The Wall Street Journal - 22.08.2019

B2| Thursday, August 22, 2019 ** THE WALL STREET JOURNAL.**

INDEX TO BUSINESSES

These indexes cite notable references to most parent companies and businesspeople
in today’s edition. Articles on regional page inserts aren’t cited in these indexes.

A

Aflac............................B6
Alibaba Group Holding
............................... B1,B3
Alliance Resource
Partners....................B6
Alphabet......................B4
Amazon.com...............B3
Amgen.........................B1
Angel Oak Mortgage
Solutions..................A3
Apple...........................B1
AT&T............................B1

B

Bank of America.........B4
Bayer.........................B12
Bayerische Motoren
Werke........................B3
BMW...........................B3
BNP Paribas................A7
Brunswick..................B12

C

Charter Communications
.....................................B1
Cisco Systems.......B1,B6
Citigroup.....................A7
Comcast.......................B1
Consol Energy.............B6
Corteva Agriscience..B12
Cowen..........................B2

D-E

DuPont de Nemours.B12
eBay.............................B3

eCommunity................B3

Elanco Animal Health

...................................B12

Expedia Group.............B6

F

Fiat Chrysler

Automobiles.............B3

Ford Motor..................B3

Foresight Energy........B6

G

General Motors...........B3

Glass Lewis.................B1

H

Home Depot..............B12

Honda Motor...............B3

Huawei Technologies.A7

I

Institutional

Shareholder Services

.....................................B1

J

Japan Post Holdings..B6

J.C. Penney..................B1

Jumia Technologies....B3

K

Kia Motors..................B3

Kohl's...........................B2

L

L Brands......................B2

Lowe's..........B1,B11,B12

M

Macy's..................B1,B12

Microsoft.....................B4

MTN Group..................B3

Murray Energy............B6

N

Netflix.........................B4

Nordstrom...................B1

P

Peabody Energy..........B6

Pernod Ricard..............B3

Pfizer.........................B12

R

RDM Financial Group.B2

Rosatom......................A9

Royal Bank of Canada

...................................B10

S

Skycom Tech...............A7

T

Takeda Pharmaceutical

...................................B12

Target...........B1,B11,B12

Textio...........................B6

ThredUP.......................B2

TJX...............................B1

V

Volkswagen.................B3

W

Walmart...............B1,B12

Wolverine Fuels..........B6

INDEX TO PEOPLE

BUSINESS & FINANCE

called declines notable.

Technology companies,

which accounted for more

than a third of the buybacks in

the second quarter, spent

roughly $52 billion, down 23%

from the first three months of

the year and 18% from last

year. Apple, the biggest

spender among companies in

the S&P 500, slowed purchases

to $18.15 billion from $23.81

billion in the first quarter.

Networking-equipment

maker Cisco has also pulled

back. “We’re going to get back

down to our normal strategy,

which is being very opportu-

nistic when our stock’s

down...and buying, but really

balancing between both the

dividend and the buyback to

be at least 50% of our free

cash flow,” Kelly Kramer,

Cisco’s chief financial officer,

said on the company’s earn-

ings call last week.

Cisco shares are up 13% in

2019 but have slumped 12% in

August after the company cut

its growth forecast, partly be-

cause of weakness in China.

Apple, meanwhile, has

surged 35% this year and is es-

sentially flat for the month.

Buybacks have faced oppo-

sition on Capitol Hill. Demo-

cratic presidential candidates

have signaled that they want

to restrict how much stock

U.S. companies can buy back,

arguing that buybacks enrich

shareholders at the expense of

workers. And Republican Sen.

Marco Rubio of Florida un-

veiled a proposal this year to

change how investors are

taxed when companies buy

back shares.

on buybacks in the second
quarter, but all three slowed
spending from the first quar-
ter and year over year.
“Given the greater uncer-
tainty in terms of trade,
weaker growth overseas and
the potential for an economic
slowdown in the U.S., I
wouldn’t be surprised to see
companies hold on to more
cash over the next several
months,” said Michael Shel-
don, chief investment officer
of RDM Financial Group at
HighTower.
Despite spurts of volatility,
the S&P 500 is still up 17% for
the year—and within 4% of
last month’s record high.
Companies and investors
often cheer share repurchases
because they boost per-share
earnings and often stock
prices. But others argue those
funds are better spent on
long-term investment projects,
such as building factories or
on research and development.
Corporate capital expendi-
tures have slowed this year,
adding to worries that eco-
nomic growth is fading. Many
executives have said the lin-
gering trade tensions with
China are giving them pause.
ThelatestdatafromS&PDow
Jones Indices indicate capital

Continued from the prior page

Companies

Scale Back

Buybacks

expenditures picked up in the

second quarter, improving

5.2% from the first three

months of the year but still

7.8% below the boom seen at

the end of last year.

The willingness among

companies to buy back their

shares has been among the

biggest driving forces of the

decadelong bull market. Since

2013, U.S. companies have

poured $4.2 trillion into stock

buybacks, according to Bank of

America Merrill Lynch. Inves-

tors, though, haven’t shown

the same enthusiasm for

stocks. Mutual funds and ex-

change-traded funds tracking

U.S. equities have posted $84

billion in outflows over the

same period, according to the

bank’s analysis of EPFR Global

data.

Corporate buybacks

boomed after the U.S. tax

overhaul in December 2017,

with every quarter in 2018

marking a new high for share

repurchases. The recent easing

in activity has some analysts

and investors questioning

whether the shift marks a re-

turn to the norm, or if compa-

nies are pulling back the reins

for other reasons.

“The sugar high might have

subsided for buybacks,” said

Howard Silverblatt, senior in-

dex analyst at S&P Dow Jones

Indices. “The third quarter

will be telling regarding how

companies reacted to more

market volatility and uncer-

tainty.”

The pullback in spending

was broad across industries:

Six of the 10 companies that

spent the most on buybacks in

the second quarter reduced

spending from the first three

months of the year. Some ana-

lysts said that seasonality

could be a factor but still

Apple slowed quarterly purchases of its shares to $18.15 billion.

QILAI SHEN/BLOOMBERG NEWS

B

Bader, Rupert..............B6

C

Chen, Oliver................B2

D

Dattner, Gil.................B3

F

Foss, Aaron.................B4

G

Gallo, Alberto............B11
Garr, Ethan..................B4
Gennette, Jeff............B2
Grant, R.J..................B11
Grom, Chuck................B1

H

Hansson, David
Heinemeier...............B6
Herrman, Ernie...........B1

I

Iannelli, Andrea........B11

K

Kahn, Jeff...................B6

Kopf, Christian..........B11

Kramer, Kelly..............B2

Kurland, Ben...............B1

L

Longinaker, Will.........A3

M

Ma, Jack......................B6

Martin, Thomas........B11

McAlister, Gerald........B4

McKay, Dave.............B10

Medeiros, Gustavo...B11

P

Phillips, Jason.............B6

Poignonnec, Sacha......B3

R

Retelny, Gary..............B1

Ronan, Piers..............B11

S

Sasson, Leon...............B6

Saunders, Neil............B2

Sheldon, Michael........B2

Silverblatt, Howard....B2

Sita, Leslie................B11

Smith, Brett................B3

Snyder, Kieran.............B6

T

Tomé, Carol...............B12

W

Weber, Andy...............A3

Wexner, Leslie............B2

Z

Zigdon, Nir..................B3

L Brands Inc.’s revenue fell

in its latest quarter as sales

at the retailer’s embattled

flagship Victoria’s Secret

chain declined further.

The Columbus, Ohio, re-

tailer reported net sales of

$2.9 billion for its second

quarter, compared with $2.98

billion a year earlier. Analysts

polled by FactSet predicted

$2.95 billion in revenue.

Comparable sales, which

include digital and same-

store sales, decreased 1%

from a year earlier.

Victoria’s Secret sales fell

7% to $1.61 billion from a year

earlier, below the $1.67 bil-

lion analysts were expecting.

Victoria’s Secret has

posted four consecutive quar-

ters of year-over-year de-

clines in sales, as the com-

pany contends with increased

competition and changing

customer wants.

Overall, L Brands, which

also owns Bath & Body

Works, posted a profit of

$37.6 million, or 14 cents a

share, compared with $99

million, or 36 cents a share, a

year earlier.

The company reported ad-

justed earnings of 24 cents a

share. Analysts polled by

FactSet were expecting earn-

ingsof20centsashare.

Sales of the company’s

Bath & Body Works’ unit

grew by 10% to $1.06 billion

from a year earlier.

Shares of L Brands fell

0.4% during after-hours trad-

ing. The company reaffirmed

its adjusted earnings outlook

for the year of between $2.30

and $2.60 a share.

The founder and chief ex-

ecutive of L Brands, Leslie

Wexner, has come under in-

creased scrutiny in recent

months for his ties to Jeffrey

Epstein, the disgraced finan-

cier who was indicted on fed-

eral sex-trafficking charges

stemming from an alleged

scheme to exploit underage

girls.

Mr. Epstein was Mr. Wex-

ner’s personal money man-

ager for about two decades.

Mr. Epstein had pleaded

not guilty in the case. He was

found dead in a Manhattan

jail cell Aug. 10, while await-

ing trial. A medical examiner

determined the cause of

death was suicide.

Mr. Wexner said this

month that his former money

manager misappropriated

more than $46 million of his

fortune, revealing for the

first time some of the finan-

cial fallout from their rela-

tionship.

L Brands’ board has also

hired an outside law firm to

conduct a review of Mr. Ep-

stein’s role at the company.

Meanwhile, L Brands said

this month that its longtime

chief marketing officer, Ed-

ward Razek, will step down

from his role, as the parent

company of Victoria’s Secret

faces backlash from consum-

ers about the unit’s market-

ing strategy.

In recent years, Victoria’s

Secret’s emphasis on images

of supermodels and padded

bras has alienated customers

and invited criticism that the

brand is out of touch.

Demand for the company’s

bras has cooled as customers

have turned to brands empha-

sizing comfort and inclusiv-

ity.

BYPATRICKTHOMAS

Victoria’s Secret Extends Slump

consecutive quarters—drove
the sales increase.
TJX stores rapidly turn over
limited quantities of goods at
bargain prices. The result is a
constant treasure hunt as
shoppers come back to ferret
out deals. There is no glut of
stock in the backroom. Cus-
tomers know if they don’t buy
it today, the item might not be
there tomorrow.
Nordstrom, on the other
hand, is suffering along with
other department stores as
shoppers make fewer visits to

Continued from the prior page

malls and buy more online.

Also, unlike Walmart and Tar-

get, department stores don’t

have large grocery offerings to

prompt frequent visits.

Nordstrom said on Wednes-

day that second-quarter net

sales fell 5.1% to $3.78 billion.

Profit fell to $141 million, from

$162 million in the year-earlier

period, and the company low-

ered earnings guidance for the

full fiscal year.

Nordstrom’s second-quarter

profit beat analysts’ estimates.

In after-hours trading, the

stock gained 12%.

Kohl’s Corp. is struggling

even though it has tried to

boost traffic by adding ser-

vices. Under a partnership

with Amazon.com Inc., shop-

pers can return items bought

on the e-commerce site to any

of Kohl’s more than 1,100 loca-

tions. Nevertheless, the re-

tailer’s sales fell for the third

consecutive quarter in the

most recent period, leaving it

with excess merchandise that

it had to mark down, hurting

profit.

Illustrating the retail divide,

Kohl’s shares have fallen 41%

over the past 12 months, while

Walmart’s stock is up 17%.

More than a decade after

the last recession, consumers

still remain “extremely focused

on getting value for the dol-

lar,” said Neil Saunders, a

managing director of Global-

Data PLC, a research firm. “A

lot of retailers haven’t added

that value, and consumers are

just going elsewhere.”

Even some higher-end

brands are performing poorly,

including Michael Kors and

Kate Spade, both of which re-

ported a drop in same-store

sales in their most recent

quarter.

They can’t blame weak con-

sumer spending and fears of a

possible recession. In July, re-

tail sales increased at their

strongest pace since March,

giving the economy a boost.

“The consumer is still

healthy,” Macy’s CEO Jeff Gen-

nette said in an interview last

week.

Other factors are upending

traditional retailers, from

higher rent and labor costs to

the rise in online shopping.

Department stores in particu-

lar are heavily dependent on

apparel that can be found al-

most everywhere, making it

easy for shoppers to compare

prices online.

Retailers also have to con-

tend with the Trump adminis-

tration’s tariffs on goods im-

ported from China, which are

pressuring profits.

Consumers’ love affair with

a good deal is evident in the

rise of thrift shopping, which

is on track to overtake sales of

fast fashion at the likes of

Zara and H&M within a de-

cade.

“If off-price chains like T.J.

Maxx wooed shoppers with

promises of 20% to 60% off

regular retail prices, resale

websites like thredUP offer

discounts of as much as 90%

off,” said Oliver Chen, an ana-

lyst at Cowen & Co. “That is

making it harder for tradi-

tional retailers.”

Macy’s and Penney are

jumping into the secondhand

market. Both unveiled partner-

ships last week with thredUP

Inc. to sell used clothing and

accessories in some of their

stores. Macy’s has also gotten

into the off-price game by

opening Macy’s Backstage dis-

count stores, which compete

with T.J. Maxx.

Macy’s last week lowered

its full-year earnings outlook

after it missed profit expecta-

tions, sending shares tum-

bling, while Penney said sales

at stores open at least a year

fell 9%.

Analysts say these stores

aren’t doing enough to adapt

to the changes in consumer

behavior.

“They are jumping on

someone else’s bandwagon,

rather than innovating,” Mr.

Saunders, of GlobalData, said.

“They are playing catch-up,

and that’s not good enough in

retailing today.”

L Brands’ flagship chain has seen sales drop for four straight quarters as it contends with increased competition and changing tastes.

JOHN TAGGART/BLOOMBERG NEWS

Nimble

Retailers

See Reward

Consumers remain

‘extremely focused

on getting value

for the dollar.’

Buy One ZVOX

Hearing Aid.

Get One Free!

Can’t hear conversations in noisy rooms? VoiceBuds®are

FDA registered hearing aids that use digital technology

designed to make voices clear. Most hearing devices use

one microphone. But VoiceBud hearing aids use a two-

microphone system to minimize background sounds while

clarifying the voices you want to hear. For a limited time

you can buy one hearing aid and get the second one free!

Quality hearing aids made affordable!

60-Day Home Trial | Free Shipping | Lifetime Tech Support

® ZVOX, AccuVoice & VoiceBud are registered trademarks of ZVOX Audio.

Helping People Hear Since 2003

Order at ZVOX.com or 800-956-5743

Get apairof ZVOX dual-microphone

hearing aids with app control for only$299.99!

 Directional microphones reduce background sound.

 Smartphone app for wireless control.

 American made electronic components.

 So small they are virtually invisible when worn.

 60 Day Money-Back Guarantee...Free Return Shipping.

$

299

99

FREE

OFFER ENDS LABOR DAY

REGISTERED

FDA