China Weak Hermès Demand, Siemens Energy Rises, Sainsbury Outlook

On this episode of Stock Movers:
- Hermès’ sales at the start of the year were hurt by a slowdown in Chinese demand, showing that even the most resilient purveyor of high-end goods wasn’t spared the slump in the luxury industry there. First-quarter sales in Asia Pacific excluding Japan rose 1.2% at constant exchange rates, Hermès International SCA said in a statement Thursday, below the 4% gain analysts had expected. Total sales in the period reached €4.1 billion ($4.7 billion), with the 7.2% growth falling slightly shy of analysts’ estimates. Shares slid as much as 4.2% in early Paris trading.
- Siemens Energy AG shares surged after the company substantially raised its revenue and net income outlook for the fiscal year, citing demand for gas turbines, gas services and electricity products. The German manufacturer expects comparable revenue to grow as much as 15% this fiscal year through September, up from as much as 10% previously, the company said in a Wednesday pre-releasing quarterly earnings. Net income will rise to as much as €1 billion, up from a previous about break-even guidance.
- J Sainsbury Plc expects profits to be little changed this year as higher costs and intense competition put pressure on supermarket groups. Britain’s second-largest grocer forecast underlying operating profit from retail of about £1 billion ($1.3 billion), around the same level as last year. It’s the first time Sainsbury’s has reached that mark, although its Argos brand weighed on the performance.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:08):
The Stock Movers podcast, your roundup of companies making moves
in the stock market, harnessing the power of Bloomberg data.

Speaker 3 (00:18):
Let's have a look at some of the other stocks
that are on the move today. In up we are
joined by our Equities report to Joe Easton to look
at those stocks moving in Europe. Good to have you
handbags at dawn. For the luxury sector today, we had
the results out from Ames, but actually it was a
bit of a battle. It does look like it's been
a bit of a battle to get those sales in,

(00:39):
hasn't it.

Speaker 1 (00:40):
Yeah, so Ame is actually giving a surprising miss on
the quarterly sales numbers. Quarterly sales are out or around
around one percentage point. Struggle to get my words out there,
missing expectations from analysts. However, bear in mind that this
is a company that sells around sixteen billion euros worth
of luck goods per year, so not too bad. But

(01:03):
those burken bags just kind of missing the very high
end of expectations. I was on their website earlier. Some
of those bags selling for about eighty grand apiece, so
it's kind of not you don't just pop down to
the shop for one. I think it's you and I don't.
Well no, but I think, says the big news earlier
the week. Early in the week of course, becoming the

(01:23):
biggest European luxury goods company, overtaking LVMH after Elvimh's disappointing
numbers and it's just about clinging on to that spot
at the moment, but missing expectations and down four percent.

Speaker 3 (01:36):
Zeeman's Energy is what is the best performer at the
start of European trading. Shares have been very active this morning.

Speaker 1 (01:43):
Why so the company reporting really strong margins in both
its wind turbine and grid business of stock jumping eleven
percent at the moment by far the biggest move on
these stock six hundreds day now that takes it's one
year gain to around two hundred and sixty percent. Now,
the company had a really tough start to its life
when it was spun out of Semens, the conglomerate Semens,

(02:06):
but it has actually recovered a lot of that was
due to some issues in the US with some projects,
but really rallied from the lows over the past year.
Adding to that at the moment and also their electric
grid business. The traditional business is alongside the renewables doing
well as well, So Semens Energy best performing stock today and.

Speaker 3 (02:25):
Let's check out Sainsbury's, the UK retailer. Of course, they
delivered on results.

Speaker 1 (02:32):
So Sainsbury's, they have kind of beaten some of the
low end of expectations, so that this was a report
that was expected to be weak because a few weeks
ago we had an update from Asda, which is privately
held of course, but that was basically a profit warning.
They said that there's too much competition in supermarkets. Then
we had Tesco saying the same thing, saying that competition

(02:54):
really stepped up from Liddle, Audi and all the other
main players. So this was expected to be weak and
it is actually very weak. Sainsbury's basically saying they aren't
going to see any profit growth at all in the
year ahead. However, this was already priced into the stock
actually gaining around three percent. Sainsbury's also going to buy
back two hundred million pounds of shares and issue a

(03:15):
two hundred and fifty million pounds special dividend, so that
kind of probably being done to appease those investors that
aren't going to see much profit growth. Over the next year.

Speaker 2 (03:26):
The Stock Movers podcast from Bloomberg Radio. Check back with
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