Ralph Lauren posts bigger-than-expected loss as lockdowns hammer sales

(Reuters) – Ralph Lauren Corp (RL.N) posted a bigger-than-expected quarterly loss on Wednesday as stores across the world that sell its jackets, coats and Polo shirts were forced to close due to the COVID-19 pandemic.

Shares of the New York-based company, which have fallen over 30% so far this year, fell 2.5% in premarket trading.

Fashion capitals in Italy, France and the United States halted business activity through much of March and April to help curb the spread of the virus, hammering sales of luxury goods companies.

While nearly half of Ralph Lauren’s stores in North America are now open, demand for clothing from high-end fashion companies is not expected to rebound quickly as the global economy enters a deep recession.

Ralph Lauren said it expects its fiscal 2021 results to also be significantly hit by the health crisis.

Net revenue fell 15.4% to $1.27 billion in the fourth quarter ended March 28, but was slightly above analysts’ average estimate of $1.22 billion, according to IBES data from Refinitiv.

The company reported a net loss of $249 million, or $3.38 per share compared with a profit of $31.6 million, or 39 cents per share, a year earlier.

Excluding certain items, it lost 68 cents per share, while analysts were expecting a loss of 40 cents.

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Kohl's quarterly net sales slump nearly 44%

(Reuters) – Kohl’s Corp (KSS.N) reported a nearly 44% slump in quarterly net sales on Tuesday, as the department store chain’s stores remained shut for most of the first quarter due to the COVID-19 lockdowns.

Net sales fell to $2.16 billion from $3.82 billion a year earlier.

For the quarter ended May 2, the company reported net loss of $541 million, or $3.50 per share, compared with a profit of $62 million, or 38 cents per share, a year earlier.

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Under Armour's quarterly revenue tumbles 23% amid health crisis

(Reuters) – Athletic apparel maker Under Armour Inc (UA.N) (UAA.N) on Monday reported a 22.8% fall in quarterly revenue, as several retailers across the world remained shut due to the COVID-19 pandemic.

The company reported a net loss of $589.7 million, or $1.3 per share, in the first quarter ended March 31, compared with a profit of $22.5 million, or 5 cents per share, a year earlier.

Net revenue fell to $930.2 million from $1.20 billion.

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GM sets May 18 North American restart as profit tops estimates

DETROIT (Reuters) – General Motors Co (GM.N) on Wednesday outlined plans for a May 18 restart of most of its North American plants shut down by the coronavirus pandemic as it reported a stronger than expected quarterly profit, sending its shares up 7.8% in premarket trading.

The No. 1 U.S. automaker had previously suspended its 2020 profit outlook because of uncertainty over the outbreak and did not provide an update on Wednesday.

“With the level of uncertainty out there, it’s too early to tell until the economy starts to open up,” Chief Financial Officer Dhivya Suryadevara told reporters.

But she said that “the second quarter will be the hardest hit” with North American production shuttered for much of the period. She said the coronavirus pandemic had reduced the automaker’s first-quarter profit by $1.4 billion.

The Detroit automaker has slashed costs and made other moves during the COVID-19 outbreak, including suspending its dividend and share buybacks, closing its Maven car-sharing unit, delaying work on some product programs, reducing marketing budgets and cutting white-collar workers’ salaries. It also added $16 billion to its cash position by drawing down credit lines.

GM said ended the first quarter with $33.4 billion in automotive cash, including an approximately $16 billion drawdown

from its revolving credit facilities.

One ray of hope has been China, where the pandemic began but where GM has resumed production. While first-quarter sales there fell 43%, they rebounded to grow by double digits in April. That offers hope for the U.S. market, where sales declined 7% in the first quarter.

“We’re certainly seeing green shoots in China,” CFO Suryadevara said. “Production has completely restarted and the dealers are seeing increased traffic; sales are improving.”

In the U.S. market, the bright spot is pickup trucks.

GM CFO Suryadevara said that prior to March the truck segment accounted for 13%-14% of total vehicle sales, which jumped to 18% in March and an estimated 21% in April.

“Obviously, truck is our strong suit,” she said. “That’s something we’re going to capitalize as we restart.”

U.S. automotive production ground to a halt in March as the number of COVID-19 infections grew rapidly. But with President Donald Trump pushing for Americans to get back to work and several U.S. states reopening their economies, the focus in the auto sector has shifted to when production can safely restart.

GM, Ford and Fiat Chrysler Automobiles NV (FCA) (FCHA.MI)(FCAU.N) are aiming to resume production some time in May and are negotiating with the United Auto Workers (UAW) union, which represents their U.S. hourly workers, about when and how to safely restart.

ON Tuesday, the United Auto Workers union, which represents GM’s U.S. hourly workers in its plants, gave its tacit approval for the Detroit automakers to restart production on May 18.

FCA said on Tuesday it expects most of its North American plants to reopen by May 18. Ford has not announced a restart date.

In its restart playbook, GM’s strategy relies heavily on social distancing, temperature checks, regular sanitizing, improved plant ventilation and use of personal protective equipment.

Michigan Governor Gretchen Whitmer previously extended the state’s stay-at-home order through May 15 but lifted restrictions for some businesses other than manufacturing. Neighboring Ohio allowed manufacturing to resume on Monday.

Once production resumes, the question will be how fast U.S. demand rebounds, with some dealers expecting big discounts to lure consumers back to showroom floors.

Some industry officials have said some level of government stimulus for the U.S. auto sector will be needed for consumers once the pandemic recedes.

During the Great Recession of 2008-09, the U.S. government rolled out a “cash for clunkers” program, which offered consumers rebates of up to $4,500 to trade in older gas guzzlers.

GM posted net income attributable to common stockholders of $247 million or 17 cents per share, down more than 88% from $2.12 billion or $1.48 per share in the same period in 2019. Excluding one-time items, GM reported 62 cents per share, well above the 30 cents per share expected by Wall Street analysts.

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Tyson faces safety costs, sales hit from coronavirus

(Reuters) – Tyson Foods Inc said on Monday it would temporarily close plants as needed in the battle with the coronavirus outbreak and expects meat sales to fall in the second half of this year as shutdowns hammer restaurants and other food outlets.

Shares of the Jimmy Dean sausages maker, one of the world’s biggest meat processors and a key cog in the food supply chain, fell 7% in premarket trading.

Tyson said demand from retailers for its beef, pork and poultry products had jumped in recent weeks but was not enough to offset the loss in sales to restaurants and caterers hit by strict lockdown measure to control the spread of the virus.

The company has been among those at the heart of a row over employee safety, after President Trump ordered processing plants to stay open to protect U.S. food supplies, drawing a backlash from unions that said at-risk workers need more protection.

Tyson, Smithfield Foods Inc [SFII.UL] and JBS USA [JBS.UL] have all had to shutter plants in recent weeks as the respiratory illness spread widely through the meat-processing facilities.

“We are experiencing multiple challenges related to the pandemic. These challenges are anticipated to increase our operating costs and negatively impact our volumes for the remainder of fiscal 2020.”

“Operationally, we have and expect to continue to face slowdowns and temporary idling of production facilities from team member shortages or choices we make to ensure operational safety,” the company said.

The company’s sales rose 4.3% to $10.89 billion, in the second quarter ended March 28. Analysts had expected revenue of $10.96 billion, according to IBES data from Refinitiv.

Net income attributable to Tyson fell to $364 million, or $1 per share, from $426 million, or $1.17 per share, a year earlier. [nGNX1Vn8q9]

Excluding items, the company earned 77 cents per share, missing estimates of a profit $1.04 per share.

(This story refiles to add dropped word said in first paragraph)

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Buffett's Berkshire posts nearly $50 billion loss as coronavirus causes pain

(Reuters) – Warren Buffett’s Berkshire Hathaway Inc is being hit hard by the coronavirus pandemic, posting a record quarterly net loss of nearly $50 billion on Saturday and saying performance is suffering in several major operating businesses.

Berkshire said most of its more than 90 businesses are facing “relatively minor to severe” negative effects from COVID-19, the illness caused by the novel coronavirus and now punishing the global economy, with revenue slowing considerably in April even at businesses deemed “essential.”

The BNSF railroad saw shipping volumes of consumer products and coal fall, while Geico set aside money for car insurance premiums it no longer expects to collect. Some businesses cut salaries and furloughed workers, and retailers such as See’s Candies and the Nebraska Furniture Mart closed stores.

Buffett also allowed Berkshire’s cash stake to rise to a record $137.3 billion from $128 billion at the end of 2019.

That reflected the 89-year-old billionaire’s inability to make large, “elephant” size acquisitions for his Omaha, Nebraska-based conglomerate, and caution in buying stocks.

Berkshire said it bought only a net $1.8 billion of stocks in the first quarter. It also said it repurchased $1.7 billion of its own stock, but that was less than in the prior quarter.

“Historically, Buffett has been so visible in times of crisis, and encouraged investors to take advantage of market selloffs, but if he doesn’t see opportunities even in his own stock, what are we to think?” said Jim Shanahan, an analyst at Edward Jones & Co in St. Louis.

Still, Shanahan said Berkshire is “as well positioned as it can be,” reflecting its diverse businesses and substantial liquidity and access to capital. He rates Berkshire “buy.”

Berkshire released results before its annual meeting, where Buffett said Berkshire in April sold its “entire positions” in the four largest U.S. airlines: American, Delta, Southwest and United.

Buffett said Berkshire “made a mistake” investing approximately $7 billion to $8 billion in the sector, which was changed “in a very major way” as the pandemic shut down most air travel, through no fault of the airlines.

The meeting was streamed on Yahoo Finance. It was held without the usual “Woodstock for Capitalists,” a weekend of festivities that normally draws tens of thousands of people to Omaha, and which Buffett canceled because of the pandemic.

BERKSHIRE STOCK UNDERPERFORMS

Berkshire’s first-quarter net loss was $49.75 billion, or $30,653 per Class A share, reflecting $54.52 billion of losses on stock and other investments. Net earnings were $21.66 billion, or $13,209 per share, a year earlier.

An accounting rule requires Berkshire to report unrealized stock losses and gains with net results, causing huge swings that Buffett considers meaningless.

Quarterly operating profit, which Buffett considers a better performance measure, rose 6% to $5.87 billion, or about $3,624 per Class A share, from $5.56 billion, or about $3,388 per share.

But year-earlier results reflected a charge for investments linked to what prosecutors called a Ponzi scheme at a solar company, which Berkshire did not know about.

Operating profit at Berkshire’s businesses fell 3%, with declines at BNSF, utilities and energy units, and manufacturing, service and retailing operations such as Precision Castparts, which Berkshire bought for $32.1 billion in 2016.

Geico was able to post a 28% gain in pre-tax underwriting profit because people drove less, resulting in fewer claims for crashes. Still, the insurer, like others, is offering relief on premiums to policyholders.

Vice Chairman Charlie Munger told The Wall Street Journal last month that Berkshire might close a few small businesses.

Investors have been disappointed with Berkshire. Its stock price has fallen 19% in 2020, compared with a 12% drop in the Standard & Poor’s 500, despite Buffett’s prediction that Berkshire would outperform in down markets.

The decline came after Berkshire’s stock lagged the index by more than 20 percentage points in 2019, including dividends.

In the first quarter, many Berkshire stock investments fared worse than the S&P, including American Express, Bank of America, Wells Fargo and the four airlines.

Falling stocks also caused a $1.39 billion pre-tax loss on derivatives contracts, where Berkshire is betting stock prices will rise over the long haul.

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American Airlines posts $2.2 billion loss on pandemic, first since bankruptcy exit

(Reuters) – American Airlines (AAL.O) on Thursday posted a $2.2 billion net loss, its first quarterly loss since emerging from bankruptcy in 2013, and warned of a roughly $70 million per day cash burn in the second quarter as the coronavirus pandemic halts travel.

Shares fell 4.3% before the bell.

Airlines – among the sectors hardest-hit by the pandemic – have grounded jets, canceled flights and suspended dividends and share buybacks among measures to shore up cash.

“Never before has our airline, or our industry, faced such a significant challenge,” Chief Executive Doug Parker said in a statement.

The U.S. airline swung to a net loss of $2.2 billion in the first quarter to March 31 from a $185 million profit a year earlier.

Excluding items, the net loss was $1.1 billion, or $2.65 per share, below analyst estimates of a $2.33 per share loss, according to IBES data from Refinitiv.

Total operating revenue declined nearly 20% to $8.5 billion.

The pandemic ended one of the longest expansion in U.S. history, with the nation’s economy contracting at its sharpest pace since the Great Recession in the first quarter. Airline executives have warned that demand may not recover to 2019 levels for years.

American has already reduced its flight schedule by about 80% in both April and May. Its June capacity will be down 70%, it said.

It sees liquidity at $11 billion in the second quarter, up from $6.8 billion in the first, and Parker said on a conference call that the daily cash burn should slow to about $50 million in June.

Its overall cash position will be helped by a $4.75 billion government loan under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, for which it will have to pledge a portion of its assets as collateral.

American said that, following a recent appraisal, it believes its unencumbered assets are worth over $10 billion, excluding the value of its AAdvantage loyalty program.

It is also receiving $5.8 billion in payroll aid, which bars airlines from cutting pay or jobs through Sept. 30.

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HSBC first-quarter profit halves on increased loan loss provisions due to coronavirus crisis

HONG KONG/LONDON (Reuters) – HSBC Holdings PLC’s (HSBA.L) first-quarter profit nearly halved from a year-ago, missing estimates, after boosting provisions against bad loans as the coronavirus pandemic hits borrowers worldwide.

Europe’s biggest bank by assets said profit before tax came in at $3.21 billion for January-March, down from $6.21 billion a year ago and below an average analyst forecast of $3.67 billion compiled by the bank.

The bank increased its expected credit impairment charges by a hefty $2.4 billion to $3 billion due to the impact of COVID-19 and weakening oil prices as well as “a significant charge related to a corporate exposure in Singapore”, it said.

HSBC warned the impact of the pandemic on the global economy would mean a rise in bad loans, and sustained pressure on its revenues as customer activity declined and lower central bank interest rates squeezed margins.

It also said a rise in fraudulent activity could lead to “potentially significant” credit losses.

The London-headquartered bank said it plans to reduce its operating costs to try and mitigate the fall in revenue, leading to “materially lower” profitability in 2020 than last year.

HSBC said last week it is pressing ahead with plans outlined in February to shift capital from underperforming businesses, reduce costs and strip out layers of management. But it has paused job cuts to avoid disruption and leaving staff unable to find work elsewhere.

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Eli Lilly reports 15% rise in quarterly sales

(Reuters) – Eli Lilly and Co (LLY.N) reported a 15.1% rise in first-quarter sales on Thursday, boosted by higher sales of its top-selling diabetes drug Trulicity and also benefiting from customers stockpiling its medicines amid the coronavirus pandemic.

Its quarterly revenue rose to $5.86 billion from $5.09 billion a year earlier.

However, net income fell to $1.46 billion, or $1.60 per share, in the quarter ended March 31, from $4.24 billion, or $4.31 per share, a year earlier when it recorded a gain of $3.68 billion from the sale of Elanco Animal Health. (ELAN.N).

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Ford expects coronavirus to cause $600 million quarterly loss

(Reuters) – Ford Motor Co (F.N) said on Monday it expects to post a pretax loss of about $600 million for the first quarter as the coronavirus outbreak pummeled its operations, resulting in a 21% drop in vehicle sales to dealers versus the same quarter in 2019.

The news sent Ford’s shares down more than 5% in morning trading.

Only Ford’s joint ventures in China, where the COVID-19 pandemic has been receding, are currently producing vehicles. The automaker said it is working on a scenario for a phased restart of its manufacturing plants beginning in the second quarter.

“However, we believe we have sufficient cash today to get us through at least the end of the third quarter with no incremental vehicle production and wholesales or financing actions,” Chief Financial Officer Tim Stone said in a statement.

As of April 9, Ford said it had about $30 billion in cash on its balance sheet, including $15.4 billion it borrowed last month against two existing credit lines.

Ford said any decisions on restarting its plants will be made “in cooperation with local unions, suppliers, dealers and other stakeholders.”

In March, the company shuttered plants in North America and Europe due to the spreading pandemic.

Earlier this month, the No. 2 U.S. automaker said its first-quarter U.S. sales had fallen 12.5% during the quarter. The U.S. market with its highly profitable pickup truck and SUV segments generates the overwhelming majority of Ford’s profits.

Ford’s U.S. sales chief Mark LaNeve said on April 2 that Ford believes some level of government stimulus will be needed for American consumers once the COVID-19 pandemic recedes.

Ford said it expects its first-quarter adjusted loss before interest and taxes to be about $600 million, compared with a profit of $2.4 billion a year earlier.

The company said it expects to report revenue of about $34 billion for the quarter.

In morning trade, Ford shares were down 28 cents, or 5.2%, at $5.09.

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