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A roundup of some of the North American equities that made moves in both directions

On the rise

Lowe’s Cos Inc. (LOW-N) finished narrowly higher after it reported its biggest rise in quarterly same-store sales in at least 15 years on Wednesday, as people spent more on tools and paint for do-it-yourself projects and home repairs during the coronanvirus lockdowns.

The home improvement chain also handily beat quarterly profit estimates, sending its shares up 7 per cent, a day after larger rival Home Depot Inc.’s (HD-N) first-quarter earnings disappointed.

More time on people’s hands due to shelter-in-place orders and government stimulus checks have allowed many to go for small repairs, painting, gardening, and other projects, boosting sales for Lowe’s and Home Depot.

Online sales for Lowe’s surged 80 per cent in the quarter, after the company limited operating hours and implemented social distancing measures at its stores to minimize the risk of the virus spreading.

Analysts at Wedbush on Home Depot’s profit miss said the company was restricting traffic at its stores more than Lowe’s and that Home Depot’s business is also more reliant on big-ticket purchases from builders, handymen and plumbers, who have cut spending during the crisis.

The massive jump in Lowe’s sales also offset higher expenses to compensate employees working during the health crisis.

Shares of Home Depot were lower by 0.02 per cent.

Delta Air Lines Inc. (DAL-N) increased 4.4 per cent after its chief executive officer said Wednesday it is likely to increase capacity this summer by adding flights in June and July as U.S. domestic travel slowly picks up amid the novel coronavirus pandemic.

CEO Edward Bastian told Fox Business Network the airline’s 60-per-cent cap on passenger load would help it maintain social distancing, while it also undertakes other efforts such as cleaning to boost customer confidence.

“Today our load factor on Delta is somewhere about 35-40-per-cent full,” he said in an interview. “Once we get close to 60 per cent on an individual route that’ll be the trigger for us to add more planes into the system.”

Mr. Bastian said he expected to add about 200 flights in June, and probably another 200 or 300 flights in July.

Overall, U.S. travel continues to be “slow,” he said, adding that he expects it to recover in the next 12 to 18 months, although international travel may not restart more fully until 2021.

Immunotherapy company Inovio Pharmaceuticals Inc. (INO-Q) surged 8.3 per cent after saying its experimental coronavirus vaccine was shown to produce protective antibodies and immune system responses in mice and guinea pigs.

“We saw antibody responses that do many of the things we would want to see in an eventual vaccine,” said Dr. David Weiner, director of the vaccine and immunotherapy center at the Wistar Institute, which has collaborated with Inovio. “We are able to target things that would prevent the virus from having a safe harbor in the body.”

There are currently no approved treatments or vaccines for COVID-19, the disease caused by the new coronavirus. Experts predict a safe and effective vaccine could take 12 to 18 months to develop.

Harley-Davidson Inc. (HOG-T) was 4.3 per cent higher after the Wall Street Journal reported on Wednesday it is reopening its factories this week at lower production rates and sending dealers a narrower range of motorcycles, .

The U.S. motorcycle maker, which closed its U.S. assembly plants in March due to the coronavirus outbreak, may not ship any additional new motorcycles this year to about 70 per cent of its 698 dealers in the country, the report said.

Harley would reopen its plants in Wisconsin and Pennsylvania and accelerate production in phases that would be limited to bestselling models and palette of colors and without customizable features for the remainder of the year, the report added.

The company has failed for years to increase sales in the United States, its top market which accounts for more than half its motorcycles sold. As its tattooed, baby-boomer consumer base ages, the Milwaukee-based company is finding it challenging to attract new customers.

Oilfield services provider Halliburton Co. (HAL-N) gained 7.3 per cent after it slashed its quarterly dividend by 75 per cent on Wednesday, the latest in a string of cost cutting moves to cope with the dramatic plunge in oil prices that began in March.

The company set a dividend of 4.5 US cents per share payable on June 24, down from 18 US cents per share paid on March 25.

On the decline

Target Corp. (TGT-N) was down almost 3 per cent after its quarterly online sales surging 141 per cent due to panic buying in the coronavirus crisis, the retailer said on Wednesday, driving results past Wall Street expectations even as its operational costs soared.

The company said it had set aside nearly US$500-million to spend on maintaining safety standards at stores and pay employees higher wages for working through the pandemic.

“Last quarter was unlike anything I’ve ever seen,” Chief Executive Officer Brian Cornell told reporters. “It was intense, it was volatile, it was stressful for our guests and the country.”

Stay-at-home orders imposed to contain the virus powered a 141-per-cent jump in Target’s online comparable sales, accounting for almost all of its same-store sales growth.

Although sales at stores opened for at least a year rose 0.9 per cent, including digital they jumped 10.8 per cent in the first quarter ended May 2, beating expectations, according to IBES data from Refinitiv.

At the start of the quarter, Target, like Walmart, benefited from customers stockpiling staples and cleaning products, but as the lockdown extended and the stimulus checks arrived, demand rose for discretionary goods.

Shares of rival Walmart were up 0.4 per cent a day after beating Wall Street’s quarterly revenue and profit forecasts and setting an online sales record as millions of consumers stocked up on food and cleaning supplies.

Apparel retailer Urban Outfitters Inc. (URBN-Q) slid 7.8 per cent after it projected a 60-per-cent decline in same-store sales in the second quarter due to tepid demand recovery from the COVID-19 pandemic disruptions.

The Free People brand owner has reopened about 40 per cent of its more than 600 stores worldwide, but said initial customer traffic has been sluggish. It expects to open 100 more stores by the first week of June.

“We believe a return to near pre-virus levels will take many quarters and a medical vaccine or cure,” Chief Executive Officer Richard Hayne told analysts.

Urban Outfitters also reported worse-than-expected preliminary results for first-quarter ended April 30, as its stores remained closed for about half of the quarter due to the coronavirus-led restrictions.

Citi analyst Paul Lejuez said: "1Q sales were slightly better than very low expectations, but a big inventory charge and store impairment drove a big decline in GM that wasn’t expected. With cash on the balance sheet of $670-million and net cash of $450-million, they have ample liquidity in the quarters ahead. However, a lot of risks remain and uncertainty is high (as management pointed out several times) around the timing of reopenings in their top 5 markets, how promotional the retail environment will be in the coming quarters and when (if ever) traffic will return to normal pre-Covid levels, making timing of a financial recovery unclear. "

Shares in Luckin Coffee Inc. (LK-Q) fell 35.1 per cent on Wednesday, as they resumed trading after more than a month’s halt and a day after the Chinese coffee chain said it received a delisting notice from Nasdaq.

Nasdaq has renewed its focus on auditing standards. This week it tightened listings rules, hoping to curb initial public offerings (IPOs) of Chinese companies closely held by insiders and opaque about accounting, Reuters reported on Monday.

Luckin said in early April that as much as 2.2 billion yuan (US$310-million) in sales last year were fabricated by its chief operating officer Jian Liu and other staff, who had been suspended while the company carried out its investigation.

The falsified numbers equate to about 40 per cent of Luckin’s annual sales projected by analysts, according to Refinitiv IBES data.

Johnson & Johnson (JNJ-N) slid 0.9 per cent in the wake of announcing late Tuesday it would stop selling its talc Baby Powder in the United States and Canada, saying demand had dropped in the wake of what it called “misinformation” about the product’s safety amid a barrage of legal challenges.

J&J faces more than 19,000 lawsuits from consumers and their survivors claiming its talc products caused cancer due to contamination with asbestos, a known carcinogen. Many are pending before a U.S. district judge in New Jersey.

“I wish my mother could be here to see this day,” said Crystal Deckard, whose mother Darlene Coker alleged Baby Powder caused her mesothelioma. She dropped the suit filed in 1999 after losing her fight to compel J&J to divulge internal records. Coker died of mesothelioma in 2009.

In its statement, J&J said it “remains steadfastly confident in the safety of talc-based Johnson’s Baby Powder,” citing “decades of scientific studies.”

J&J has faced intense scrutiny of the safety of its baby powder following an investigative report by Reuters in 2018 that found the company knew for decades that asbestos lurked in its talc.

Royal Caribbean Cruises Ltd. (RCL-N) dipped 3.3 per cent in the wake of forecasting a loss for the current quarter as the cruise operator struggles with trip cancellations due to global travel restrictions to halt the spread of the coronavirus outbreak.

The company, which has borrowed more than US$5-billion to shore up its finances, also said it expects to pay between US$590-million and $610-million in interests for the rest of the year.

The cruise operator also said booking volumes for the remainder of the year were lower than the same period a year earlier at prices that are down low single digits.

Excluding one time items, the company reported a loss of US$1.48 per share for the first quarter ended March 31.

With files from staff and wires

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