Consumer Sector Update for 03/09/2018: DTEA,BIG,PRTY

Top Consumer Stocks

WMT +0.39%

MCD +2.08%

DIS +0.07%

CVS +1.09%

KO +0.52%

Consumer stocks were mostly higher Friday, with shares of consumer staples companies in the S&P 500 adding over 0.5% in value in afternoon trading while shares of consumer discretionary firms in the S&P 500 were climbing more than 1.0%.

Among consumer stocks moving on news:

+ DAVIDsTEA ( DTEA ) jumped out to an early 7% advance on Friday, topping out at $3.90 a share, after saying its co-founder, Herschel Segal, resigned from the company's board of directors on Monday and is leading a prospective going-private transaction for the specialty retailer. Segal, who owns about 47.2% of the company's stock through his controlling interest in Rainy Day Investments Ltd, told the company in a Feb. 20 letter he was exploring a privatization bid for DAVIDsTEA and buying out all of its minority shareholders. He also was considering unspecified strategic transactions, the company said, adding it was examining Segal's proposals and was also looking at other alternatives. In a related move, Lorenzo Salvaggio, the chief operating officer at Rainy Day Investments, also plans to leave the company's board.

In other sector news:

- Big Lots ( BIG ) stumbled Friday, falling almost 14% to reach a session low of $46.55 a share, after the discount retailer reported below-consensus Q4 net sales and issued a sub-par Q1 forecast. Sale rose to $1.64 billion during the 13 weeks ended Feb. 3 from $1.58 billion during the year-ago period but still lagging the Capital IQ consensus by around $10 million. Excluding one-time items, its earned $2.57 per share, also improving on a $2.26 per share adjusted profit last year and beating the Street view by $0.14 per share. For the current quarter, the company is projecting adjusted per-share earnings between $1.15 to $1.22, lagging the analyst mean by at least $0.10 per share.

+ Party City Holdco ( PRTY ) was celebrating Friday, with shares of the specialty retailer rising 15% to a session high of $16.73 each, after reporting better-than-expected Q4 results and issuing upbeat FY18 guidance. Excluding one-time items, Party City earned $0.81 per share, up from $0.76 per diluted share during the year-ago period and beat the Capital IQ consensus by $0.01 per share. Total revenue grew to $789.6 million from $749.3 million last year, also beating the $781.3 million Street view. Looking forward, the company is projecting adjusted FY18 earnings in a range of $1.76 to $1.87 per share on between $2.44 billion to $2.49 billion in revenue. Analysts, on average, are looking for Party City to earn $1.83 per share this year on $2.46 billion in revenue. The company also said it has entered into an agreement to acquire the master franchise group representing 11 franchise stores in Maryland for $14.0 million.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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