Big U.S. firms adopt cautious tone on China recovery
May 10 (Reuters) -Several U.S. companies, including PepsiCo, Qualcomm and Cummins, struck a cautious note on their growth prospects in China, blaming what they said was a slower-than-expected recovery after the country lifted COVID curbs in December.
China's economy grew faster than expected in the first quarter but remarks from American companies with substantial operations in China suggest that demand has not returned to pre-pandemic levels.
In April, China's imports contracted sharply, underscoring signs of weak domestic demand as a battered property market, worries over job stability and global economic uncertainty kept shoppers wary.
"China is getting better, but slowly," PepsiCo PEP.O Chief Financial Officer Hugh Johnston told Reuters late last month.
"We grew mid-single digits in China, which had previously been a double-digit growth market for us pre-pandemic. I think it's going to take some quarters before it really gets back to where it was before."
Rival Coca-Cola KO.N echoed the sentiment.
Starbucks, the world's largest coffeehouse, posted a 3% rise in China comparable sales in its second quarter, but said growth in average weekly sales will be at a more moderate pace in the second half of the year.
Cosmetic maker Estee Lauder Cos Inc EL.N last week forecast weaker sales and profit for the year than previously estimated, blaming slow recovery at duty-free and travel destinations including China.
"Consumer confidence remains weak and shaken because many Chinese faced job and salary cuts in 2022 and Chinese New Year bonuses in 2023 were low," said Shaun Rein, managing director at China Market Research Group.
"The result is Chinese are trading down: think Luckin Coffee over Starbucks, Anta over Adidas. (Consumers) are looking for good value and cheap product lines and cutting big ticket items like cars and houses."
Still, a rapid recovery in domestic travel demand propped up sales at hotels.
Marriott International Inc MAR.O reported better-than-expected quarterly results last week as revenue per available room in mainland China recovered to 2019 levels.
Europe's biggest hotel group Accor ACCP.PA has also said China saw a clear acceleration in the quarter, especially after the Lunar New Year holidays.
NO SUSTAINED IMPROVEMENT
Apple Inc AAPL.O in its latest quarterly report said sales in China fell 2.9%. Chipmaker Qualcomm QCOM.O, which forecast current-quarter results below estimates, said, "We have not seen evidence of meaningful recovery (in China) and are not incorporating improvements into our planning assumptions."
Truck engine maker Cummins CMI.N said truckmakers in China were ramping production to restock inventory but the company was "not yet seeing signs of sustained improvement."
Car maker General Motors GM.N, which faces stiff competition from domestic brands in China's crowded auto market, said it did not expect an improvement in its income from the country until the second half.
"China will be a growth driver for many multi-national companies but will not be at the high growth rates many analysts predict," China Market Research's Rein said.
Reporting by Aishwarya Venugopal in Bengaluru; Editing by Anil D'Silva
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
