Consumer
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News and Views
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Macro/Technicals
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Sector News, M&A, Capital Raises
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Research Away
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Top Events/Earnings Calendar
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Cantor Flows
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News and Views
Consumer Discretionary outperformed Staples on the day and for the week. Consumer Discretionary was on fire for the week after being oversold with the help of macro data and better than expected Same Store Sales numbers. The strongest performance was seen in Home Furnishing related stocks such as ETH, KIRK, PIR, WSM, TUES and BBBY.
Macro/Technicals
SPX: 1104.51; +1.32%RLX: 425.89; +1.26%
RTH: 92.32; +1.04%
XLY: 32.28; +1.48%
XLP: 27.29; +.63%
VIX: 21.31; -8.11%
Leaders: HRB, BONT, HAR, SFN, BPI, RHI, MAN, MWW, OMX
Laggards: KAD, BTH, JAH, DG, FDO, DLM
Sector News, M&A, Capital Raises
APP American Apparel in talks with restructuring firm
G Genpact renews contract with ICBC Leasing; financial details weren't disclosed ($15.00). G recently announced in Beijing that it had reached an agreement with ICBC Leasing Co., Ltd., a wholly-owned subsidiary of Industrial and Commercial Bank of China, to extend a two-year contract signed in 2008 for six months so as to further strengthen development of ICBC Leasing's financial and IT facilities.
- In the renewed contract, Genpact will focus on improving previous tasks and developing new functionalities to further strengthen the construction of an information platform for ICBC Leasing's financial system and develop a cutting-edge, Oracle-based operations management system.
KO Coca-Cola suggests Chinese distribution-and-manufacturing model for Indian franchisee bottlers - Economic Times ($57.56). Sources with direct knowledge of the development say the new arrangement would mainly be for non-carbonated drinks. Bottlers would pool their investments and manufacturing capacities; the company's bottling arm will continue to act independently. A company source calls the move a "long-term initiative" unlikely to be implemented immediately.
MAN Manpower employment survey shows US employers anticipate slight gain in employment levels for Q4 ($48.72). Survey data reveals a seasonally adjusted outlook of +5% for Q4, up from year-ago -1% and stable compared to Q3. Of the 18K employers surveyed, 15% anticipate an increase in staff levels in Q4 hiring plans, while 11% expect a decrease in payrolls.
TSN Tyson Foods moves away from machinery to increase profit - WSJ ($16.21). In an interview, CEO Donnie Smith says an over-reliance on mechanical deboning of chickens was giving the company an uncompetitive yield on breast meat. Tyson has moved back to hand-deboning, improving its yield and bottom-line numbers as a result.
ULTA Ulta Salon enters credit agreement ($26.30). The facility provides maximum borrowings equal to the lesser of $200M or a percentage of eligible owned inventory, and contains a $10M subfacility for letters of credit. The agreement contains a restrictive financial covenant requiring Ulta to maintain tangible net worth of not less than $200M. Substantially all of Ulta’s assets are pledged as collateral for outstanding borrowings under the new facility.
Research Away
CPB ($36.21) Campbell Soup downgraded to neutral from buy at Janney Capital Target is $37. The firm notes management's focus on acqusitions and also doesn't see a large recovery in soup this season.
ESI, CECO, and EDMC downgraded; UTI upgraded at Bank of America Merrill Lynch
Top Events/Earnings Calendar
Barclays Capital Back to School Conference
Boston, InterContinental
09:00am DF
09:45am DLM
10:30am CHD, PM
11:15am AVP
1:30pm COT, MJN
2:15pm
IFF
3:00pm JAH
3:45pm MKC
Earnings
PRE: CASY
POST: PBY, PVH
Cantor Flows
Consumer Staples: CCE, CPB, GMCR, JJSF
Consumer Discretionary: BLOKA, BLOKB, CHS, ICON, MNRO, SYY
Consumer Services: COCO, FAST, LANC