Morning Movers: Beam Up on Takeover; Retailers Disappoint; Wendy's Heads Higher
On CNBC's Squawk on the Street this morning, co-anchor David Faber-- who is always wary of using the term 'merger Monday' admitted that this Beam (BEAM) takeover by Suntory Holdings almost warranted such a title. Beam of course is the name behind Jim Beam, Maker's Mark, Sauza teuila, Courvoisier cognac, Canadian Club whiskey, and Teacher's Scotch. The total purchase price, $16 billion, including assumption of debt, marks a win for the stub company of the old Fortune Brands, which sold off its Golf business and spun off its home business into Fortune Brands Home & Security (FBHS).
In retail, Lululemon (LULU - Get Report) is down sharply after this high multiple lifestyle brand lowered profit and sales forecasts. The company had many hiccups in 2013, including product recalls (see-through pants!) and former CEO Christine Day stepping down. At this point, it is key to see more sales traction before getting positive about 2014 prospects. A trade idea? Under Armour (UA), which is gaining share with women and whose innovation roll-outs are flowing to the bottom line.
This week will be chock full of data from retailers at the ICR XChange conference so keep a lookout for more. Merchandising remains front and center -- particularly after the slew of disappointments we have gotten of late, including most recently from Express (EXPR - Get Report), following a dismal December report. Ascena (ASNA) reported a disappointing comp number out of November and December, particularly as previous quarter trends had pointed to a turnaround for the stock. It's still well positioned with a diverse portfolio but needs recent trends to turn. And ouch on SodaStream (SODA)! The stock sold off sharply after lowing revenue and EPS guidance due to, yes again, a challenging holiday season. Perhaps, as Herb Greenberg postulated, SodaStream dampered Bed Bath & Beyond (BBBY) earnings to some degree.
We got mixed food reviews this morning. Wendy's (WEN - Get Report) is a name that has surged from innovation (like the famous pretzel burger and more recently the brioche) along with occupying a 'third way' between McDonald's (MCD) and Panera Bread (PNRA), as Jim Cramer has emphasized. On the other hand, momentum name Noodles (NDLS) reported another round of soggy numbers, calling into question the company's turbo-charged growth strategy. On a positive note, Hain Celestial (HAIN - Get Report), a name well positioned in this new age of health and wellness, made another smart acquisition by buying up Tilda, a leading global rice brand.
Take a look at my quick morning round up from this morning: