decreased 2 percent in U.S. soup while significantly lower retailer inventory accounted for the remaining decline. The sales decline was the result of one key customer's different promotional approach to the soup category for fiscal 2018, as we described last quarter. Importantly, our soup program was well received in most of our other key customers, where consumer takeaway of our soup was up slightly."
  • Gross margin decreased from 38.6 percent to 36.2 percent. Excluding items impacting comparability in the current year, adjusted gross margin decreased 2.1 percentage points to 36.5 percent. The decrease in adjusted gross margin was primarily driven by cost inflation and higher supply chain costs, as well as unfavorable mix, partly offset by productivity improvements and the benefits from cost savings initiatives.
  • EBIT decreased 10 percent to $412 million. Excluding items impacting comparability, adjusted EBIT decreased 14 percent to $417 million, reflecting a lower adjusted gross margin, lower sales and higher adjusted administrative expenses, partly offset by lower marketing and selling expenses.
  • Co issues guidance for FY18, sees EPS of $2.95-3.02 (Prior $3.04-3.11), excluding non-recurring items, vs. $3.05 Capital IQ Consensus Estimate; sees FY18 revs of $7.73-7.89 bln (Down 2% to flat) vs. $7.88 bln Capital IQ Consensus Estimate.
    • The change in guidance for adjusted EBIT and adjusted EPS is due primarily to Campbell's gross margin performance in the first-quarter and revised outlook for the balance of the fiscal year.

>>> Burlington Stores beats by $0.04, reports revs in-line with preannouncement;

Burlington Stores beats by $0.04, reports revs in-line with preannouncement; guides Q4 EPS and rev just below consensus

Reports Q3 (Oct) earnings of $0.70 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $0.66 (raised EPS guide to $0.65-0.666 from $0.58-0.61 on Oct 30); revenues rose 7.1% year/year to $1.44 bln vs the $1.44 bln Capital IQ Consensus. This growth was driven by an incremental $60 million from new and non-comparable stores, as well as a 3.1% increase in comparable store sales, in-line with preannouncement and above +2-3% initial guidance. Consistent with the Company's policy regarding weather related incidents, the comparable store sales calculation excludes 19 stores which were closed for 7 or more days within a month during the third quarter. The impact of these store closures, which is reflected in the total sales results for the third quarter, reduced the incremental contribution from new and non-comparable sales by $17 million. Gross margin expanded by 100 basis points over last year's levels to 42.2% driven primarily by increased merchandise margin. In addition, product sourcing costs as a percent of sales were flat on a rate basis to the prior year's quarter. Product sourcing costs are included in selling, general and administrative expenses (SG&A).
Co issues downside guidance for Q4, sees EPS of $2.02-2.06, excluding non-recurring items, vs. $2.10 Capital IQ Consensus Estimate; sees Q4 revs of +11-12% to ~$1.87-1.89 bln vs. $1.9 bln Capital IQ Consensus Estimate.

>>> Medtronic beats by $0.04, reports revs in-line; co reiterates FY guidance

Medtronic beats by $0.04, reports revs in-line; co reiterates FY guidance (78.90)
  • Reports Q2 (Oct) earnings of $1.07 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $1.03; revenues fell 4.0% year/year to $7.05 bln vs the $7.05 bln Capital IQ Consensus.
    • Second quarter U.S. revenue of $3.734 billion represented 53 percent of company revenue and decreased 10 percent as reported, or was flat on a comparable basis.
    • CVG worldwide second quarter revenue of $2.773 billionincreased 7 percent on both a reported and constant currency basis.
    • MITG worldwide second quarter revenue of $1.952 billion decreased 21 percent as reported, or increased 2 percent on a comparable, constant currency basis.
FY Guidance
  • In fiscal year 2018, the company continues to expect diluted non-GAAP EPS growth to be in the range of 9 to 10 percent on a comparable, constant currency basis from the prior year comparable EPS of $4.37.
  • In fiscal year 2018, the company continues to expect comparable, constant currency revenue growth to be in the range of 4 to 5 percent.

>>> Movado Group beats by $0.19, beats on revs; raises FY18 EPS, revs outlook (

Movado Group beats by $0.19, beats on revs; raises FY18 EPS, revs outlook (28.90)
  • Reports Q3 (Oct) earnings of $1.04 per share, excluding non-recurring items, $0.19 better than the Capital IQ Consensus of $0.85; revenues rose 6.0% year/year to $190.69 mln vs the $176.33 mln Capital IQ Consensus.
  • Gross profit was $104.1 million, or 54.6% of sales, compared to $98.6 million, or 54.8% of sales, in the third quarter last year. Adjusted gross profit was $104.7 million, or 54.9% of sales, which primarily excludes $0.6 million of amortization of acquisition accounting adjustments related to the Olivia Burton brand. The increase in adjusted gross margin percentage was primarily the result of a reduction of certain fixed costs due to the cost savings initiatives and favorable changes in foreign currency exchange rates, partially offset by channel and product mix.
  • Given the expanding digital world and the changing retail landscape, the Company has decided to no longer exhibit its brands at the annual Baselworld Watch and Jewelry Fair in Switzerland. The Company plans to reinvest the approximate $10 million of annual savings in other marketing activities, including digital brand-building and sales growth initiatives. As a result of this decision, the Company recorded a pre-tax charge of $6.3 million in the third quarter of fiscal 2018 as part of its cost savings initiatives.
  • Co raises guidance for FY18, sees EPS of $1.70-1.75 (Prior $1.50-1.65), excluding non-recurring items, vs. $1.63 Capital IQ Consensus Estimate; sees FY18 revs of $550-555 mln (Prior $530-545 mln) vs. $539.83 mln Capital IQ Consensus Estimate.

>>> Jacobs beats by $0.16, beats on revs; guides FY18 EPS in-line

Jacobs beats by $0.16, beats on revs; guides FY18 EPS in-line
  • Reports Q4 (Sep) earnings of $0.98 per share, excluding non-recurring items, $0.16 better than the Capital IQ Consensus of $0.82; revenues rose 0.5% year/year to $2.65 bln vs the $2.58 bln Capital IQ Consensus.
  • "I am pleased with the continued momentum and performance in our final quarter of fiscal 2017. Results included sequential revenue growth, a significant increase in backlog, and strong margin performance, all of which were aligned with our strategic initiatives outlined in December of last year. This organic growth momentum combined with the previously announced acquisition of CH2M will further strengthen our position as a global leader in providing innovative solutions to our clients. Importantly, we remain confident that we will close the CH2M transaction before the end of the year."
  • Co issues in-line guidance for FY18, sees EPS of $3.25-3.60, excluding non-recurring items, vs. $3.44 Capital IQ Consensus Estimate.

>>> Brexit Min Davis: Unambiguously in favor of obtaining a Brexit agreement; ha

Brexit Min Davis: Unambiguously in favor of obtaining a Brexit agreement; have made real and tangible progress in talks to date 
- Reiterates that is possible to walk away with no Brexit agreement
- Reiterates view that final financial settlement bill cannot be agreed upon until the 2nd phase of negotiations
- Transition should be on current terms
- Want to sign trade agreement during the transition period

FT : Apple’s iPhone X assembled by illegal student labour

Apple’s iPhone X assembled by illegal student labour
Students say they were ‘forced’ to work at Foxconn plant in China in order to graduate

Apple’s main supplier in Asia has been employing students illegally working overtime to assemble the iPhone X, as it struggles to catch up with demand after production delays.

Six high school students told the Financial Times they routinely work 11-hour days assembling the iPhone X at a factory in Zhengzhou, China, which constitutes illegal overtime for student interns under Chinese law.

The six said they were among a group of 3,000 students from Zhengzhou Urban Rail Transit School sent in September to work at the local facility run by Taiwan-based Apple supplier Hon Hai Precision Industry, better known as Foxconn.

The students, aged 17 to 19, said they were told that a three-month stint at the factory was required “work experience” that they had to complete in order to graduate.

“We are being forced by our school to work here,” said Ms Yang, an 18-year-old student training to be a train attendant who declined to use her first name for fear of punishment. “The work has nothing to do with our studies.” She said she assembled up to 1,200 iPhone X cameras a day.

The school declined to comment.

When contacted about the students’ complaints, Apple and Foxconn acknowledged they had discovered cases of student interns working overtime and said they were taking remedial action. But both companies said the students were working voluntarily.

Apple said an audit has turned up “instances of student interns working overtime at a supplier facility in China”, adding “we’ve confirmed the students worked voluntarily, were compensated and provided benefits, but they should not have been allowed to work overtime”.

Foxconn said that “all work was voluntary and compensated appropriately, [but] the interns did work overtime in violation of our policy” prohibiting student interns working more than 40 hours a week.

The launch of the anniversary iPhone X was marred by production issues and was delayed to November from Apple’s typical September release date. The weeks of idle capacity caused Foxconn's quarterly profit to drop 39 per cent.

According to a long-time Foxconn employee, the Zhengzhou factory hires students every year during the busy season between August and December. Such hiring can swell numbers at the plant from a base of 100,000 to more than 300,000 workers producing up to 20,000 iPhones a day, the employee said.

But this year, the need for seasonal workers was greater, the employee added.

“The purchasing practices of Apple and others are designed to cut costs, and do things ‘just in time’,” said Jenny Chan, assistant professor at the Hong Kong Polytechnic University. “This leads to the use of student labourers who can be flexibly hired.”

Foxconn said its internship program was “carried out in co-operation with local governments and a number of vocational schools in China”.

The education ministry of Henan, where Zhengzhou is the capital, issued notices to all vocational schools in the central Chinese province to send their “work experience students” to Foxconn, according to a person who saw the notice.

Students also came from the nearby cities of Kaifeng, Nanyang, and Xinxiang, according to a Foxconn employee working on the iPhone X.

The education ministry could not be reached for comment.

Providing flexible student labour is one of the preferential policies the Henan government offers Foxconn in order to keep it there.

“Henan province does everything in its power to make sure Foxconn thrives here. It’s not just about tax revenues — it’s about industrial upgrading, building an export industry, having a foreign partnership [with Apple],” said a local official.

>>> Lowe's beats by $0.02, beats on revs; reaffirms FY18 EPS guidance, revs guid

Lowe's beats by $0.02, beats on revs; reaffirms FY18 EPS guidance, revs guidance

Reports Q3 (Oct) earnings of $1.05 per share, $0.02 better than the Capital IQ Consensus of $1.03; revenues rose 6.6% year/year to $16.77 bln vs the $16.59 bln Capital IQ Consensus.
Comparable sales increased 5.7%. Hurricane-related sales in the quarter were ~$200 million.
Comparable sales for the U.S. home improvement business increased 5.1% for the third quarter and 3.9% for the nine-month period.
Co reaffirms guidance for FY18, sees EPS of $4.20-4.30 vs. $4.50 Capital IQ Consensus Estimate; sees FY18 revs of +5% to $68.27 bln vs. $68.39 bln Capital IQ Consensus Estimate.
Comparable sales are expected to increase ~3.5%
The company expects to add ~25 home improvement and hardware stores.