Bed Bath & Beyond is pledging to transform its business and make changes to its board of directors after a group of activist investors pressured the retailer.
Three activist funds last month said they built a roughly 5% stake in Bed Bath & Beyond. The activists nominated a full suite of 16 new board members and planned to recruit a new CEO.
On Wednesday, Bed Bath & Beyond said it would nominate a new lead director to its board and revamp its corporate governance structure. It plans to announce additional changes to the board in the future.
That news came as the company reported earnings. During its most recent quarter ending in March, Bed Bath & Beyond’s sales at stores open at least a year fell 1.4% compared with the year earlier. The retailer lost money during the quarter, too.
The company said it would continue to reduce clutter from its stores, build out its private-label brands and introduce lower-priced products.
Shares of Bed Bath & Beyond (BBBY) fell more than 7% during after-hours trading Wednesday.
US equities ended Wednesday’s session slightly higher.
Wall Street largely shrugged off minutes from last month’s Federal Reserve meeting, which showed the central bank acknowledged the threat of a global growth slowdown and didn’t anticipate an interest rate hike this year.
In individual stocks, ride-sharing company Lyft (LYFT) dropped 11% amid competitor Uber’s intention to file for an initial public offering. Social media company Snap (SNAP) closed down nearly 3% after a report downgraded its user growth.
Bed Bath & Beyond (BBBY) reports after the bell.
CEOs of major US banks stressed the importance of the Federal Reserve’s independence and integrity during a House Financial Committee meeting on Wednesday.
Their remarks come amid discussion about Donald Trump’s pick for the Fed board, Stephen Moore. Moore is widely considered an atypical choice given his views on the central bank and Fed President Jerome Powell.
While some of the CEOs acknowledged that Moore wasn’t a traditional nominee, they also said they had faith in the central bank’s confirmation process.
JPMorgan (JPM) CEO Jamie Dimon got some tough questions on income inequality during Wednesday’s House Financial Committee hearing. Rep. Katie Porter claimed that a single parent in a starting job at JPMorgan couldn’t make ends meet on a minimum wage salary of around $16. Dimon responded that the bank provides good benefits. Porter said Dimon didn’t have an answer.
Earlier in the hearing, Dimon defended corporate tax cuts and comments he previously made about income inequality.
Rep. Nydia Velázquez asked Dimon if he could “see why so many Americans find your income inequality comments disingenuous” given that corporate tax cuts don’t expire like personal tax cuts.
Dimon responded that the corporate tax cuts were designed to make US corporations more competitive on a global scale and that “this group pays their employees quite well.”
JPMorgan last year raised the minimum wage it pays its employees to $15-$18 depending on location.
On Monday, Bank of America (BAC) said it would raise its minimum wage to $20 over the next two years.
YouTube TV is hiking its price to $49.99 per month from $40 per month, the Google-owned streaming service said in a release.
When YouTube TV launched in April 2017, it cost $35 per month. The price was increased one year later to $40 per month — today’s price hike represents a 25% increase.
Subscribers who pay through Apple will see an even bigger fee, and will now pay $54.99 per month. That’s an increase of $15 per month.
New subscribers will get the new price immediately, while current users will see the prices in mid-May. YouTube TV also announced it was adding Discovery-owned networks, including HGTV, Food Network, and TLC.
Earnings are expected to slip in the first quarter, but most think they’ll rebound throughout the rest of the year.
Not Greg Boutle of BNP Paribas, though, who told Alison Kosik on CNN Business’ Markets Now live show that he expects earnings to remain weak this year.
So where should you put your money?
Is there anything for investors to be concerned about?
Not much, Peter Tuchman, floor broker with Quattro M Securities, told Alison Kosik on CNN Business’ Markets Now live show.
Meanwhile, the S&P 500 is “super strong,” and stocks remain the best place to invest, Tuchman said.
“I think the market tells you what it really believes. There’s nothing automatic pilot about this. At the end of the year a lot of people bailed, so they’re still playing catchup. But you’ve got fundamentals that are OK.”
Big bank CEOs were put on the spot during the House Financial Committee hearing. Texas Democratic Rep. Al Green asked whether they thought their successors would be a woman or a person of color. None of the executives, hailing from the likes of Bank of America (BAC), Citi (C) and JPMorgan (JPM), said yes.
Green then added the qualified “in the next decade” to his question, upon which five of the seven CEOs affirmed. The exceptions: JPMorgan’s Jamie Dimon and Morgan Stanley’s (MS) James Gorman.
The CEOs of major banks overwhelmingly named cybersecurity and a slowing of global growth as the financial industry’s biggest risk factors for the future.
JPMorgan’s (JPM) Jamie Dimon also said that the growing non-bank segment was worth monitoring, although it wasn’t a systemic risk yet. Goldman Sachs (GS) chief executive David Solomon also added US-China relations to the risk factors.
Citigoup (C) CEO Michael Corbat diverted from his peers and said talking “ourselves into the next recession” was the biggest risk.
The CEOs are testifying before the House Financial Committee in a hearing on accountability of megabanks.
Stocks are mixed as the markets await notes from last month’s Federal Reserve meeting:
Here’s a check of the some stocks:
Former Goldman Sachs (GS) CEO Lloyd Blankfein clearly spent Wednesday morning watching his successor David Solomon and other bank CEOs testify before the House Financial Committee hearing on the accountability of big banks.
Blankfein retired in summer last year, after a 12-year stint at the helm of the investment bank.
Lyft (LYFT) shares are down more than 5% today:
Reuters reported late Tuesday that rival Uber could file for its IPO as early as tomorrow.
Our Paul R. La Monica called the Lyft sell-off “silly” in a tweet:
The CEOs of the likes of Citi (C), Bank of America (BAC) and Goldman Sachs (GS) said in comments made during a House Financial Committee hearing that the possibility of a hard, no-deal Brexit would pose a challenge but not a systemic risk.
At present, the UK is scheduled to leave the European Union on Friday, April 12, without a deal governing its future trade relationship with Brussels. The initial Brexit date was meant to be March 29, before Britain secured a first delay.
EU members are set to meet for an emergency summit to decide whether to offer a further delay, while UK Prime Minister Theresa May is expected to ask for a delay until June 30.
T-Mobile’s attempt to disrupt the cable industry is being rebranded: It’s ditching the Layer3 name for TVision.
The company announced an update to its cable TV-killer, which includes a cable-like box to use the service.
TVision will initially cost $90 per month and include more than 150 cable channels, local affiliates, a DVR and 35,00 on-demand video titles. It will only be available in 8 US cities for now, including New York and Los Angeles.
T-Mobile bought Layer3, a video service startup, in 2017 to eventually build a “disruptive new TV service.” The launch has been plagued with delays.
HSBC has downgraded Apple’s stock to “reduce,” which is basically a sell, because the bank isn’t fully convinced about the tech company’s new focus on selling services. TApple is attempting to diversify its revenue as iPhone sales slow.
Apple (AAPL) announced a batch of new services at a splashy event last month, including new pay-TV shows, a credit card, a news subscription product and a gaming platform.
HSBC analyst Erwan Rambourg wrote in a note to clients that he doesn’t think these products will attract new customers. He added:
Apple’s stock is slightly lower in early trading. It’s up more than 25% for the year.
US stocks opened flat Wednesday.
The Dow rose 25 points, and the S&P 500 and Nasdaq each rose 0.1%.
Delta (DAL) shares rose 1.3% after the airline reported surprisingly strong earnings.
Apple (AAPL) fell slightly after an HSBC analyst downgraded the stock on iPhone sales weakness.
US stocks drifted higher as investors were digesting March consumer price inflation data, which rose 0.4% on the month and 1.9% year-over-year. The Federal Reserve will publish the minutes of its March meeting at 2 p.m. Eastern.
In individual equities, airlines remain in focus following Delta’s earnings before the bell. Major bank CEOs are meanwhile are getting questioned by the House Financial Committee in a hearing on accountability in the financial services industry.
Consumer prices for US shoppers increased by 0.4% in March, according to a new report from the Labor Department.
Our Paul R. La Monica says he doesn’t expect the markets to be affected by the newly released Consumer Price Index:
CEOs of major banks including JP Morgan (JPM), Bank of America (BAC), Morgan Stanley (MS) and Goldman Sachs (GS) are about to face some tough questions from the House Financial Services Committee, as a hearing on holding megabanks accountable is kicking off in Washington.
Other than Wells Fargo (WFG), which was before the committee in March, all major financial institutions are represented in Wednesday’s hearing, chaired by Maxine Waters.
Ford (F) has named Jim Farley, who had been one of the top executives of Ford’s global operations, as president of New Businesses, Technology & Strategy. He’ll concentrate on the development of the next generation of cars and trucks.
Farley had previously been president of global markets, overseeing Ford’s business units around the world, as well as its Lincoln luxury brand. His new position is effective May 1.
In his new job Farley also will be responsible for the automaker’s partnerships, including its growing alliance with Volkswagen. Farley will take over duties of Marcy Klevorn, who had been president of Ford’s Mobility unit, and who is retiring in October.
General Motors (GM) made a similar executive move last November when it named Dan Ammann, who had been GM president, as CEO of Cruise, its new vehicle unit.
Joe Hinrichs who had been president of Ford’s global operations, including its manufacturing, will now assume many of Farley’s former duties and take the title of president of automotive at Ford.
Ford is in the middle of an $11 billion transformation plan designed to free up resources to make the company competitive as the industry changes. Automakers are scrambling to design self-driving and electric vehicles, and to provide ride hailing services to customers rather than simply sell them vehicles.
Delta beat expectations for its first-quarter earnings, in part thanks to a slower-than-expected increase in fuel costs.
CEO Ed Bastian said on CNBC that the impact from not having any 737 Max planes —which were grounded following two fatal crashes — was, nevertheless, minimal and that it had little impact on Delta’s market share. Bastian added that he had ultimate confidence in Boeing.
Delta’s total revenues climbed 5% to $10.5 billion between January and March, exceeding analyst expectations. Earnings per share were $0.96. For the quarter ending in June, the airline is forecasting 6% to 8% revenue growth and $2.05 earnings per share.
Delta (DAL) shares bounced 2.6% higher in premarket trading.
