Daily Brief Consumer: Lifestyle China, Lululemon Athletica, Rakuten, Seven & I Holdings, Five Below, Hormel Foods, Pvh Corp, Swiss Water Decaffeinated Coffee, Bausch + Lomb, Vizio Holding and more

• Lifestyle China (2136 HK) disclosed a Cayman scheme privatisation offer from Mr Thomas Lau at HK$0.913 per share, a 21.7% premium to the last close price of HK$0.75. 
• The offer is unattractive compared to precedent transactions, peer multiples, and historical trading ranges. It has not been declared final. 
• While no shareholder holds a blocking stake, the high AGM minority participation rates and emerging retail opposition suggest a high chance of a deal break. Therefore, a bump is probable.

• While the overall market continues to hit All-time High almost every other day, Lulu has been battling the skeptics for much of this year.
• There is still a long way to go, but with the stock now up almost 50% over the last three months, Mr. Market has likely started acknowledging that the bear narratives perhaps went a bit too far.
• Glancing through the numbers for 3Q’24 may seem eerily similar to 2Q’24, but management’s tone was much more upbeat in tonight.

• Today, Rakuten (4755 JP) announced a new shareholder benefit (株主優待) program today, to reward shareholders as of end-December 2024. The stated goal? To “thank shareholders”… 
• …And provide more people with the opportunity to try out the benefits of Rakuten Mobile, with 1yr free of a 30GB/mo mobile plan. There are conditions, but it’s juicy.
• Last year’s 3mo plan was given with one day of notice. This year’s larger full-year govt gets 3+wks. They are juicing the sub numbers for 2025.

• Reportedly, Ito Junro’s MBO for Seven & I (3382 JP) includes a US assets IPO to help pay down MBO debt to Japanese banks.  Possible strategic mistake by Ito-san here.
• Starwood/Warburg Pincus’ firm Offer for ESR Group (1821 HK) secures support from 30.79% of the register.
• We may be wrong on Sanrio (8136 JP) by a big factor but the multiple and the concentration risk of momentum factor means you are in an illiquid stock.

• Five Below recently announced its third quarter results for fiscal year 2024, reflecting a blend of positive strides and ongoing challenges.
• The company reported a 15% increase in sales, reaching $844 million, slightly surpassing its guidance with a comparable sales growth of 0.6%.
• Adjusted earnings per share stood at $0.42, an improvement over the previous year.

• Hormel Foods Corporation recently held its fourth quarter earnings call, delivering a mix of positive developments and some areas of concern.
• The company’s financial performance in fiscal 2024 reflected its strategic shift and operational initiatives, which helped manage a challenging macroeconomic environment and exhibited the resilience of its portfolio and team.
• From a positive perspective, Hormel Foods reported a year of solid execution of its strategic initiatives, which included introducing innovative products across its portfolio, expanding its market presence, and reinvesting in its well-established brands like Hormel Black Label, Jennie-O, SPAM, and Applegate.

• Investors reviewing PVH Corp’s recent performance might note several key aspects from the second quarter of 2024.
• On the positive side, PVH has managed to align its revenue with guidance while exceeding profitability and earnings per share expectations.
• A notable achievement was expanding EBIT margins, partly due to improving gross margins by 250 basis points and enhancing inventory productivity, with a 12% year-over-year reduction in inventory.

• With consumption of decaffeinated coffee rising at a faster pace than that of the overall coffee beverage category, we expect substantial growth opportunities for Swiss Water.
• In our view, SWP’s natural decaffeination process is a key factor that helps drive demand for its coffee, particularly given the positive tailwind from coffee consumption trends.
• We note, however, that rising coffee futures prices potentially signal that coffee prices will rise.

• Bausch + Lomb’s third-quarter 2024 financial results reflect a period of significant growth and strategic execution across its key business segments.
• The company reported a total revenue of $1.196 billion, marking a 19% constant currency growth, with a 10% organic increase.
• This performance is attributed to the company’s focus on operational excellence, sales, and innovation, supported by the rollout of new products and enhancement of existing ones.

• Vizio is at risk of a potential merger termination with Walmart due to anti-trust concerns
• Stock trades at a small discount to the deal price, indicating concerns about deal approval
• Potential upside for shorting Vizio stock is 30%, with downside limited to 2% equivalent to deal price.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.