A roundup of some of the North American equities making moves in both directions today
On the rise
Vancouver-based Lululemon Athletica Inc. (LULU-Q) was higher after its full-year net revenue and profit forecasts exceeded estimates on the Street, anticipating continued demand for its workout wear despite easing COVID-19 restrictions in many of its top markets.
Lululemon first-quarter earnings soar on store reopenings, e-commerce
The health crisis and ensuing gym closures have pushed people to take up running and biking, creating a demand surge for clothing from athletic wear makers, including Lululemon, Nike Inc. (NKE-N) and Under Armour Inc. (UAA-N).
The home-fitness trend coupled with an increase in interest in comfortable work-from-home lounge wear has prompted apparel sellers to double down on their casual offerings, with Lululemon also launching new styles of tank tops and shorts.
The owner of Mirror home-fitness platform said it expects fiscal 2021 net revenue to be in the range of US$5.83-billion to US$5.91-billion, compared with its prior range of US$5.55-billion to US$5.65-billion.
Lululemon said it expects adjusted earnings to be between US$6.73 and US$6.86 per share, compared with its prior range of US$6.30 to US$6.45.
Analysts on average were expecting earnings of US$6.48 per share on net revenue of US$5.68-billion, according to IBES data from Refinitiv.
For the first quarter, Lululemon’s net revenue rose 88 per cent to US$1.23-billion from a year earlier, as sales at stores that Lululemon operates more than doubled. Analysts on average had expected net revenue of US$1.13-billion.
Excluding items, Lululemon earned US$1.16 per share, above estimates of 91 cents.
“Our first quarter results reflected strength across all drivers of growth, fueled by the continued expansion in our e-commerce business and a rebound in brick-and-mortar stores,” Chief Executive Officer Calvin McDonald said.
See also: Friday’s analyst upgrades and downgrades
Barrick Gold Corp. (ABX-T) was higher after Chief Executive Mark Bristow said on Friday he hoped the Porgera gold mine in Papua New Guinea (PNG) could restart this year after holding talks with PNG Prime Minister James Marape and local landowner groups.
Under an agreement reached in April, the PNG government took a 51-per-cent share in the mine, ending a year-long standoff with operator Barrick Niugini Limited (BNL), whose lease Mr. Marape had refused to renew.
BNL, jointly owned by Barrick and China’s Zijin Mining , holds 49 per cent and remains the operator under the new deal.
“The road to re-opening is a long one, and between the state, local communities and BNL, the implementation details of the agreement still need to be finalized,” Bristow said in a statement issued by Barrick.
“However, if all parties work together uninterrupted in the spirit of partnership envisaged by the agreement, our hope is that the mine will be able to restart later this year,” he added.
Zijin had said in April it expected the project to restart in 2021.
Ivanhoe Mines Ltd. (IVN-T) was up despite reporting a fatal accident at its Kamoa-Kakula joint venture in Democratic Republic of Congo, which started producing copper concentrate last week.
The accident occurred underground at the Kakula mine, Ivanhoe said in a statement, when a contractor’s employee was hit in the leg by a loose rock while working at one of the working faces, causing him to fall backwards and strike his head on a rock.
“Despite immediate first-aid assistance by his colleagues, he passed away at the accident scene,” Ivanhoe said.
The Kamoa-Kakula mine, a joint venture with China’s Zijin Mining, started producing on May 26, several months ahead of schedule.
Kamoa-Kakula is owned by Ivanhoe (39.6 per cent), Zijin Mining Group (39.6 per cent), Crystal River Global Limited (0.8 per cent) and the Congolese government (20 per cent).
Facebook Inc. (FB-Q) was flat after EU antitrust regulators opened an investigation into the world’s largest social network’s use of advertising data to see whether it breached EU rules.
The European Commission and Britain’s Competition and Markets Authority are investigating whether Facebook uses data from advertisers to compete with them.
The opening of European Competition Commissioner Margrethe Vestager’s first antitrust probe into the world’s largest social network marks her latest fight with one of the U.S. tech giants. The EU probe confirmed what a person familiar with the situation told Reuters on May 26.
Ms. Vestager has slapped more than 8 billion euros (US$9.7-billion) in fines on Alphabet unit Google and is also investigating Amazon and Apple.
Ms.Vestager will zoom in on Facebook’s vast trove of data from the near 7 million companies that advertise on Facebook.
“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data,” she said.
“In today’s digital economy, data should not be used in ways that distort competition,” Vestager said.
Walt Disney Co. (DIS-N) saw gains after a regulatory filing late on Thursday revealed Chairman Bob Iger sold shares of the company worth US$98.70-million
Iger sold 550,570 shares of Disney’s common stock, the filing showed. He sold 537,304 shares at an average price of US$179.2 per share, and 13,266 shares at an average of US$179.76 each.
Mr. Iger served as Disney’s chief executive officer since 2005 and stepped down earlier this year handing over the job to Disney Parks head Bob Chapek.
Disney has said Mr. Iger will direct the company’s “creative endeavors” until his contract ends at the end of this year.
On the decline
Goodfood Market Corp. (FOOD-T) was down after reporting 317,000 subscribers at the end of its third-quarter, down 1 per cent (or approximately 2,000) from the second quarter but up 17 per-cent year-over-year.
The Montreal-based company attributed the decline to “unseasonably warm weather and the effect of re-opening in many provinces.”
“We remain very pleased with the strong subscriber order rates and basket sizes which are to a large extent being driven by our ever-increasing selection of grocery items. Together, these metrics position Goodfood very well towards achieving strong financial results this quarter and the rest of the fiscal year,” said CEO Jonathan Ferrari.
William Ackman’s Pershing Square Tontine Holdings (PSTH-N) fell on talks to buy 10 per cent of Universal Music Group in a deal that would value the label at US$40-billion and make it the largest ever investment by a blank-cheque vehicle.
Pershing would invest US$4-billion to buy the Universal stake, making it the largest target for a special purpose acquisition company (SPAC), trumping Southeast Asian ride-hailing and food delivery firm Grab Holdings’s SPAC deal.
Vivendi, controlled by French billionaire Vincent Bollore, has benefited from growing streaming revenues at the world’s biggest music label, which is behind artists such as Taylor Swift and Lady Gaga.
It has already sold chunks of Universal Music to a consortium led by Chinese giant Tencent, and plans to list Universal in Amsterdam by September as part of a two step transaction to distribute 60 per cent of the label to existing investors.
Fertilizer producer Mosaic Company (MOS-N) gained after it said on Friday it will resume production at its idled Colonsay potash mine in Saskatchewan to offset the hit from earlier-than-expected closures of two mine shafts in the province.
The K1 and K2 mine shafts in the town of Esterhazy have been prone to flooding, forcing it to continuously pump out salty water. The company is building a new shaft, K3, to eliminate the issue and associated costs.
During the expected transition period of July 2021 to March 2022, the company anticipates a 1-million-tonne hit to potash production.
However, Mosaic forecasts its annualized potash production to increase by 2 million tonnes by March 2022 from 2020 levels, as its Esterhazy K3 mine ramps up to full capacity and Colonsay returns to service.
The company had indefinitely idled Colonsay in January last year, blaming weak North America demand that left it with excess inventory and production capacity.
“This restart will offset a portion of the production lost by the early closure of the K1 and K2 shafts at Esterhazy, and position the company to take advantage of the expected strong potash markets in 2022 and beyond,” Mosaic said in a statement.
For the second quarter this year, Mosaic expects to record costs of US$20-million to US$25-million in brine management cash expenses and US$80-million to US$100-million related to writedowns for the remaining assets at K1 and K1
With files from staff and wires
David Leeder