Tag Archives: KR

Bumble Bee Foods CEO Facing Criminal Charges in Price-Fixing Scandal

The Bumble Bee Food CEO is facing criminal charges in a tuna price-fixing scandal that could land him up to a decade in jail and a costly fine.

Bumble Bee Foods Source: FDA

A federal grand jury has indicted Christopher Lischewski, who is the CEO of the company. The Department of Justice has accused Lischewski of meeting and communicating with rival seafood companies to keep tuna prices artificially high.

The Justice Department did not mention the name of the co-conspirators, but a number of major grocery chains such as Walmart Inc (NYSE:WMT), Kroger Co (NYSE:KR) and Albertsons have sued Bumble Bee, Starkis and the maker of Chicken-of-the-Sea in 2016 for fixing tuna prices.

The complaint claims that Lischewski took place in a conspiracy with other companies between November 2010 and December 2013, and he is the fourth individual charged in a federal probe into the industry. If convicted, he could face a 10-year prison sentence, a $1 million fine and other penalties.

Last year, Bumble Bee agreed to plead guilty for playing a role in the conspiracy and agreed to pay a $25 million criminal fine. Lischewski isn’t the first company executive to be charged in connection with the scam as back in 2016, senior vice president of sales Walter Scott Cameron has agreed to plead guilty for his role in the conspiracy.

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Bumble Bee Foods CEO Facing Criminal Charges in Price-Fixing Scandal

The Bumble Bee Food CEO is facing criminal charges in a tuna price-fixing scandal that could land him up to a decade in jail and a costly fine.

Bumble Bee Foods Source: FDA

A federal grand jury has indicted Christopher Lischewski, who is the CEO of the company. The Department of Justice has accused Lischewski of meeting and communicating with rival seafood companies to keep tuna prices artificially high.

The Justice Department did not mention the name of the co-conspirators, but a number of major grocery chains such as Walmart Inc (NYSE:WMT), Kroger Co (NYSE:KR) and Albertsons have sued Bumble Bee, Starkis and the maker of Chicken-of-the-Sea in 2016 for fixing tuna prices.

The complaint claims that Lischewski took place in a conspiracy with other companies between November 2010 and December 2013, and he is the fourth individual charged in a federal probe into the industry. If convicted, he could face a 10-year prison sentence, a $1 million fine and other penalties.

Last year, Bumble Bee agreed to plead guilty for playing a role in the conspiracy and agreed to pay a $25 million criminal fine. Lischewski isn’t the first company executive to be charged in connection with the scam as back in 2016, senior vice president of sales Walter Scott Cameron has agreed to plead guilty for his role in the conspiracy.

Compare Brokers

3 Reasons to Buy Kraft Heinz Stock, 1 Reason to Sell

What to do about Kraft-Heinz (NASDAQ:KHC)? One of Berkshire Hathaway’slarger holdings (Berkshire owns roughly 26.7% of shares outstanding, controlling the company in tandem with Brazilian investment firm 3G Capital),Kraft’s stock has tumbled roughly 28% in 2018, as the consumer packaged foods industry (“CPG”) has come under pressure.

In addition, the market is growing increasingly skeptical of Kraft’s ability to make a transformative aquisition, which had been the main upside thesis in Kraft-Heinz ever since the two companies merged three years ago.

Now near 52-week lows, is it time for holders to cut bait on the fallen darling, or is the stock now a screaming deal?

Reason to sell: disruption

I always like to get bad news out of the way first. Ironically, Kraft’s bad news was recently articulated not by short-sellers or bearish sell-side analysts, but rather by its very own largest stakeholder!

At a recent conference, 3G Capital CEO Jorge Paulo Lemann admitted, “I’ve been living in this cozy world of old brands and big volumes… We bought brands that we thought could last forever… You could just focus on being very efficient… All of a sudden we are being disrupted.”

a man sits at a desk with Oscar Meyer meats and a laptop and funny glasses.

Can innovatinve marketing like “Bacoin” save Kraft-Heinz? Image source: Kraft-Heinz.

Lehmann founded 3G, and was instrumental in the acquisition-of-big-brands strategy behind Kraft-Heinz, AB InBev (NYSE: BUD) and Restaurant Brands (NYSE: QSR). For him to admit his company was “caught by surprise” after deploying billions of dollars toward the large consumer brand strategy was quite an admission.

The disruption has come from the confluence of several factors, including the rise of craft/natural foods, low-cost private label brands, and the advent of e-commerce. The new generation of more health-conscious, yet budget-constrained consumers, has put traditional consumer packaged goods brands in a tough spot. On the high-end, these brands are being crowded out by healthier, more natural alternatives, while huge retailers have come out with high-quality private label brands, such as Costco’s (NASDAQ: COST) Kirkland brand and Kroger’s (NYSE: KR) Simple Truth, which are often priced below CPG rivals.

These factors have challenged Kraft-Heinz’s top-line, which fell 1.5% (in constant currency) in the first quarter. That being said, Lehmann also said, “I’m not going to lie down and go away,” and Kraft’s executives have been working hard to adapt to the times. Here are three reasons why you may want to buy the stock today.

Reason to buy: it’s a bargain

While the “safety” of consumer packaged goods companies traditionally earned these stocks relatively high price-to-earnings multiples, even with low growth, that has changed in a hurry very recently. Lackluster growth as well as concerns about high freight cost inflation have taken a toll on the industry, and especially Kraft-Heinz:

KHC PE Ratio (Forward) Chart

KHC PE Ratio (Forward) data by YCharts

Currently, you are not only buying into a low-priced sector, you are arguably buying the best-run company of the lot, at a valuation on par with its industry peers, and receiving a 4.5% dividend as well.

Of course, buying a cheap stock doesn’t necessarily turn out well, unless management is on its way to improving. On that front, there are two ways in which Kraft-Heinz is attacking this new age of disruption.

Reason to buy: product innovation

Kraft-Heinz isn’t resting on its laurels, but is quickly innovating its products.These innovations fall primarily into two camps. One is around renovating “powerhouse” brands ($1 billion+ in sales) such as Kraft, Heinz, Oscar Mayer, Planters, and Philadelphia to make them more relevant (like taking out artificial ingredients from Kraft Mac ‘n Cheese), and well as extending them to horizontal products (such as Kraft mayonnaise).

The second type of innovation is for entirely new products. On that front, Kraft-Heinz is moving quickly, aiming for 60% more innovations in 2018 versus 2016. Recent successes include Devour frozen meals, as well as the new, “Just Crack an Egg,” which, on the recent call with analysts, CEO Bernardo Hees said was “selling faster than we can make it.” Kraft also recently started its Springboard platform, a start-up accelerator to find the next big food innovation. Management has emphasized the need to provide incremental sales, not just the replacement of declining or outdated products.

Obviously, new brands such as these are not going to move the needle in the near-term — new innovations only made up 7% of sales over the past three years. Still, there are hints at least some are making a difference. In its recent post-integration update, management credited the new Devour line with returning the company’s frozen food category to growth after serval years of mid-teens declines.

Reason to buy: new marketing

Behind all of this product innovation will also be a revamped marketing strategy.One of the more interesting things Kraft Heinz is doing is doubling down on its own salespeople inside supermarkets, rather than pulling back or using third-party merchandisers. By bringing everything in-house, the company believes it can be more effective, as well as use big data analytics to further target marketing campaigns to the modern age. Hees said, “We started doing this in 2017. I can guarantee you that it’s paying off and we’re actually doubling down on this.”

Kraft is also investing in its people, with employees completing 60,000 hours of custom-made courses just in the first quarter alone. These courses keep employees up to speed on the latest innovations in R&D, marketing, and industry knowledge.

Get hungry

Down severely in 2018 while possessing the most dynamic management team in the industry, I’d be a buyer of Kraft-Heinz here here rather than a seller. It’s time to be hungry when others are fearful!

5 Retail Stocks Likely to Top Earnings Estimates

The earnings season, which is nearing its end, has been quite impressive this time around. However, the show is not over yet. With several retail behemoths including Walmart, Macy’s and Target, queued up to report their quarterly numbers, investors are likely to keep their eyes on the Retail-Wholesale sector’s progress card.

5 Retail Stocks Likely to Top Earnings EstimatesSource: Shutterstock

We note that the sector has gained 4.7% in a month, outdoing the S&P 500’s 2.1% growth. This can be attributable to a number of micro and macro factors, which have been viewed as positive signals for retailers’ upcoming results.

Retail on Growth Trajectory: Here’s Why

The recent uptick in consumer spending, which accounts for more than two-thirds of economic activity, bodes well. Incidentally, consumer spending inched up 0.4% in March, following 0.2% growth in January while remaining flat in February. This renewed momentum in March emerged from continued rise in income, indicating that consumers may drive economic growth in 2018. In fact, March retail sales advanced 0.6%, bearing testimony to this.

Apart from this, the sector is poised to gain from massive tax cuts and a robust labor market. Notably, the unemployment level that remained stable at 4.1% for six months till March, declined even further to 3.9% in April.

Turning to micro factors, companies in this space are also expected to gain from aggressive omni-channel efforts to keep pace with the changing consumer shopping patterns. To this end, retail players’ solid e-commerce endeavors, compelling pricing strategy, promotional activities, and efforts to strengthen portfolio and enhancing stores experience remain major drivers.

Surely, these strategic investments are eating a portion of margins but retailers are playing smart by undertaking stringent cost-cutting and restructuring activities.

Notably, total earnings of the S&P 500 retailers that have already reported results increased 26.1%, on the back of 14.9% jump in revenues, per the latest Earnings Preview. Well, about half of the retailers in the S&P 500 index released their quarterly outcomes, with 68.4% topping bottom-line estimates and 63.2% delivering positive revenue surprise.

Given the favorable backdrop, the sector is likely to catch investors’ attention. So, picking stocks that are likely to trump estimates can fetch handsome returns. This is because a stock generally picks up steam on earnings beat.

Picking the Prospective Winners for the Season

That said, let’s take a look at some gems in this space that look promising on the earnings front. These stocks carry a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP.  Well, our research shows that chances of a positive earnings surprise of stocks with this combination is as high as 70%. Clearly, adding these potential winners is the one of the best investment strategies.

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5 Retail Stocks Likely to Top Earnings Estimates: Kroger Co (KR)

Kroger Co (NYSE:KR), one of the largest grocery retailers, is a solid bet. The stock carries a Zacks Rank #3 and has an Earnings ESP of +4.99%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 64 cents per share, reflecting year-over-year growth of 10.3%. Further, this estimate has gone up in the past 30 days.

This Cincinnati, OH-based company delivered an average positive earnings surprise of 2.3% in the trailing four quarters. Its long-term earnings growth rate is 5.9%. The company is slated to report results on Jun 21.

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5 Retail Stocks Likely to Top Earnings Estimates: Macy’s Inc (M)

Investors can also count on Macy’s Inc (NYSE:M), one of the leading department store retailers in the United States. The company has an Earnings ESP of +4.50% and a Zacks Rank #3.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 40 cents, which shows significant growth from the year-ago period. Also, this estimate has risen 4 cents from 36 cents over the past 30 days.

This Cincinnati, OH-based company has registered positive earnings surprise in the past three quarters and has a long-term earnings growth rate of 8.5%. The company is scheduled to report results on May 16.

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5 Retail Stocks Likely to Top Earnings Estimates: Dollar General Corp. (DG)

We also suggest investing in Dollar General Corp. (NYSE:DG), one of the largest discount retailers in the United States. The company has a Zacks Rank #2 and an Earnings ESP of +1.38%.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at $1.40 per share, reflecting year-over-year growth of 35.9% and an uptrend in the past 30 days.

This Goodlettsville, TN-based company delivered in-line earnings in the last reported quarter, while it topped the consensus mark in the preceding three quarters. The company with a long-term earnings growth rate of 14.6% is expected to report results on Jun 7.

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5 Retail Stocks Likely to Top Earnings Estimates:

Ross Stores, Inc. (NASDAQ:ROST), an off-price retailer of apparel and home accessories in the United States, also looks promising.

The company carries a Zacks Rank #3 and has an Earnings ESP of +0.94%. The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at $1.06 per share, reflecting year-over-year growth of 29.3%.

Estimates for the quarter have remained stable in the past 30 days. This Pleasanton, CA-based company registered average positive earnings surprise of 6.1% in the trailing four quarters and has a long-term earnings growth rate of 10%. The company is slated to report results on May 24.

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5 Retail Stocks Likely to Top Earnings Estimates: Urban Outfitters, Inc. (URBN)

Last but not least, Urban Outfitters, Inc. (NASDAQ:URBN) has a Zacks Rank #2 and an Earnings ESP of +1.72%. The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 30 cents a share, reflecting year-over-year increase of more than 100%.

Notably, the consensus mark also rose a notch from 29 cents in the past 30 days. This Philadelphia, PA-based lifestyle specialty retailer, which offers fashion apparel and accessories, footwear, home décor and gifts products, has registered an average positive earnings surprise of 8.5% in the trailing four quarters.

The company has a long-term earnings growth rate of 12%. It is scheduled to report results on May 22.

More Stock News: This Is Bigger than the iPhone!                   

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don’t buy now, you may kick yourself in 2020.

Click here for the 6 t

5 Retail Stocks Likely to Top Earnings Estimates

The earnings season, which is nearing its end, has been quite impressive this time around. However, the show is not over yet. With several retail behemoths including Walmart, Macy’s and Target, queued up to report their quarterly numbers, investors are likely to keep their eyes on the Retail-Wholesale sector’s progress card.

5 Retail Stocks Likely to Top Earnings EstimatesSource: Shutterstock

We note that the sector has gained 4.7% in a month, outdoing the S&P 500’s 2.1% growth. This can be attributable to a number of micro and macro factors, which have been viewed as positive signals for retailers’ upcoming results.

Retail on Growth Trajectory: Here’s Why

The recent uptick in consumer spending, which accounts for more than two-thirds of economic activity, bodes well. Incidentally, consumer spending inched up 0.4% in March, following 0.2% growth in January while remaining flat in February. This renewed momentum in March emerged from continued rise in income, indicating that consumers may drive economic growth in 2018. In fact, March retail sales advanced 0.6%, bearing testimony to this.

Apart from this, the sector is poised to gain from massive tax cuts and a robust labor market. Notably, the unemployment level that remained stable at 4.1% for six months till March, declined even further to 3.9% in April.

Turning to micro factors, companies in this space are also expected to gain from aggressive omni-channel efforts to keep pace with the changing consumer shopping patterns. To this end, retail players’ solid e-commerce endeavors, compelling pricing strategy, promotional activities, and efforts to strengthen portfolio and enhancing stores experience remain major drivers.

Surely, these strategic investments are eating a portion of margins but retailers are playing smart by undertaking stringent cost-cutting and restructuring activities.

Notably, total earnings of the S&P 500 retailers that have already reported results increased 26.1%, on the back of 14.9% jump in revenues, per the latest Earnings Preview. Well, about half of the retailers in the S&P 500 index released their quarterly outcomes, with 68.4% topping bottom-line estimates and 63.2% delivering positive revenue surprise.

Given the favorable backdrop, the sector is likely to catch investors’ attention. So, picking stocks that are likely to trump estimates can fetch handsome returns. This is because a stock generally picks up steam on earnings beat.

Picking the Prospective Winners for the Season

That said, let’s take a look at some gems in this space that look promising on the earnings front. These stocks carry a favorable Zacks Rank – Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP.  Well, our research shows that chances of a positive earnings surprise of stocks with this combination is as high as 70%. Clearly, adding these potential winners is the one of the best investment strategies.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Kroger Co (KR)

Kroger Co (NYSE:KR), one of the largest grocery retailers, is a solid bet. The stock carries a Zacks Rank #3 and has an Earnings ESP of +4.99%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 64 cents per share, reflecting year-over-year growth of 10.3%. Further, this estimate has gone up in the past 30 days.

This Cincinnati, OH-based company delivered an average positive earnings surprise of 2.3% in the trailing four quarters. Its long-term earnings growth rate is 5.9%. The company is slated to report results on Jun 21.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Macy’s Inc (M)

Investors can also count on Macy’s Inc (NYSE:M), one of the leading department store retailers in the United States. The company has an Earnings ESP of +4.50% and a Zacks Rank #3.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 40 cents, which shows significant growth from the year-ago period. Also, this estimate has risen 4 cents from 36 cents over the past 30 days.

This Cincinnati, OH-based company has registered positive earnings surprise in the past three quarters and has a long-term earnings growth rate of 8.5%. The company is scheduled to report results on May 16.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Dollar General Corp. (DG)

We also suggest investing in Dollar General Corp. (NYSE:DG), one of the largest discount retailers in the United States. The company has a Zacks Rank #2 and an Earnings ESP of +1.38%.

The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at $1.40 per share, reflecting year-over-year growth of 35.9% and an uptrend in the past 30 days.

This Goodlettsville, TN-based company delivered in-line earnings in the last reported quarter, while it topped the consensus mark in the preceding three quarters. The company with a long-term earnings growth rate of 14.6% is expected to report results on Jun 7.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates:

Ross Stores, Inc. (NASDAQ:ROST), an off-price retailer of apparel and home accessories in the United States, also looks promising.

The company carries a Zacks Rank #3 and has an Earnings ESP of +0.94%. The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at $1.06 per share, reflecting year-over-year growth of 29.3%.

Estimates for the quarter have remained stable in the past 30 days. This Pleasanton, CA-based company registered average positive earnings surprise of 6.1% in the trailing four quarters and has a long-term earnings growth rate of 10%. The company is slated to report results on May 24.

Compare Brokers

5 Retail Stocks Likely to Top Earnings Estimates: Urban Outfitters, Inc. (URBN)

Last but not least, Urban Outfitters, Inc. (NASDAQ:URBN) has a Zacks Rank #2 and an Earnings ESP of +1.72%. The Zacks Consensus Estimate for first-quarter fiscal 2018 is pegged at 30 cents a share, reflecting year-over-year increase of more than 100%.

Notably, the consensus mark also rose a notch from 29 cents in the past 30 days. This Philadelphia, PA-based lifestyle specialty retailer, which offers fashion apparel and accessories, footwear, home décor and gifts products, has registered an average positive earnings surprise of 8.5% in the trailing four quarters.

The company has a long-term earnings growth rate of 12%. It is scheduled to report results on May 22.

More Stock News: This Is Bigger than the iPhone!                   

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don’t buy now, you may kick yourself in 2020.

Click here for the 6 t