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Penney, Kohl's release downbeat reports

J.C. Penney and Kohl’s struggled during the start of the year, raising concerns about the challenges ahead for the department store industry.

Penney reported a wider than expected loss and sales declines during the first quarter while Kohl’s cut its fiscal 2020 profit outlook as it struggled with slumping sales in the quarter.

Meanwhile, Home Depot reported better than expected profit and revenue for the first quarter despite a damp start to 2019. That inclement weather and an extra week in the previous fiscal year dragged down the home improvement retailer’s comparable store sales.

The downbeat reports from the mid-priced department stores, announced Tuesday, were in contrast to Macy’s performance, reported last week. Macy’s first-quarter profit smashed Wall Street estimates. Macy’s also put up its sixth consecutive quarter of increases in comparable store sales — or sales in stores open a year — fueled by its robust online business after a three-year sales slump. But it also said that President Trump’s escalating trade war could mean higher prices for Macy’s customers.

Department stores have been trying to reinvent themselves as more shoppers go online. They’ve also been hurt by increasing competition from T.J. Maxx and other off-price stores, which offer coveted brands at discount prices. So, retailers have been offering more exclusive merchandise and expanding online services.

Last month, Kohl’s said it was expanding is partnership with Amazon, with plans to accept Amazon returns in all of its 1,150 stores starting in July. (Amazon founder Jeff Bezos owns The Washington Post.)

— Associated Press

PHARMACEUTICALS
Merck to buy firm with kidney cancer drug

U.S. drugmaker Merck on Tuesday agreed to buy Peloton Therapeutics for $1.05 billion in cash, gaining access to the privately held company’s lead kidney cancer drug candidate.

The acquisition can strengthen Merck’s presence in the field of renal cell carcinoma and bolster its cancer drug portfolio. Merck’s blockbuster immunotherapy Keytruda was approved last month in the United States for treating renal cell cancer.

Peloton expects to start studying its lead drug, a kidney cancer treatment code-named “PT2977,” in a late-stage trial in the second half of this year.

In an older mid-stage trial testing patients whose cancer had spread even after treatment with at least one therapy, 24 percent of patients treated with Peloton’s drug showed an at least 30 percent shrinkage of targeted lesions.

Confident of its pipeline, Peloton was earlier looking to go public and had given a pricing range of $15 to $17 per share for its initial public offering.

At the upper limit of that range, the company would have been valued at $903.6 million. With the Merck deal now in place, Peloton shareholders would be eligible to receive a further $1.15 billion on achieving certain sales and regulatory milestones.

— Reuters

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