| 1 | | Gap ($GPS) exceeded quarterly earnings estimates with earnings per share of $0.41 versus the expected $0.14, and revenue of $3.39B, surpassing the anticipated $3.29B. The company's net income for the quarter reached $158M, a sharp turnaround from the $18M loss in the same period last year. More: - In response to the excellent earnings news, gap shares rose by more than 20% in extended trading.
- All four of Gap's brands—Gap, Old Navy, Athleta, and Banana Republic—report positive comparable sales for the first time in years.
- Old Navy's sales hit $1.9B, up 3%. Banana Republic and Athleta report $440M and $329M in sales, with comparable sales up 1% and 5%.
- Gap's $689M sales stayed flat but exceeded expectations with a 3% rise in comparable sales, attributed to effective marketing and product execution for its Linen Moves campaign.
- Gap has revised its operating income outlook to anticipate growth in the mid-40% range, a significant increase from the earlier projection of low-to-mid teens growth.
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| 2 | | PwC may face a record fine of at least 1 billion yuan ($138M) from China's Ministry of Finance for its auditing work with China Evergrande Group, surpassing the previous 212 million yuan fine imposed on Deloitte in 2023. 
What the numbers say: Evergrande's main unit, Hengda, overstated revenue by 564 billion yuan ($78B) over two years, while PwC's Chinese arm reported 2022 revenue of 7.9 billion yuan ($1.1B), contributing to a global revenue of $50.3B. Relevance: The fine against PwC underscores China's intensified efforts to tackle financial risks and crime under President Xi Jinping, aiming to stabilize the economy. PwC's reputation and market share in China could suffer, with potential operational suspensions and client losses, highlighting the scrutiny faced by global accounting firms in the Chinese real estate sector. More data: PwC has lost over a dozen Chinese clients in the past two years, including major firms like China Taiping Insurance and China Merchants Bank, and served as Evergrande's auditor for over a decade until January 2023. Despite facing investigations and fines in Hong Kong, Australia, and the UK, PwC's Hong Kong-listed shares rose by up to 4% on Wednesday. | | | |
| 3 | | Walmart ($WMT) introduces Walmart Realm, its immersive shopping platform, joining the virtual store trend. This platform showcases influencer-led virtual shops in three themed environments curated by online creators, enabling consumers to explore and purchase home, fashion, and beauty products. More: - Walmart Realm integrates gamification features and giveaways to enhance user engagement, developed in collaboration with Emperia.
- William White, Chief Marketing Officer, highlights Walmart's dedication to e-commerce innovation.
- Walmart had previously released the Supercampus game on Roblox, which combined interactive gaming with back-to-school shopping.
- Lacoste, Bloomingdale's, and Tommy Hilfiger, among others, have embraced the immersive store trend, partnering with Emperia and Obsess to launch their virtual stores.
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| 4 | | Nordstrom ($JWN) falls short of quarterly earnings expectations, reporting a loss per share of $0.24 versus the expected $0.08, despite exceeding revenue projections with $3.34B for the fiscal first quarter. The company records a net loss of $39M, an improvement from the $205M loss in the previous year. More: - Nordstrom Rack, the company's off-price chain, demonstrates improvement, surpassing flagship stores with a 7.9% increase in comparable sales compared to the previous year.
- After the earnings announcement, Nordstrom's shares dropped by around 7% in after-hours trading.
- Nordstrom projects full-year earnings between $1.65 and $2.05, with revenue anticipated to range from a 2% decrease to 1% growth compared to the previous year.
- Strong double-digit growth in activewear sales, robust performance in kids' and women's apparel, and high single-digit growth in beauty sales fuel the company's quarterly performance.
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| 5 | | Costco Wholesale ($COST) exceeds third-quarter revenue expectations, with total revenue reaching $58.52B and profit per share standing at $3.78, surpassing analysts' estimates. Strong demand for low-priced discretionary items and groceries contributes to the revenue growth, with CFO Gary Millerchip noting a return to purchasing more discretionary items as inflation levels off. More: - Costco experiences a strong demand for fresh foods and bakery items, particularly popular products such as lemon blueberry loaf and morning buns.
- Comparable sales for the quarter increased by 6.5% on an adjusted basis, surpassing last year's 3.5% rise.
- E-commerce comparable sales soared by 20.7%, buoyed by strong performance in categories such as gold and silver bullion, gift cards, and appliances.
- Despite strong performance, Costco's shares dropped 1.7% in after-market trading amidst wider market downturns.
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| 6 | | Saudi Arabia's Prosperity7, linked to Aramco's venture capital arm, joins a $400M funding round for Chinese AI start-up Zhipu AI, valuing the company at $3B. Zhipu AI, a leader in generative artificial intelligence in China, specializes in AI-in-a-box products, previously relying on domestic funding in the sector due to U.S. restrictions. More: - The investment signals Saudi Arabia's backing of a tech ecosystem to challenge U.S. supremacy in AI.
- Washington's restrictions on certain U.S. investments in China's AI sector and stricter export controls on advanced chips have prompted foreign investors to explore alternative options.
- Saudi state investors and Chinese tech firms are teaming up to access new capital and markets, as evidenced by Lenovo's $2B convertible bonds issued to a Saudi subsidiary.
- With more than 800 workers, Zhipu AI enjoys the support of state investors such as the National Social Security Fund, Tencent, Alibaba Cloud, and Meituan.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Shriram Jeevakumar | |
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