Novo Dips, AB Foods Slumps, Inditex Climbs

On this episode of Stock Movers:
- Novo Nordisk will slash 9,000 jobs globally and cut its profit forecast for the third time this year as it fights to recover ground lost to its more efficient rival Eli Lilly & Co. in the booming obesity drug market.
- Associated British Foods shares slumped after the British conglomerate reported falling sales at its Primark budget fashion chain and gave a muted outlook for the sugar division next year.
- Inditex shares jumped after a positive start to the third quarter reassured investors on the fashion retailer’s growth prospects.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio News, The.

Speaker 2 (00:08):
Stock Movers Report, your roundup of companies making moves in
the stock market, harnessing the power of Bloomberg Data.

Speaker 3 (00:17):
Let's take a look now some other socks on the
move today here in Europe. I'm Caroline Hepget alongside Lizzie Burden,
and we're joined by Bloomberg reporter Louise Moon Luis. Should
we start with Novo Nordisk big staff cuts. How have
the markets been reacting?

Speaker 4 (00:30):
Indeed, yeah, well this comes if we look back at
the wider context. Novo Obviously we're booming in the market,
and then they've been facing increasing competition. Their stock is
down over forty percent year to date, and then this
host of bad news this morning, as you mentioned, you
would kind of expect that to pull the stock down further.

Speaker 1 (00:48):
It didn't initially drop, but shares are now rising.

Speaker 4 (00:50):
But the new on the news they're cutting nine thousand jobs,
that's about eleven percent of their staff and mostly in Denmark,
in their home market, and that's with the aim of
saving about one point three billion US dollars by twenty
twenty six. They've also cut their profit forecast. That's for
the third time this year, so they're seeing profits of
as much as ten percent growth rather than twenty seven

(01:11):
percent growth that they had seen previously. As I say,
stocks then initially dropped, they are now rising. Analysts are
essentially saying that it shows the companies taking action to
improve things, so it's being proactive to turn things around.
One noted it was the first action they've seen from
the company to do something about this increased competition in
the space. And the next thing to look ahead for
really is they've got an invested Day on September seventeenth,

(01:32):
so they'll lay out a roadmap for what's to come.
So it'll be the next key thing that analysts will
be focusing on.

Speaker 3 (01:38):
Louise, what's going wrong with Primarni, maybe food stun more
than ten percent.

Speaker 4 (01:42):
I know A raised their year to stay gains this morning,
so they had their second half update. Weakness essentially across
the board, so they're blaming consumer caution and geopolitical uncertainty inflation.
So as you say, Primark sales they dropped. That's obviously
what abf are mostly known for. But a key thing
people are also really focusing on as their sugar unit.
That's really been in focus and it's continuing to weigh

(02:05):
on the wider companies. They're saying that they're seeing some
improvement and profitability for sugar, but they are said expecting
a forty million pound loss in the sugar unit. They
recently closed the plant in the UK, They've had to
restructure some Spanish operations, and they said this morning from
those two things, they're expecting a two hundred million pound

(02:26):
hit from that. So things, they still got quite a
lot of fires to fight, and that's obviously being reflected
in the drop in their stock this morning.

Speaker 3 (02:34):
It's doing battle with the que in a prime mark.

Speaker 1 (02:38):
That is the major issue as far as I'm concerned.

Speaker 3 (02:42):
I mean, and it's also one of those places where
there are so many small items. But like i qre
prime up many others, I'm sure there's a way that
they get us to spend lots of that aside, we
love those stores, don't we.

Speaker 1 (02:55):
Let's think about in detect You are a more of
a Bizara shopper, aren't you, Carolinzed?

Speaker 3 (02:59):
Yeah, yeah, I've been known to walk into Zara. What
is install for intertext at the minute.

Speaker 4 (03:06):
So shares are climbing this morning for Indo text Spanish
retailer Worlds, BIG's retailer, as you say, owned Zara. They've
had essentially a positive start to the third quarter and
and Lesser saying this is indicating resilience.

Speaker 1 (03:18):
There's been a lot of worries for the whole.

Speaker 4 (03:20):
Wider sector about consumer sentiment, trade tensions weighing on sales.

Speaker 1 (03:26):
But positive start to the third quarter.

Speaker 4 (03:28):
So revenue is up nine percent in the five weeks
to September eighth, so.

Speaker 1 (03:31):
It's a bit of a relief. They had a bit
of a.

Speaker 4 (03:33):
Disappointing first half, but this is indicating potentially good things
to come, so it's boosting their stock.

Speaker 1 (03:39):
This morning.

Speaker 2 (03:41):
This stock mover's report from Bloomberg Radio. Check back with
us throughout the day for the latest roundup of companies
making news on Wall Street and for the latest market
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Speaker 3 (04:05):
Mm hmm