By Ciara Linnane, MarketWatch
Here’s what companies are saying about COVID-19 on Thursday:
• Boeing Co. /zigman2/quotes/208579720/composite BA +1.25% is offering buyout and early retirement packages to employees as the virus grounds airlines around the world and decreased demand for new planes, according to media reports Thursday. The aerospace giant announced the plan in a memo to employees from Chief Executive Dave Calhoun, according to CNBC. “It’s important we start adjusting to our new reality now,” he wrote, said the CNBC report. Boeing has about 151,000 employees, roughly half of whom are based around Seattle’s Puget Sound region.
• Boston Scientific Corp. /zigman2/quotes/203726728/composite BSX -0.19% expects first-quarter revenue growth to be flat to up slightly versus the year-earlier period, after the pandemic caused many elective procedures to be delayed. The company said business trends were in line with expectations in January and February but took a downturn in March. The company is reining in costs, cutting the salaries of its CEO, board and executive committee members and temporarily cutting hours. The company is working with the University of Minnesota Bakken Medical Device Center to bring a ventilator alternative to market. It is making face shields at three of its U.S. plants and working to develop a reusable personal respirator.
• Brinker International Inc.’s /zigman2/quotes/203470869/composite EAT +3.64% third-quarter same-store sales at company-owned restaurants fell 5.9% as a result of the outbreak. For the quarter, same-store sales sank 5.3% at Chili’s and plummeted 9.9% at Maggiano’s. Brinker has cut capital expenditures and marketing spend, amended its credit facility to allow for $800 million in borrowing and reduced salaries. Chief Executive Wyman Roberts has taken a 50% pay cut. Brinker has withdrawn its fiscal 2020 guidance, and says it had total liquidity of $237 million as of March 31, $137 million in cash.
• Carnival Corp. /zigman2/quotes/202325446/composite CCL +1.80% secured a massive rescue financing package, the biggest slice of which is a $4 billion senior secured bond offering that gives investors an 11.5% coupon, yielding near 12% yield on debt that matures in 2023. Initially, the company pitched a smaller $3 billion senior bond offering at coupon of about 12.5%, but was able to get slightly more favorable terms from creditors even as Carnival and others battle a world-wide slump in travel.
• DaVita Inc. /zigman2/quotes/204229673/composite DVA +0.19% plans to hire at least 15,000 new employees this year, from jobs ranging from care giving to corporate support. The kidney care services company said previous health care experience is not required for many of the new roles. The open positions include nurses, social workers, registered dietitians, biomedical technicians, management roles and corporate roles from IT, insurance, people services, executive assistants and revenue operations.
• Ford Motor Co.’s /zigman2/quotes/208911460/composite F +3.68% first-quarter vehicle sales fell 12.5% from a year ago. Truck sales fell 5.4% to 263,757 vehicles, SUV sales dropped 11.0% to 189,720 and car sales slid 36.0% to 62,853, while overall van sales rose 5.7% to 54,499. Among some of Ford’s bestselling models, F-series sales fell 13.1% to 186,562 vehicles, Explorer sales dropped 9.1% to 56,310, Escape sales fell 20.7% to 48,117 and Fusion sales declined 11.4% to 36,937. Mustang sales rose 6.8% to 18,069 and Transit sales grew 15.7% to 36,836.
• MarineMax Inc. /zigman2/quotes/200564171/composite HZO +4.04% warned of a fiscal second-quarter revenue shortfall, as the recreational boat and yacht retailer is feeling the effects of the pandemic. The company is working with manufacturers to adjust futures orders, has temporarily closed departments or stores, although “many” of its 59 store remain fully or partially operational; is furloughing employees, as it cuts operating costs and delays or reduces capital expenditures; reducing orders from manufacturers; working to “extract capital” from its real estate holdings, which had a net book value of $123 million as of Sept. 30, 2019; and looking to monetize inventory, which was approximately $100 million on Dec. 31. The company withdrew its 2020 financial guidance.
• Marriott Vacations Worldwide Corp. /zigman2/quotes/200002947/composite VAC -0.84% has amended its non-recourse warehouse credit facility to expand its borrowing capacity to $531 million, up by $181 million. Under the terms of the agreement, the termination date for the existing $350 million warehouse facility remains Dec. 2021, with the additional capacity terminating on March 31, 2021. The interest rate on the warehouse facility is Libor plus 1.4%. The company has more than $310 million of borrowing capacity following the amendment.
• Ross Stores Inc. /zigman2/quotes/208674852/composite R +4.86% will furlough most of its store and distribution center associates starting April 5. Ross Dress for Less and DD’s Discount locations have been closed since March 20 and will now be closed indefinitely. Board Chairman Michael Balmuth and Chief Executive Barbara Rentler will forego their salaries with tiered salary reductions throughout the company.
• Shake Shack Inc.’s /zigman2/quotes/209397077/composite SHAK +2.66% same-restaurant sales tumbled 29% in March from a year ago, with the impact of the coronavirus outbreak becoming more acute as the month progressed. For the first two months of the quarter, same-Shack-sales were down about 2%, with declines starting to accelerate in early March. The company is expanding its delivery partners to include Postmates, DoorDash, Uber Eats and Caviar. Separately, the company said about 20% of its home-office employees have been furloughed or laid off, and “significant” reductions have been made in staff across all restaurants.
• Snap Inc.’s /zigman2/quotes/205087158/composite SNAP -0.28% video calling shot up more than 50% in late March compared with late February as the pandemic spread. Snaps between friends as well as Group Chats hit all-time highs.
• Stanley Black & Decker Inc. /zigman2/quotes/206369278/composite SWK +1.12% is cutting indirect spending, reducing nonessential staffing and temporarily suspending M&A activity. The tool maker will provide additional information on its first-quarter earnings call scheduled for April 30. But the company has a strong financial position with substantial cash on hand, a robust commercial paper program and access to $3 billion of revolving credit facilities backed by a well-capitalized bank group.
• TransDigm Group Inc. /zigman2/quotes/203902625/composite TDG +1.40% will cut its workforce by 15%, citing the disruption the COVID-19 pandemic has caused to the aerospace and travel industries. The aircraft parts maker had 18,300 employees as of Sept. 30, 2019, suggesting the cuts could impact 2,745 employees. The company said laid-off U.S. employees will receive a “substantial” lump sum payment based on their tenure, and an additional $4,000 to help with expenses associated with health care and job search. TransDigm will cut senior manager’s cash compensation and withdrew its guidance.
Additional reporting by Tonya Garcia, Tomi Kilgore, Emily Bary, Jon Swartz and Jaimy Lee.
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