Shares of Asos fell after initially rising 9% on Friday after the online fashion retailer announced it would strengthen its balance sheet through a new £275m ($339.9m) long-term financing facility and placement of £75m as the company continues to restructure.
Existing shareholders Aktienelskabet and Camelot Capital Partners participated in the capital increase, Asos announced.
CEO Jose Antonio Ramos Calamonte wants to convince investors that his plan will bring the company back to profitability.
However, Russ Mold, investment director at AJ Bell, said: “The key question for ASOS is: will raising £80m by issuing new shares and refinancing the debt really lower the budget?”
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“The online fast fashion retailer hopes this will lay a solid foundation for the company’s recovery.
“However, because the company is paying high interest rates on its newly arranged debt, much of the money raised from shareholders will be used almost immediately to service its loans.”
Like other online-only retailers, Asos has been hit hard by rising returns rates.
Rio Tinto (RIO.L)
Rio Tinto rose after Morgan Stanley (MS) was upgraded from Equal Weight to Overweight.
Consulting firm Jefferies was also bullish on the miner, saying Rio Tinto offers “compelling” opportunities over the long term.
“Weak demand in China is a near-term risk and valuation alone is not a trigger for mining stock prices to rise.
“But our analysis shows that shares in Rio, BHP (BHP.L) and Vale (VALE) are currently trading at compelling levels,” it said.
Markets are currently pricing in a reference iron ore price of $81.37/t.
However, investors should be aware that Rio Tinto’s stock is down 18% over the past three months
Marvell (MRVL)
Shares in chipmaker Marvell are up nearly 20% in after-hours trading after the semiconductor maker beat analysts’ expectations for the first quarter.
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The semiconductor company reported adjusted earnings per share of 31 cents for the April quarter, compared to Wall Street analysts’ consensus estimate of 29 cents.
Revenue came in at $1.32 billion, beating analysts’ expectations of $1.3 billion.
“AI has emerged as a key growth driver for Marvell, which we are enabling with our leading network connectivity products and new cloud-optimized silicon platform,” said Matt Murphy, Marvell CEO, in the press release.
“While we are still in the early stages of our AI journey, we expect our AI revenue to at least double year-on-year in fiscal 2024 and continue to grow rapidly for years to come.”
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The company, which sells a range of chips and hardware products for the data center, 5G infrastructure, networking and storage markets, also said revenue growth will accelerate in the second half of the fiscal year.
Costco (COST)
Shares slipped 0.2% after the retailer posted a decline in sales, posting $53.65 billion for the fiscal third quarter, while analysts had forecast $54.57 billion.
Costco reported operating income of $4.79 billion for the quarter, up from $4.45 billion for the same period last year.
Net income attributable to Costco was $1.3 billion in the third quarter of fiscal 2023, down from $1.35 billion in the same quarter last year.
As consumers focus their spending on essential items like packaged groceries and groceries, full-service providers like Costco are struggling with a drop in demand for high-margin products like home furnishings, jewelry, toys and electronics.
“Costco’s solid value proposition and loyal customer base weren’t enough to capitalize on economic fears, even with the competitively priced mix of well-known brands and in-house Kirkland products,” said Michael Ashley Schulman, chief investment officer at Running Point Capital Advisors.
Costco reported quarterly earnings of $2.93 per share, falling short of analysts’ expectations of $3.29.
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