A roundup of some of the North American equities making moves in both directions today
On the rise
CI Financial Corp. (CIX-T) rose 1.6 per cent after a premarket announcement that the Toronto Stock Exchange has accepted normal course issuer bid and automatic securities purchase plan.
CI intends to purchase up to 19,676,318, or 10 per cent of the total float, of its common shares. All common shares purchased will be cancelled.
McDonald’s Corp. (MCD-N) sat 0.4 per cent higher after it said on Tuesday its global sales fell about 30 per cent in the first two months of the current quarter due to the COVID-19 pandemic even as it signaled a recovery in demand as it starts to reopen restaurants around the world.
The fast-food chain said demand had improved significantly from April to May as many of its restaurants began serving diners, especially in the United States. While overall same-store sales fell 39 per cent in April, they declined 21 per cent in May.
Several U.S. states have lifted restrictions that were imposed to curb the spread of the coronavirus. During the lockdowns, fast-food restaurants had to limit operations to drive-thru, takeaway and delivery through third-party apps as dining-in remained closed, which led to lower sales.
Globally, McDonald’s current-quarter comparable sales were mainly hurt by the closure of all of its restaurants in France, Spain, the United Kingdom and Italy in April, the company said.
In the UK and some European countries, McDonald’s began reopening restaurants in May after being completely shut for several weeks.
U.S. homebuilder Lennar Corp. (LEN-N) rose 0.6 per cent after reporting reported a better-than-expected quarterly profit and forecast full-year deliveries above estimates after the bell on Monday, as home sales rebound due to the economy gradually reopening following coronavirs-led lockdowns.
As U.S. consumer confidence nudged up in May, analysts expect that the worst of the housing market slump is likely behind as the country gets back to work.
“Business rebounded significantly in May ... and this rebound has continued into the first two weeks of June,” Executive Chairman Stuart Miller said in a statement.
“While unemployment increased throughout the quarter due to impacts from the COVID-19 pandemic, customers moved from rental apartments and from densely populated areas to purchase homes,” he said adding that record-low interest rates are helping the recovery.
The company, which withdrew it full-year outlook in March, said it was now confident of achieving full-year deliveries in the range of 50,500 to 51,000 home, beating analysts’ expectation of 50,580 deliveries, according to IBES data from Refinitiv.
On the decline
Aurora Cannabis Inc. (ACB-T) was down 0.7 per cent on Tuesday after co-founder Steve Dobler said he will retire as president and as a director of the company at the end of the month.
Mr. Dobler has held the roles at the cannabis company since December 2014.
With the retirement of Mr. Dobler, the board will have nine directors.
The move follows the departure of founder Terry Booth, who stepped down as chief executive earlier this year.
Aurora announced in February that it was taking $1-billion in writedowns and would lay off 500 employees as part of a shakeup to its spending plans.
In May, the company announced it was entering the U.S. market with the acquisition of hemp-based cannabidiol company Reliva LLC.
DavidsTea Inc. (DTEA-Q) was down 7.5 per cent after it said it may pursue a formal restructuring that partly depends on landlord negotiations as the company looks to close some of its unprofitable locations.
“Our challenge is to execute on our strategy to restructure our North American retail footprint in order to decrease the ongoing losses caused by unprofitable stores,” said Herschel Segal, interim chief executive, during a conference call Monday after the company released its fourth-quarter and full-year financial results.
“If we are not successful in negotiations with our landlords to optimize our retail footprint to reflect the new circumstances, we may need to pursue a formal restructuring in order to do so.”
The company has not paid rent at any of its stores for April, May or June. All its stores have been closed since March 17 due to the COVID-19 pandemic, and it cannot yet predict when, if and how many of its retail locations will open.
Subsequent to year-end, DavidsTea did not renew three store leases in Canada and exited one store early in the U.S. It is negotiating to exit eight more stores.
As of Feb. 1, the company had 231 stores, according to its financial documents.
Charlotte’s Web Holdings Inc. (CWEB-T) dropped almost 14 per cent after it announced a $67.5-million underwritten public offering. The company said it has an agreement with a syndicate of underwriters that has agreed to purchase 10 million units at $6.75 each.
Chesapeake Energy Corp. (CHK-N) fell 18.5 per cent amid reports it is preparing to file for bankruptcy as soon as this week, becoming the largest oil and gas producer to unravel after an energy market rout caused by the coronavirus outbreak.
The Oklahoma City-based company, co-founded by the late wildcatter Aubrey McClendon, is in the final stages of negotiating a roughly US$900-million debtor-in-possession loan to support its operations while under Chapter 11 bankruptcy-court protection, two of the sources said.
The company is also in talks with creditors to “roll up” some of its existing debt and make it part of the bankruptcy loan, bringing the total debtor-in-possession financing closer to US$2-billion, the sources added. The company is reeling under a mountain of debt totaling more than US$9-billion.
Chesapeake is also attempting to negotiate an equity infusion from creditors to help it emerge from bankruptcy proceedings, one of the sources said.
With files from staff and wires
David Leeder