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Fairchild Semi lowers outlook and unveils cost cuts due to weak demand

Fairchild Semiconductor International Inc. said Wednesday it is lowering its outlook for the third quarter and embarking on a cost-cutting program as it struggles with weak demand. The company said it now expects third-quarter sales of about $340 million, down from a prior range of $355 million to $375 million. The current FactSet consensus is for third-quarter sales of $365 million. The company is expecting its gross margin to be within its previous range of 34% to 35%. Fairchild said it is planning to cut annual operating costs by $30 million to $34 million in a program that will be implemented by the middle of the fourth quarter. The company is expecting to book a charge of about $13 million for severance in the third quarter. “Given the incrementally weaker demand environment, we are taking decisive steps to reduce operating expenses to our target model of 25 percent of sales at the current revenue level,” Chief Executive Mark Thompson said in a statement. Shares were not yet active in premarket trade, but are down about 17% in the year so far, while the S&P 500 has lost 4.4%.

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McDonald’s to transition to buying only cage-free eggs over next 10 years

McDonald’s Corp. said it will transition to using only cage-free eggs over the next 10 years for all its nearly 16,000 restaurants in the U.S. and Canada. McDonald’s USA buys about 2 billion eggs a year, and McDonald’s Canada buys 120 million eggs, to serve on breakfast sandwiches. Since 2011, only about 13 million eggs bought a year are cage free. “Our customers are increasingly interested in knowing more about their food and where it comes from,” said McDonald’s USA President Mike Andres. “Our decision to source only cage-free eggs reinforces the focus we place on food quality and our menu to meet and exceed our customers’ expectations.” McDonald’s follows a number of food service companies moving to cage-free eggs, including General Mills Inc. , Wal-Mart Stores Inc. , Starbucks Corp. and Kellogg Co. . McDonald’s stock, which is still inactive in premarket trade, has gained 2.2% over the past three months, while the Dow Jones Industrial Average has lost 7.2%.

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Celanese announces new $1 billion share buyback program

Celanese Corp. said Wednesday its board has approved a new $1 billion share buyback program. The specialty materials company said it will execute the program over the next two years. The approval is equal to about 11% of the company’s outstanding shares. Shares were not yet active in premarket trade, but are up 0.7% in the year so far, while the S&P 500 has lost 4.4%.

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Japanese PM Abe pledges cut in corporate tax rate

Japan’s Prime Minister Shinzo Abe said the government plans to lower the country’s corporate tax rate, according to media reports Wednesday. The rate, which stands around 35%, will be lowered by at least 3.3 percentage points in fiscal 2016, Abe reportedly said at an event in Tokyo. “It is unclear, however, how much of this reflects legislation already passed in March,” Adam Cole, head of G10 FX strategy at RBC Capital Markets, said in a note. Abe also said his government will “aim to go beyond that if possible”, according to reports. Japanese stocks surged Wednesday, leaving the Nikkei Average up 7.7%, its biggest jump since October 2008.

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Men’s Wearhouse reports Q2 net sales of $920.1 million, Jos. A. Bank struggles

Men’s Wearhouse Inc. on Tuesday reported a second-quarter net sales decrease of 1.1% to $920.1 million, missing the FactSet consensus of $946.8 million. Adjusted earnings per share were $1.07 for the quarter ending August 1. The FactSet consensus was $1.05. Comparable sales increased among most of the company’s brands: 3.1% at Men’s Wearhouse, 0.7% at Moore’s, and 6.7% at K&G. Jos. A. Bank comparable sales, however, fell 9.4%. “Now that we have a full year under our belt, we have become even more convinced that changing the promotional messages to be clear and compelling without unusual quantity requirements, like buy one get three free offers, will broaden the appeal of the Joseph A. Bank brand,” said CEO Doug Ewert.

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