EU Demands $14.6 B in Tax from Apple, Abercrombie & Fitch Plunges

Mukesh Buch
30 Aug, 2016
New York City

European Union regulators fined and demanded back taxes of $14.6 billion from Apple Inc. Abercrombie & Fitch plunged after net loss widened. DSW net declined 34%. G-III lowered fiscal outlook. Mondelez dropped its pursuit of Hershey. TiVo net surged 61% but revenues declined.

[R]2:00 PM New York – European Union regulators fined and demanded back taxes of $14.6 billion from Apple Inc. Abercrombie & Fitch plunged after net loss widened. DSW net declined 34%. G-III lowered fiscal outlook. Mondelez dropped its pursuit of Hershey. TiVo net surged 61% but revenues declined.[/R]

Tollbooth Index slipped 51.86 or 0.5% to 11,005.58.

Earnings Review

Apple Inc ((AAPL)) fell 94 cents to $105.88 after the European Commission ruled that Ireland should recover up to €13 billion or £11 billion from mobile and media devices maker.

The commission ruled that Apple received illegal state aid in the form of a lower tax rate and needed to pay $14.6 billion in back taxes to Ireland,

Apple said it will appeal the ruling and chief executive Tim Cook said the commission’s finding had """"no basis in fact or in law.""""

Abercrombie & Fitch Co ((ANF)) tumbled 18.3% or $4.18 to $18.77 after the specialty retailer reported revenues in the second-quarter ending in July dropped 4% from a year ago at $783.2 million.

Comparable store sales in the quarter slumped 4%.

Net loss in the quarter widened to $13.1 million or 19 cents per diluted share compared to the $0.8 million or 1 cent per share from the same quarter last year.

Bank of Nova Scotia ((BNS)) gained 1.2% or 62 cents to $53.50 after the Canada-based banking and financial services provider said revenues in the third-quarter ending in July jumped 8.5% from a year ago at $6.6 billion.

Net income in the quarter advanced 5.1% to $1.86 billion or $1.54 per diluted share compared to the $1.77 million or $1.45 per share from the same quarter last year.

DSW Inc ((DSW)) plunged 9.7% or $2.51 to $23.51 after the footwear retailer stated sales in the second-quarter ending in July increased 5.1% from a year ago at $659 million.

Comparable store sales in the quarter decreased 1.2%.

Net income in the quarter declined 33.5% to $25 million or 30 cents per diluted share compared to the $37.6 million or 42 cents per share from the same quarter last year.

The footwear retailer reaffirmed earnings per share estimate in the year between $1.32 and $1.42.

Fred''s, Inc ((FRED)) slumped 6.1% or 77 cents to $11.79 after the discount stores operator said total sales in the second-quarter ending in July fell 3% from a year ago at $529.5 million.

Comparable store sales in the quarter decreased 2%.

Net loss in the quarter widened to $6.9 million or 18 cents per diluted share compared to the $4.9 million or 13 cents per share from the same quarter last year.

Separately, the retailer reported sales in the four-week ending on August 27 declined 3.5% to $159.6 million from a year ago month and comparable store sales in August slumped 3% compared to increase of 1.2% in the year-earlier month.

Fred''s forecasted both total sales and comparable store sales in the second-half of the year between negative 1% to a positive 1% and diluted loss per share in the range of 18 cents to 23 cents.

G-III Apparel Group, Ltd ((GIII)) plummeted 17.2% or $7.21 to $34.60 after the apparel retailer reported net sales in the second-quarter ending in July plunged 7% from a year ago at $442.3 million.

Net in the quarter swung to a loss of $1.3 million or 3 cents per diluted share compared to the profit of $12.5 million or 27 cents per share from the same quarter last year.

The retailer lowered its forecast in the year for net sales of about $2.48 billion from earlier estimated to about $2.56 billion.

Net income estimated in the range of $102 million to $106 million from previously forecasted range between $120 million and $125 million.

The retailer lower its diluted earnings per share estimate in the range of $2.16 and $2.26 from the earlier forecasted range between $2.55 and $2.65.

Mondelez International Inc ((MDLZ)) jumped 3.6% or $1.55 to $44.60 after the snack food and beverage products maker dropped its pursuit of rival Hershey Co after the famed chocolatier rebuffed its latest acquisition offer of $23 billion or £17 billion.

TiVo Inc ((TIVO)) slid 1 cent to $10.85 after the TV content recording equipment provider said net revenues in the second-quarter ending in July declined 9.8% from a year ago at $107.7 million.

Net income in the quarter soared 61.4% to $13.4 million or 14 cents per diluted share compared to the $8.3 million or 9 cents per share from the same quarter last year.