Here are five things you need to know this morning:
Royal Bank beats: Canada’s biggest company, Royal Bank of Canada, bested analyst expectations last quarter as the lender saw higher revenue and less money set aside for bad loans. RBC’s adjusted earnings per share came in at $3.07 in the fourth quarter, slightly ahead of the $3.03 expected. The bank set aside $840 million in provisions for credit losses during the quarter, less than the $846 that analysts were expecting. Revenue came in at $15.1 billion, also ahead of the $14.8 billion analysts were expecting. Royal’s shares have already gained 30 per cent this year and Jefferies analyst John Aiken said in a note to clients that he thinks the stock will likely add to that tally today as the market digests the bank’s numbers.
Keeping an eye on South Korea: The chaos that unfolded in South Korea seems to be coming to some sort of calm resolution, as President Yoon Suk Yeol has rescinded his bizarre decision to declare martial law. Yoon made the bold move on Tuesday evening local time in a bid to block his political opponents from paralyzing his administration amid a fractious political climate. The move was met by opposition from a majority of parliamentarians including some members of his own party, along with massive public protest and threats of general strikes. The benchmark South Korean stock index was down by as much as seven per cent at one point, while the country’s currency, the won, lost almost three per cent. Yoon rescinded his declaration in an address to the nation on Wednesday and now faces impeachment proceedings. Policy makers including the central bank are doing their best to calm domestic and foreign investors today as markets are open and trading as normal.
Seven & i buyout would include IPO of 7-Eleven assets in the U.S. and Canada: The proposed US$60 billion buyout of Seven & i Holdings Co. includes plans for an initial public offering of its North American convenience stores and gasoline stations, Bloomberg is reporting. The Japanese family that founded the firm is trying to hold off an overture from Canada’s Alimentation Couche-Tard to take over the company for roughly $48 billion at last count and make it far and away the biggest convenience store chain in the world. Any such buyout would come with massive amounts of debt, so the IPO plan is thought to be a way for the new company to trim its balance sheet while retaining domestic control of the prized Japanese assets. The Ito family would retain a stake in the spun off business, Bloomberg is reporting this morning, citing unnamed sources familiar with the plan.
Dollarama meets expectations, plans to beef up Western Canada presence: Discount retailer Dollarama Inc. posted quarterly results before the bell the morning, numbers that showed the retailer met analyst expectations on revenue and profit in the third quarter. Sales rose 5.7 per cent to $1.56 billion, in line with estimates, while profit came in at $275 million, up from $261 million a year ago. The company announced it is planning to expand its presence in Western Canada with a massive new logistics hub. The company spent $46 million for a plot of land outside Calgary where it plans to build it. Currently, its main hub is near Montreal, but the facility will be part of the planned ramp up of stores, with 200 new locations planned on top of its 2,200 currently by 2031.
Foot Locker shares tripping up: Shares in Foot Locker are one to watch this morning after the athletic gear retailer missed analyst expectations in its recently completed quarter and slashed its outlook for the current one and beyond. Same store sales grew 2.4 per cent, less than the 2.8 per cent expected, while total sales came in at US$1.96 billion. That’s a decline of 1.4 per cent and less than the $2.02 billion expected. The company’s quarterly loss came in at 34 cents per share, worse than last year and worse than analysts were hoping for. The company is closing stores and now has 691 in the U.S. That’s a decline of six per cent compared to this time last year. The shares are off 19 per cent premarket.