A roundup of some of the North American equities making moves in both directions today
On the rise
Canada Goose Holdings Inc. (GOOS-T) jumped 17.5 per cent after it said on Wednesday it expected a negligible level of revenue in the current quarter after the luxury parka maker was forced to shut stores in markets across the world due to the COVID-19 pandemic.
The Canadian company, known for its pricey red parkas worn by everyone from Arctic scientists to Hollywood celebrities, suffered a big hit to sales as fashion capitals across Europe, Asia and North America effectively shut down through much of March and April to help curb the spread of the virus.
Canada Goose also said shipments to department stores have been largely shutoff since March due to coronavirus-led restrictions.
The first quarter is usually the company’s smallest in the fiscal year, representing 7.4 per cent of annual sales in fiscal 2020.
However, the company said it was taking steps, such as slashing executive salaries and marketing costs, to cut expenses and investments in the first quarter by about $90-million.
The company’s revenue fell nearly 10 per cent to $140.9-million in the fourth quarter ended March 29, but beat analysts’ estimates of $128.1-million, according to IBES data from Refinitiv.
The company’s quarterly net income fell over 72 per cent to $2.5-million. Excluding certain items, Canada Goose reported a loss of 12 cents per share, in line with expectations.
Boeing Co. (BA-N) rose 12.9 per cent and was the top boost to the blue-chip Dow Jones index after billionaire investor Daniel Loeb’s Third Point said it took a stake in the planemaker.
Coty Inc. (COTY-N) jumped 13.2 per cent after the cosmetics maker disclosed in a regulatory filing on Wednesday it is in talks with reality TV star Kim Kardashian West over a potential collaboration for a beauty line.
The company already has a majority stake in West’s half sister, Kylie Jenner’s makeup and skincare line, which it bought last year for US$600-million.
The holding recently came under the scanner after Forbes magazine alleged that Ms. Jenner had been overplaying the value of her cosmetics brand.
Coty’s new chief executive officer said on Monday the allegations came as a “mystery” to him.
American Eagle Outfitters Inc. (AEO-N) gained over 14.5 per cent despite posting a steeper-than-expected loss on Wednesday, as sales and store traffic plummeted following coronavirus-led store closures.
The retailer, which withdrew its annual forecast in April, has experienced a drop in demand for its jeans and popular Aerie brand apparel, which include intimates and athleisure.
The Aerie brand recorded a revenue decline of 2 per cent, compared with a 28-per-cent rise a year ago. Revenue at the American Eagle label fell 45 per cent during the quarter.
The company also suspended its second-quarter dividend and does not anticipate declaring a dividend for the rest of this year to preserve liquidity.
American Eagle also said its net loss stood at US$257.2-million, or US$1.54 per share, compared with a profit of US$40.8-million, or 23 US cents per share, a year earlier, mainly due to an impairment charge of about US$156-million related to COVID-19-induced closures of 272 stores.
Ride-hailing firm Lyft Inc. (LYFT-Q) said late Tuesday that rides on its platform rose 26 per cent in May from the previous month helped by strong growth in cities where coronavirus-induced restrictions have been eased.
Lyft’s shares rose 8.7 per cent after the company said rides had risen week-over-week for seven consecutive weeks since the week ended April 12.
“For the last three weekends, as restrictions on certain activities were eased in parts of the country, there was stronger relative sequential growth in weekend rides versus weekly rides on Lyft’s rideshare platform,” the company said.
However, the company said rides were down about 70 per cent in May from a year ago.
Zoom Video Communications Inc. (ZM-Q) was up 7.6 per cent after it nearly doubled its expectations for annual sales on Tuesday, driven by a surge in users as more people work from home and connect with friends online during coronavirus lockdowns.
But Zoom’s costs also rose sharply, and executives said gross margins would likely remain below Zoom’s historical norms in the coming quarters.
The company has transformed itself into a global video hangout from a business-oriented teleconferencing tool. It came under fire over privacy and security issues, prompting it to roll out major upgrades.
The company raised its full-year revenue forecast to a range of US$1.78-billion to US$1.80 -billion from US$905-million to US$915-million. Analysts on average expected revenue of US$935.2-million for the fiscal year ending January 2021.
The latest quarterly report shows the company now has about 265,400 customers with more than 10 employees, a near fourfold increase from a year earlier.
See also: Wednesday’s analyst upgrades and downgrades
On the decline
Aurora Cannabis Inc. (ACB-T) was down 1.7 per cent after announcing it has agreed to sell 9.2 million common shares of Alcanna Inc. (CLIQ-T) to a syndicate of underwriters, led by Cormark Securities Inc.
The group will purchase the shares for $3 each and offer them to the public by way of a short form prospectus for total gross proceeds to Aurora of approximately $27.6-million.
The offered shares represent approximately 23 per cent of the issued and outstanding common shares of Alcanna and all of the shares held by Aurora.
Alcanna shares were 1.3 per cent higher.
Montreal-based Goodfood Market Corp. (FOOD-T) slid 3.9 per cent after announcing early Wednesday it reached 272,000 active subscribers, adding 26,000 net new subscribers for the third quarter ended May 31, 2020, representing an increase of 44 per cent year-over-year.
“This strong subscriber growth was achieved in the challenging operating environment caused by the COVID-19 pandemic, which prompted significantly higher order rates and basket size from existing members as Goodfood rapidly modified its operations to ensure a safe workplace for its employees and a safe and reliable supply of essential food orders for its members,” the company said.
Element Fleet Management Corp. (EFN-T) was down 0.3 per cent after announced the closing of its inaugural issue of $400-million of U.S. senior unsecured investment-grade notes.
The proceeds will be used together with cash on hand to retire $567-million of 4.25-per-cent convertible debentures maturing June 30.
“The notes are Element’s first offering in the U.S. senior unsecured debt market and part of the Company’s strategic plan to continue to strengthen its investment-grade balance sheet – including by maturing the capital structure and further diversifying Element’s access to cost-efficient funding. The sale priced at an all-in yield of 3.853 per cent,” the company said.
Campbell Soup Co. (CPB-N) raised its full-year profit and sales forecast on Wednesday after beating expectations for third-quarter results as consumers stocked up on soup, pasta sauces and salsa while they stayed at home during the pandemic.
Shares of the company, which had risen 5 per cent this year, were down 6.1 per cent.
Demand for packaged foods saw a surge during the lockdowns, as shuttered restaurants and limited take-away options forced people into stocking up more food options at home.
The Prego pasta sauce maker now expects fiscal 2020 adjusted earnings per share to be between US$2.87 and US$2.92, compared with its prior range of US$2.55 to US$2.60.
The company also said it expected its fiscal 2020 net sales growth to be between 5.5 per cent and 6.5 per cent. It had previously forecast a decline of 1 per cent to a growth of 1 per cent.
AMC Entertainment Holdings Inc. (AMC-N) was down 3.5 per cent after it signaled “substantial doubts” about its ability to continue operating, if the company was forced to keep its theaters closed for a longer period because of the COVID-19 pandemic.
Movie theaters worldwide have been shut since mid-March to help contain the spread of the novel coronavirus. In the United States, individual states are now considering when to allow businesses to reopen.
“We cannot predict when or if our business will return to normal levels,” the world’s largest movie theater operator said in a regulatory filing.
AMC also said it may not have sufficient liquidity to tide over until its cash-generating operations are back to normal.
The company said it had a cash balance of US$718.3 -million as of April 30.
The company also said it expected to report a loss of between US$2.12-billion to US$2.42-billion for the first quarter ended March 31, largely due to an impairment charge of about US$2-billion.
With files from staff and wires
David Leeder