The Wall Street Journal - 16.08.2019

B2| Friday, August 16, 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

Activision Blizzard....B

Alibaba Group......B3,B

Alphabet......................B

Altria Group................A

Amazon.com

........... A8,B2,B4,B10,B

Apple.........................B

AT&T............................A

AutoNation.................B

AutoTech Ventures.....B

B

Baidu.........................B

Beijing TuSimple Future

Technology................B

Blackstone Group.....B

Bloomberg.................B

BMW...........................A

Briggs & Stratton.......B

British American

Tobacco.....................A

Buffalo Wild Wings..B

C

CapitalG.....................B

Capital One Financial

............................... A8,B

Care.com..............B3,B

CarMax........................A

Caterpillar...................A

Cboe Global MarketsB

Chevron.....................B

Cisco Systems.....A1,B

Colgate-Palmolive.......A

CopperING...................A

D

Daimler........................A

Deckers Outdoor.......B

DoubleVerify...............A

E

Eastman Chemical......A

Electronic Arts..........B

ElringKlinger...............A

Embark Trucks............B

Engine Capital.....B3,B

Exxon Mobil..............B

F

Facebook.....................A

Fidelity Investments

...............................A1,A

Foot Locker.................B

G

Gannett.......................A

Gap..............................B

Gehring Technologies.A

General Electric...B1,B

Goldman Sachs GroupB

Group 1 Automotive...B

GroupM.......................A

H-I

Home Depot.........B1,B

Huawei TechnologiesB

IAC/InterActiveCorp. B

Integral Ad Science....A

J-K

J.C. Penney............B1,B

Kraft Heinz...............B

L

Lowe's..................B1,B

M

MacAndrews & Forbes

Holdings....................B

Macy's..............A1,B1,B

Mahle..........................A

Marcato Capital

Management...........B

McDonald's.................A

Microsoft...................B

Mondelez International

...................................B

N

Nordstrom...................B

Novartis......................A

Nvidia..........................B

O

Omnicom Group..........A

OpenSlate...................A

P

Peloton Technology....B

Penske Automotive

Group.........................B

Pershing Square Capital

Management...........B

Publicis Groupe...........A

R

Ralph Lauren...............B

RealReal......................A

Revlon.........................B

Reynolds American....A

Robert Bosch Stiftung

.....................................A

S

Samsung ElectronicsB

Sony...........................B

Sotheby's..................B

Starsky Robotics........B

T

Take-Two Interactive

Software.................B

Tapestry.................B2,B

Target...................B1,B

Tencent Holdings......B

Terex..........................B

The We Company.......B

ThredUp.......................B

3M...............................A

Tiffany.........................B

Toyota Motor..............A

U

United Parcel Service.B

V-W

Vanguard Group........B

Volkswagen.................A

Walmart

........... A2,B1,B2,B11,B

INDEX TO PEOPLE

BUSINESS & FINANCE

concerns about the impact of

the U.S. trade fight with China

ahead of the holiday shopping

season. On Tuesday, the Trump

administration suspended

plans to impose new tariffs on

about $156 billion in goods

from China until Dec. 15. The

tariffs on such items as toys,

cellphones and laptop comput-

ers had been set to take effect

Sept. 1. Import duties on about

$13.7 billion of Chinese fabrics

and apparel were postponed

until the end of the year, but

tariffs will still move forward

on about $39 billion of such

items.

Walmart finance chief Brett

Biggs said the retailer has fac-

tored the administration’s sus-

pension of tariffs into its full-

year guidance, though he didn’t

break down details.

September tariffs will still

hit “apparel and TVs, which are

decent size categories for us,”

Mr. Biggs said in an interview.

But the delay “makes it a little

more manageable,” he said.

On Thursday, Walmart for

the first time provided details

on its gun business. In a state-

ment, Mr. McMillon said the

company accounts for about

2% of firearms sales and 20%

of ammunition sales in the U.S.,

“which we believe places us

outside at least the top three

sellers in the industry.”

The massacre at a Walmart

store in El Paso, Texas, this

month sparked new calls from

some company employees and

gun-control activists for the

chain to stop selling firearms.

Mr. McMillon reiterated a

previous statement from the

nation’s largest retailer and

private employer that it is

thinking through broader is-

sues related to gun violence.

“We will strive to use these ex-

periences to identify additional

actions we can take to

strengthen our processes, im-

prove our technology and cre-

ate an even safer environment

in our stores.”

He said Walmart supports

strengthening background

checks for gun purchases and

believes the reauthorization of

the assault-weapons ban

“should be debated to deter-

mine its effectiveness.”

tives as Jetblack, a New York

service that offers text-based

buying and same-day shipping

to members paying $600 a

year.

Walmart’s U.S. stores remain

the primary driver of sales and

profit for the retailer, while its

U.S. e-commerce business is

still unprofitable.

Retail chains have expressed

Continued from the prior page

Walmart

Adds to

Its Streak

U.S. stores, like this Supercenter in Rosemead, Calif., remain the primary driver of sales and profit for the retailer.

FREDERIC J. BROWN/AGENCE FRANCE-PRESSE/GETTY IMAGES

A

Ackman, William......B

Ajdler, Arnaud.............B

B

Bell, George..............B

C

Castelli, Alex...............B

Cook, Christine...........A

Creutz, Doug.............B

Culp, Larry...................B

F

Fairbank, Richard......B

Favreau, Brad..............B

Feygin, Ilya..................B

G

Gave, Charles............B

H

Hewat, Nick................A

Hoffer, Dan.................B

J

Johnson, Michael......B

Jominy, Tyson.............B

Juenger, Todd............B

K

Khan, Cavel.................A

Kuntz, Michael............A

L

Luis, Victor..................B

M

Ma, Jack......................B

Marcelo, Sheila....B3,B

Markopolos, Harry

............................. B1,B

Maroone, Mike............B

McGuire, Richard “Mick”

...................................B

McMillon, Doug...........B

Montgomery, John.....A

N

Neumann, Adam.........B

P

Perelman, Ron............B

Price, Chuck................B

S

Sandven, Terry..........B

Saunders, Neil............B

Soltau, Jill...................B

Sutton, Melissa..........A

W

Wiggs, Justin............B

J.C. PenneyCo.’s sales fell

9% in the latest quarter and

the retailer said it would start

selling secondhand clothes as

part of a broader effort to

transform itself.

The Plano, Texas-based

chain has been reeling from

years of changes in its leader-

ship and strategic direction.

Penney Chief Executive Jill

Soltau, who joined the com-

pany in October, said the tur-

moil had eroded the com-

pany’s basic retail practices.

“We are not simply running

a business, we are rebuilding a

business,” she told analysts on

a conference call Thursday.

Penney narrowed its loss to

$48 million, or 15 cents a

share, for its fiscal second

quarter ended Aug. 3, from a

loss of $101 million, or 32

cents a share, in the year-ear-

lier period. But the retailer

said its net sales fell to $2.

billion from $2.76 billion a

year earlier.

Sales at stores open at least

a year fell 9%. Excluding the

impact from the company’s

exit from the appliance and

furniture business, same-store

sales fell 6%.

Department stores have

been especially hard hit as

shoppers buy more online and

spend less time in malls. On

Wednesday,Macy’s Inc. re-

ported a disappointing second

quarter that sent its stock

plunging.

In its effort to transform it-

self, Penney said on Thursday

that it would partner with re-

sale marketplacethredUpInc.

to sell secondhand clothing

and accessories in 30 of its

stores. Macy’s announced a

similar partnership with

thredUp on Wednesday.

On the bright side, Penney’s

gross margins increased on

lower markdowns and inven-

tory shrank by more than 12%.

The company’s shares

closed at 58 cents, up 2.2%.

The stock is down roughly 44%

this year. Penney recently said

its shares are at risk of being

delisted from the New York

Stock Exchange because they

haven’t maintained an average

closing price of at least $1 for

30 consecutive trading days.

Penney will need to refi-

nance its debt, although it has

no major maturities coming

due in the near term. Its $

million in operating profit in

the latest period was more

than wiped out by the $74 mil-

lion of interest expense the

company paid to service its

debt. That reality “shows the

degree to which the company

is running up a down escala-

tor,” said Neil Saunders, a

managing director of Global-

Data Retail.

Penney has been filling in

its depleted executive ranks of

late. It appointed a new chief

customer officer in May, a new

senior vice president for

women’s apparel in June and

in July announced a new exec-

utive vice president of stores

would start this month. On

Thursday, it announced a new

executive to oversee its home

business.

BYSUZANNEKAPNER

ANDMICAHMAIDENBERG

J.C. Penney Tries On Used Apparel

The retailer is linking up with thredUp as it tries to work its way out of a rut. A sorting facility for the resale marketplace in Phoenix.

MATT YORK/ASSOCIATED PRESS

in the year to date. This is no-

table to some because Amazon

is a favorite for investors seek-

ing rapidly growing companies.

The e-commerce giant’s gains

have helped propel major U.S.

stock indexes higher this year.

Amazon stock was up about

18.3% this year as of Thursday.

This “would have been sur-

prising to anybody 2½ years

ago,” said JJ Kinahan, chief

market strategist at TD Ameri-

trade.

Walmart’s jump also high-

lights the varying fates of

many retailers in the U.S. This

was on display Thursday

morning after strong retail-

sales data. Though American

shoppers are providing a boost

to the U.S. economy, their

spending isn’t lifting shares of

many retailers.

Retail sales, a measure of

purchases at stores, restau-

rants and online climbed 0.7%

in July from a month earlier,

above what economists’ ex-

pected.

“We’ve seen the divergence

all year long” among retailers,

said Ilya Feygin, a managing

director at WallachBeth Capi-

tal. He said that retailers that

have been able to adapt to

changing tastes among con-

sumers have done well, while

others have fared poorly.

For example, shares of

Ralph LaurenCorp. fell 3.2%

in trading Thursday, whileTif-

fany & Co. declined about

2.6%.TapestryInc. dropped

22% after it lowered earnings

guidance, making it the S&P

500’s biggest loser on Thurs-

day.

The retailers’ losses are

even more striking because

major U.S. stock indexes re-

bounded Thursday after steep

declines Wednesday.

Other retailers including

NordstromInc.,GapInc. and

Foot LockerInc. are scheduled

to report earnings next week,

and winners and losers among

retail heavyweights will likely

become clearer.

Walmart Inc. shares ad-

vanced 6.1% Thursday, continu-

ing a winning streak this year

that has lifted the stock about

21% and put the gains neck-

and-neck with shares of a

highflying tech favorite:Ama-

zon.comInc.

The company said Thurs-

day that sales rose in the sec-

ond quarter and it raised its

profit forecasts for the year,

making it one of the S&P 500’s

top gainers. Its shares re-

corded their biggest jump

since August 2018.

Walmart has now narrowly

surpassed Amazon’s advance

BYGUNJANBANERJI

Walmart Set to Outpace Amazon for 2019

gade sales in the U.S., with an

average discount of 18%, ac-

cording to Edmunds.

Car companies are now on

the spot as they turn their at-

tention to the fall selling sea-

son. The excess of older mod-

els could force them to offer

bigger factory discounts or

slow production, analysts say.

At the beginning of August,

just 8% of new vehicles on

dealership lots were 2020

models, according to research

site CarGurus.com. In the

same month last year, the lat-

est models accounted for 19%

of overall inventory.

The leftovers include an un-

usually large number of vehi-

cles that are dated by two

model years. Lingering 2018

cars accounted for 3.5% of

new-vehicle sales last month,

according to J.D. Power data.

That is the largest share of

July sales for previous-year

models since at least 2005.

“I call these rotten apples,”

said Tyson Jominy, an analyst

with J.D. Power. “The only way

to get rid of them now is for

the dealer to cut prices and

just push them out.”

August is an important

month for dealers to whittle

down their stockpiles of older

models, as many auto makers

run extended Labor Day pro-

motions.

A steady economy and low

interest rates have helped sus-

tain U.S. vehicle sales in recent

years. Sales declined 2.5% in

the first half, as higher vehicle

prices and more options avail-

Continued from the prior page

able on the used-car lot

curbed demand for new cars.

Analysts say U.S. sales this

year could fall short of 17 mil-

lion vehicles for the first time

since 2014.

Still, higher prices have

helped pad auto makers’ bot-

tom lines. U.S. buyers have

been paying up for extra fea-

tures and for bigger trucks

and SUVs, pushing the average

selling price steadily upward

in recent years. A record

$33,350 was set in the first

half, according to J.D. Power.

General Motors Co. and Fiat

Chrysler Automobiles NV

posted higher operating in-

come in North America for the

second quarter despite lower

overall U.S. sales. Both cred-

ited increased pricing on

pickup trucks and SUVs for

helping widen their profit

margins.

Stepped-up production of

trucks and SUVs has contrib-

uted to the excess of older

models on dealer lots. As a

percentage of total inventory,

the backlog of previous-year

SUVs was nearly triple that of

a year earlier and for older

pickups about double, accord-

ing to CarGurus.

Overall vehicle inventories

at some of the largest dealer-

ship groups is running higher

than normal.

AutoNation,Penske Auto-

motive GroupInc. andGroup

1 AutomotiveInc. all reported

a more-than-70-day supply of

new vehicles at the end of the

second quarter. A 60-to-65-day

supply is considered healthy.

Many dealers say they are

working to bring their supply

in line with demand, even

passing up incentives that

manufacturers offer to take

more cars.

Auto makers could be

forced to cut production later

this year if dealers curb or-

ders, analysts say.

Car Dealers

Face Unsold

Inventory

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