A humorous look at the companies that caught our eye, for better or worse, this week
Johnson & Johnson (DOG)
Business quiz! Shares of Johnson & Johnson dropped on Friday after the company: a) pulled Johnson’s “no more tears” baby shampoo amid reports that several babies did in fact cry while getting their hair washed; b) was the target of a class-action lawsuit from consumers who alleged that “when pulling my Band-Aid off, several hairs got stuck on the adhesive, causing great physical discomfort and emotional trauma”; c) recalled one lot – or about 33,000 bottles – of baby powder after U.S. health regulators discovered trace amounts of asbestos in a bottle purchased online. Answer: c.
JNJ - NYSE
SIR Royalty Income Fund (DOG)
Food-delivery apps such as Uber Eats and Skip the Dishes may be convenient for consumers, but they’re giving restaurant investors a bad case of acid reflux. Units of SIR Royalty – which licenses trademarks to Jack Astor’s, Scaddabush and other dining chains in exchange for a cut of the sales – plunged after SIR chopped its distribution by 17 per cent, citing an “ongoing decline in … food and beverage sales” caused by the delivery services and other factors. With same-store sales down 5.9 per cent in the quarter ended Aug. 25 and showing no signs of improvement since then, investors are eating elsewhere.
SRV.UN - TSX
A winter parka over a crop top? Shorts, running shoes and a metallic silver down jacket? The models on Aritzia’s website may not know how to dress themselves appropriately for cold weather, but the fashion retailer’s stock is looking warm and toasty. Shares of the Vancouver-based company surged after Aritzia posted same-store sales growth of 8.4 per cent for the 13 weeks ended Sept. 1 – the 20th consecutive quarterly increase – as net income jumped 18.6 per cent. Maybe Aritzia investors could pitch in and buy the models a sensible wool sweater?
ATZ - TSX
International Business Machines (DOG)
For IBM investors, the trend is definitely not their friend. Shares of the struggling tech giant skidded after IBM posted its fifth consecutive quarter of shrinking sales, as the acquisition of open-source software provider Red Hat earlier this year failed to make up for continued declines in other parts of IBM’s business. Even as IBM beat earnings estimates for the quarter, the revenue miss only added to concerns that the stock – which is trading below levels of nine years ago – will continue to underperform. Big Blue investors are blue alright.
IBM - NYSE
Gildan Activewear (DOG)
“Look, under there!”
“I just made you say underwear!”
The folks at Gildan are in no mood for jokes after the maker of underwear, T-shirts and other basics warned that third-quarter sales and earnings will be lower than last year and slashed its full-year guidance, citing “significantly weaker than expected demand” for imprintable apparel in North America and “ongoing softness” in Europe and China. With Gildan expecting 2019 free cash flow to be about US$100-million lower than previously expected and analysts downgrading the stock, the stock suffered a gotchy-pull.
GIL - TSX