Friday Tipsheet: Costco Call Highlights | Bee Protesters Swarm Lowe’s | Fred’s Comp -1.9%

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“Costco Reluctantly Searches the Web for Younger Shoppers” by Kyle Stock at Businessweek.  “We’re open-minded, but don’t expect us to go to everybody’s doorstep,” Galanti said. “Delivering small quantities of stuff to homes is not free. Ultimately, somebody’s got to pay for it.”  Read more

 

“Home Depot reviews policies as open carry gun rally at Texas store nears” by Carla Caldwell at Atlanta Bus. Chronicle. “Home Depot is reviewing its policies as more than 150 open carry gun enthusiasts plan to gather Saturday at a store in Texas, reports Forbes…Forbes reports Holmes later called to say Home Depot is determining whether the rally goes against the Atlanta-based company’s non-solicitation policy. “We don’t allow any group or any individual to disrupt a store’s business,” he said.”  Read more

 

“Protest:  Bee supporters to protest at Lowe’s shareholder meeting (with giant inflatable bee!) “ by Ely Portillo at Charlotte Observer.  “Beekeepers and advocates plan to protest Mooresville-based Lowe’s, Inc.’s annual shareholder meeting Friday, pressuring the home improvement retailer to stop selling pesticides they say harm bees…The protest, scheduled to precede the 10 a.m. shareholder meeting at the Ballantyne Hotel & Lodge, is set to feature beekeepers and a giant inflatable bee.” Read more

 

“More supplier brands dabbling in retail ventures” by Kim Souza at The City Wire.  “Apple does it better than anyone, but McCormick, Hershey, Jockey & Choboni are among supplier brands gleaning new insights through retail ventures.”  Read more

 

“Sam’s Club Puts Cash Rewards in Member’s Wallets”  “Sam’s Club announced the national rollout of Cash Rewards, a new program that provides $10 in Cash Rewards for every $500 spent on qualifying pre-tax purchases.  Beginning June 12, Sam’s Club Plus members will automatically be enrolled to start earning up to $500 in Cash Rewards annually, an industry-leading benefit among warehouse clubs.”  Read the release

 

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“Fred’s Q1 Comp Sales Down 1.9%”  “The front end of our stores will be re-laid with power displays and pallets, along with a faster check-out configuration, all focused on ease of shopping and designed to emphasize the advantages of shopping at Fred’s 15,000-square-foot box.”  Read the release

 

“Census Bureau:  Online Shopping and Mail Order Businesses Jump 27%”  “Employment climbed 13.7 percent to 365,508. In contrast, for the retail trade sector as a whole, which includes traditional “brick and mortar” stores, the number of establishments rose just 0.1 percent, while employment climbed 0.7 percent.”  Read the release

 

“Heard on the Call” – Highlights from Costco’s Q3 Earnings Call

 

Richard Galanti – CFO

 

Stores

After opening 60 new locations in the first half of fiscal 2014…We opened four new locations in Q3, two in the U.S., one in Louisiana and one in Texas and one each in Japan and Korea.

 

This week we are opening our sixth location in Australia in Brisbane, our 11th Korea location and our 20th Costco in Japan, so three openings outside of the U.S. this week.

 

By weekend, we will be operating 657 locations worldwide and after that and through the end of the fiscal 2014 on August 31st we expect to open six more locations, four in the U.S. and one each Canada and U.K…663 Costco’s worldwide as of August 31st.

 

Within the U.S., Southeast and Midwest were the strongest in the high single digits.

 

Sales results by category

Food and sundries, overall in the mid single digits.

 

Frozen food, candy and meat, deli were relative standouts.

 

Hardlines, which overall was just above flat, about a 0.5% up, departments with the strongest results were office and automotive, consumer electronics sales were down in the low to mid singles.

 

Within the mid to high single-digit softline comps, small electrics, domestics and apparel were standouts.

 

In fresh foods, comp sales were up 8% with produce and meat being strongest, although, inflation on the meat side.

 

Online

Continue to operate Costco Online in the four countries that I’ve mentioned in prior quarter, U.S., Canada, U.K. and Mexico, U.K and Mexico.

 

Q3 sales and profits are up, sales were up 15% year-over-year in the quarter.

 

What are members asking for online

I think the areas that we’ve grown over the last year relative to prior to that have been some limited apparel items.

 

Health and beauty aid items and perhaps another replenishable office items, K-Cups, health and beauty aids, some small office needs.

 

We are looking to see how we can get items (online) that are more regular and frequent to get people to return to costco.com and I think we are doing better.

 

Costco home delivery

I don’t think we are ever going to get your one box of Life Cereal and one box of Fruity Pebbles and two different types of half gallons of milk deliver to your doorstep at six in the morning. But there is a lot of things that we have.

 

Not everybody wants to just sit home and type in stuff to have it delivered in the morning, people like to go out and do stuff.

 

Don’t expect us to deliver to everybody’s doorstep. If others want to, we will be happy to accommodate and help them do that with our stuff.

 

On holding down prices:  We don’t sit down and kind of optimize everything. We are merchants. There are key price points and that’s how we do it.

 

Gas:  a $12 billion or $13 billion business for us.

 

Organic:  The challenge is the supply, frankly. There is not enough supply but if we can show great value, we will figure it out.

 

Organic fresh ground beef:  And to our pleasant surprise, 75%, 80% of these sales in this new item was truly incremental.

 

New store in Spain:  So far so good. We only were there for two weeks. We’ve had good sign-ups, not like Japan and Korea but very, very good in our mind.

 

Read the Full Costco Q3 Transcript via Seeking Alpha

 

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About Eye-on-Retail

Eye-on-Retail is a daily tipsheet that is must-read material for thousands of Retail Merchants/Executives every weekday morning. Eye-on-Retail is unique because it’s timely, smart and fun. It’s created bright and early every morning and delivered around 7 am CST. We love data, earnings reports, executive presentations and stories off the beaten path that get at what’s really happening in the world of retail. Enjoy!

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Thursday Tipsheet: Costco US Comp +5% | Sam’s CEO #64 in Power | Target’s Digital Council

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“Costco Q3 Comp Sales +5% in U.S.”  “Net sales for the quarter increased seven percent, to $25.23 billion, from $23.55 billion last year. Net sales for the first thirty-six weeks increased six percent, to $75.46 billion, from $71.10 billion last year.”  Read the release

 

CNBC:  “Costco results miss estimates as costs rise”  “Warehouse club operator Costco Wholesale reported third-quarter results below analysts’ estimates hurt by an increase in merchandise costs and other expenses.”  Read more

 

“The World’s 100 Most Powerful Women (Sam’s Rosalind Brewer #64…)” at Forbes.  See the Top 100 List

 

“Target names new digital advisory council, will hire 50 software engineers” by Kavita Kumar at Star-Tribune.  “The advisory council includes Ajay Agarwal, managing director of Bain Capital Ventures; Amy Chang, CEO of Accompani, formerly of Google’s analytics unit; Roger Liew, chief technology officer of Orbitz Worldwide; and Sam Yagan, CEO of the Match Group and OkCupid.  The council will meet quarterly as a group with Target’s omnichannel team and other leaders. The council members will serve two-year terms with an optional third year.”  Read more

 

“Walmart CEO promises more e-commerce acquisitions” by Tom Huddleston Jr. at Fortune.  “McMillon also reportedly expressed some interest in buying a 3-D printing company at some point. Such a deal would be palatable “in some cases,” as the company could use the printers to make replacement part for certain products while customers could print other products right in the store.  Wearable technology and connected home products could also prove to be attractive categories for the retail giant in the future, the CEO said.”  Read more

 

“Firefighters Had to Abruptly Leave Costco on an Emergency Call. When They Went Back to Pay, This Note Was Waiting for Them” at The Blaze.  “When the firefigthers returned to the store half an hour later, wearing camouflage-patterned shirts with the American flag and determined to still have their steak, corn and watermelon, they were surprised, according to KOVR-TV. Someone had paid their $125.25 bill.” Read more

 

Study: 37% of millennials would rather shop at the mall, only 27% would rather shop online by Krystina Gustafson at CNBC.  “That compares to 32 percent of older non-millennials who would rather buy online, and 23 percent who would rather visit the mall.  “The mall isn’t dead for millennials,” said Mark Treschl, president and chief technology officer at OpinionLab.”  Read more

 

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Market Force Survey: Walmart Most Shopped Grocer, Trader Joe’s #1 in Customer Satisfaction by Kim Souza at The City Wire.  “Publix ranked the highest for atmosphere and speedy checkouts. Aldi was the clear leader in low price and best private label. Costco ranked highest for quality beef, while H-E-B and Publix pulled high marks in fresh produce. Wal-Mart was lauded for its one-stop shopping experience. ShopRite received the highest marks for sales and promotions.”  Read more

 

“7 of 10 on Target’s board should go, proxy adviser recommends” by Kavita Kumar at Star-Tribune.  “A prominent proxy adviser has recommended that Target Corp.’s shareholders oust seven of 10 board members at the retailer’s annual meeting next month, saying that those directors failed to protect the company against a massive data breach last year.”  Read more

 

Japan “Retail Sales Plummet 13.7% in April After Consumption Tax Kicks-In” at Bloomberg.  “Sales in April fell 4.4 percent from a year earlier, with drops in all sectors including autos, clothing, food and beverages.”  Read more

 

Random:  “Here Are The States Where People Are Having The Most Babies” by Lauren Friedman at Business Insider.  “When adjusted by population, the rate of births is the highest in Utah, with 17.6 births per 1,000 people — significantly higher than the national rate of 12.5.”  Read more

 

***

About Eye-on-Retail

Eye-on-Retail is a daily tipsheet that is must-read material for thousands of Retail Merchants/Executives every weekday morning. Eye-on-Retail is unique because it’s timely, smart and fun. It’s created bright and early every morning and delivered around 7 am CST. We love data, earnings reports, executive presentations and stories off the beat and path that get at what’s really happening in the world of retail. Enjoy!

Send story tips, news releases, comments & questions to: info@shiftmarketinggroup.net

Wednesday Tipsheet: Wmart Cuts 750 in Can. | Costco Snags Hillary | China E-com +52%

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“Walmart Cuts 750 Jobs in Canada” by Kim Souza at The City Wire.  “The staff reductions represent less than 1% of total market employment and another 1,300 employees were promoted and 200 store managers were added, according to Alex Roberson, spokesman for Wal-Mart Canada.” Read more

 

“Some Employees Are Furious At Management Payouts In Walmart’s Adchemy Acquisition” by Jim Edwards at Business Insider. “They believe that the selling price for the company was actually $30 to $40 million, and that Adchemy CEO Murthy Nukala and four top executives all got payouts of between $1.5 million and $2 million in the deal. Some former employees have joined a private Facebook group inside which they are discussing potential legal action.” Read more

 

“Home Depot: 10 Weeks Running as Radio’s #1 Advertiser” at Radio Ink.  “The Home Depot cruised into the Memorial Day weekend airing over 72,000 radio commercials, more than doubling the 34,264 aired by second-placed Macy’s. Home Depot’s big-box competitor Lowe’s was third with 32,000.”  Read more

 

“China’s E-commerce Sales Surge 52% in First Four Months of 2014” at SF Gate.  “It compares with 12 percent growth in the nation’s total retail sales, the slowest pace in a decade.” Read more

 

“Costco Snags Hillary Clinton for Book Tour” by Ruby Cramer at BuzzFeed.  “Hillary Clinton has added another stop to her upcoming book tour: a two-hour event at a Costco warehouse in Northern Virginia’s Pentagon City.  The stop at Costco is scheduled for June 14, from 11 a.m. to 1 p.m., according to the store’s “author signing” webpage. A Clinton spokesman confirmed the event.” Read more

 

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“Target to offer e-books” by Hadley Malcom at USA Today.  “The service will be targeted at women, especially young professionals and moms of the coveted Millennial generation. Target is vague on the details at this point, saying more will be revealed this summer.” Read more

 

“Christmas already? Retail gambles on consumer mood” by Krystina Gustafson at CNBC.  “I think that what we’re seeing early would be that there’s slight optimism for the holiday season, and the order levels are reflecting that,” said Steve Barr, PwC’s U.S. retail and consumer practice leader. “[But] it’s a very long way away and a lot can happen between now and then.” Read more

 

“Amazon Gets Schooled on Advertising” by Garet Sloan at Ad Age.  “Amazon has established ties with advertisers, media holding companies and brands, but marketing is still only a small part of its barely profitable enterprise. (Alibaba made $3.5 billion last year; Amazon made $274 million.)  “You can advertise on Amazon right now, but they don’t really push it very hard,” an agency source said. “They’re very proprietary about the platform and data.” Read more

 

“Home Depot President Craig Menear Sells $1.18 Mil in Stock” at Insider Trading Wire.  “U.S. Retail reported a net SELL trade of HD with a net transaction amount of $1,180,452. Net non-zero shares traded: 14916.” Read more

 

“Walgreen executive joins TreeHouse Foods” at Chicago Tribune.  “TreeHouse Foods said Tuesday it has hired Rachel R. Bishop, the former head of retail development at Walgreen, as its new Chief Strategy Officer.  Bishop had been with Deerfield-based Walgreen Co. for five years. Prior to that, she was a consultant at McKinsey & Company.” Read more

 

***

About Eye-on-Retail

Eye-on-Retail is a daily tipsheet that is must-read material for thousands of Retail Merchants/Executives every weekday morning. Eye-on-Retail is unique because it’s timely, smart and fun. It’s created bright and early every morning and delivered around 7 am CST. We love data, earnings reports, executive presentations and stories off the beat and path that get at what’s really happening in the world of retail. Enjoy!

Send story tips, news releases, comments & questions to: info@shiftmarketinggroup.net

Tuesday Tipsheet: Glassdoor Likes Costco | Amazon-Proof? | Tax-Proof

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“Tampa firm designs first Walmart To Go convenience store” by Susan Thurston at Tampa Bay Times.  “Based in Tampa’s Rocky Point, Api(+) started consulting for the retail giant in 1997. It has worked on every store format, including the smaller supercenter at Dale Mabry Highway and Waters Avenue, which became a model for others in urban and suburban areas nationwide.” See the pics / Read more

 

“Military retailer AAFES hopes to expand online shopping to more veterans” by Maria Halkias at Dallas News. “AAFES, the U.S. military’s largest retailer, is asking the Pentagon to allow it to offer online shopping to all honorably discharged veterans. The site is now available only to active service members, retirees and disabled veterans.  If Shull gets his way, more than 22 million veterans, including 3.3 million in Texas, could be added to the pool of potential shoppers.”.  Its businesses don’t charge sales taxes, which gives its website an edge as more states require Amazon.com and others to collect sales taxes online.” Read more

 

“Glassdoor’s New Top 25 List for Compensation (Costco #2)”  See the Top 25 list

 

“Glassdoor:  Costco Outshines Target & Walmart” by Susan Adams at Forbes.  “…the big box retailer stands out among its peers, with its 4.4 rating, compared to Target, which scored 3.1 and Wal-Mart, which came in at 2.7.”  Read more

 

“As customers grumble about Target, we check the aisles” by Francine Kopun at The Record (Canada).  “To test that, the Star shopped a Target in Toronto on Thursday and one in Buffalo, N.Y. on Friday to see whether there is a big price difference, as some consumers claim.  Based on the unscientific survey of about a dozen items, including items in women’s clothing, men’s clothing, children’s clothing, handbags, footwear, make-up and seasonal items, there was little or no difference. There wasn’t even a difference in price that would account for the exchange rate between U.S. and Canadian currencies.” Read more

 

“Amazon-proof retailers?” by Jim Cramer & Lee Brodie at CNBC.  “But perhaps what resonated with Cramer most is that “Home Depot said on its conference call that May demand was very robust.”…”If you go online to its amazing website you will know exactly what I am talking about. The site, built in conjunction with Salesforce.com, allows you to connect with the sales people and with other customers to learn more about products. I am calling it crowd-sourced hardware.” Read more

 

“Previous Home Depot CMO Named Executive VP of Marketing at Staples”  “(Frank) Bifulco previously served as Chief Marketing Officer at Home Depot. He has held marketing leadership positions at Coca-Cola and Timberland. In addition, he was president of North American sales at Hasbro. Bifulco is a graduate of the U.S. Military Academy at West Point and holds master’s degrees from Cornell University and Central Michigan University.” Read the release

 

“Meet 1 Large Retailer that Surprisingly May be Walking Itself to the Grave” by Brian Sozzi at Belus.  “Many things need to change at Bed Bath & Beyond…From sloppy clearance zones, to a store littered with yellow clearance signs, one is left with the impression the company is over-ordering inventory and its initiatives are not driving the intended results.”  See the pics / Read more

 

“In the standoff between Amazon and Hachette, the customer comes last” by Adam Lashinsky at Fortune.  “Even if Hachette were behaving badly, I’m scratching my head trying to figure out in what strange universe Amazon believes that making it difficult for its customers to buy Hachette’s products is consistent with “customer obsession.” I’m trying to understand how Amazon thinks this will help it “earn and keep customer trust.” Read more

 

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Eye-on-Retail is a daily tipsheet that is must-read material for thousands of Retail Merchants/Executives every weekday morning. Eye-on-Retail is unique because it’s timely, smart and fun. It’s created bright and early every morning and delivered around 7 am CST. We love data, earnings reports, executive presentations and stories off the beat and path that get at what’s really happening in the world of retail. Enjoy!

Send story tips, news releases, comments & questions to: info@shiftmarketinggroup.net

 

 

Friday Tipsheet: Top 100 Brands | Wmart’s Ruiz Speaks | Costco: Less Smoking

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“BrandZ Top 100 Most Valuable Global Brands 2014 (Amazon #10, Walmart #22, Home Depot #40…)”  See the Top 100 List

 

“Target Poaches IPG Mediabrands Exec Kristi Argyilan” by Natalie Zmuda at Ad Age.  “Kristi is known nationally as a transformational, digitally savvy marketer,” Jeff Jones, CMO at Target, said in the statement. “As Target continues to accelerate our efforts to innovate and evolve, her expertise in leveraging today’s dynamic media mix will help us connect with Target’s guests in new and different ways.”  Read more

 

“Walmart COO Gisel Ruiz talks heritage, customer demands and price focus” by Kim Souza at The City Wire.  “My dad learned to speak English from watching baseball games on television. He loved the game. My mom learned to speak English from watching soap operas — ‘The Young and Restless,’” Ruiz said.  She said watching her family struggle up the socio-economic ladder from migrant workers to business owners prepared her for the challenges and hard work she faces daily at Wal-Mart.”  Read more

 

“Costco:  Tobacco products have been phased out at more than 50% of stores in U.S. – Seattle is next” at KIRO TV. “Galanti said about 90 percent of all the company’s tobacco’s sales are to retailers like convenience stores. He said Costco does not plan to get out of the cigarette business entirely.”  Read more

 

“Stanford Study:  Too Many Product Images Can Hurt Online Sales”  “When we see one picture, we usually focus on the big-picture aspects like style and the overall look of the product,” the researchers explained. “For the many products that are distinguished by big-picture elements such as style or design or brand, a change in visual processing style to a component level moves our focus away from the aspects that distinguished those products in the first place.”  Read the release

 

“Happened Yesterday: Home Depot’s Annual Meeting of Shareholders”  Listen to the Webcast

 

“Home Depot CEO Frank Blake Hosts Annual Meeting of Shareholders” at Seeking Alpha.  Read the Transcript

 

“Sears:  Nearly Three-Quarters of Q1 Sales Came From Shop Your Way Loyalty Program” by Krystina Gustafson at CNBC.  “According to CEO Eddie Lampert, members of Sears’ Shop Your Way loyalty program made up nearly three-quarters of eligible sales at Sears’ and Kmart’s domestic locations for the first quarter, up from 68 percent a year ago and the highest on record.”  Read more

 

“Dollar Tree Q1 Comp Sales +2%”  “The Company estimates sales for the second quarter of 2014 to be in the range of $1.97 billion to $2.02 billion, based on low-single digit positive comparable store sales.”  Read the release

 

“Fresh Market Q1 Comp Sales +2.5%” at MarketWatch.  “Sales rose 18% to $431 million, benefiting from special promotions and the Easter holiday partially offsetting the negative effect of harsh winter weather.”  Read more

 

“Hibbett Sports Q1 Comp Sales +4.1%”  “Net sales increased 9.1% to $261.9 million for the 13-week period ended May 3, 2014, compared with $240.0 million for the 13-week period ended May 4, 2013.”  Read the release

 

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Eye-on-Retail is a daily tipsheet that is must-read material for thousands of Retail Merchants/Executives every weekday morning. Eye-on-Retail is unique because it’s timely, smart and fun. It’s created bright and early every morning and delivered around 7 am CST. We love data, earnings reports, executive presentations and stories off the beat and path that get at what’s really happening in the world of retail. Enjoy!

Send story tips, news releases, comments & questions to: info@shiftmarketinggroup.net

Thursday Tipsheet: Target & Lowe’s Call Highlights | Bezos Takes Stage | Retail a ‘Prisoner’

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“Interview:  Target’s Interim CEO Speaks with Star Tribune” by Kavita Kumar.  “John Mulligan is fully aware of those embarrassing photos floating around the Internet — the ones showing empty shelves at some of Target’s Canadian stores and visibly illustrating the company’s inventory struggles up north.  “I’ve seen those for far too long, and I would tell you I have the same reaction as the entire Canada team: it’s unacceptable,” Target Corp.’s interim chief executive said Wednesday in an interview with the Star Tribune.”  Read more

 

“Bezos: Alibaba IPO won’t affect Amazon; 10,000 robots coming to fulfillment centers” by Emily Parkhurst at Puget Sound Bus. Journal. “Jeff Bezos took the stage at the Seattle Repertory Theatre on Wednesday for the company’s annual shareholders’ meeting…Amazon has started offering tours of its fulfillment centers. So far, 14,000 people have signed up to take these tours, Bezos said, and they’re sold out through March 2015. “We’re looking at ways to increase supply to meet demand there,” Bezos said.”  Read more

 

“Retail a ‘prisoner’ of quarterly report: Ex-CEO” by Krystina Gustafson at CNBC.  “Former Bloomingdale’s CEO Michael Gould said there’s another underlying issue in the sector that’s stifling its success: There’s not enough risk-taking or newness. “You’re a prisoner of the quarterly report,” he said. “The problem in the business today is that risk-taking and fashion is an oxymoron.” Read more

 

“Could No. 2 Lowe’s ever catch No. 1 Home Depot?” by Ken Elkins at Charlotte Bus. Journal.  “That was the question that I posed today to Robin Diedrich, consumer discretionary analyst for Edward Jones. Her answer: Yes … well maybe.“It definitely can be done,” Diedrich says. “There is an opportunity to catch back up with sales and sales per square foot.” Read more

 

“Wal-Mart’s Founders Don’t Control Their Family Photos (and Neither Do You)” by Susan Berfield at Bloomberg.  “Bob’s Studio of Photography in Fayetteville, Ark., has negatives, proofs, and prints of more than 200 photographs, including images of the Waltons as children, the parents of founder Sam Walton…Now the family and the retail giant (in the form of the Walmart Museum) have filed a lawsuit alleging that those photos belong to them, not to the studio.”  Read more

 

****A message from Juicebar Chargers – Get ready for Hurricane season!   Juicebar’s Hurricane Travel Charger holds enough juice to weather a full week’s worth of hurricanes, blizzards and power outages! With up to 5 full smartphone charges or a full tablet charge and more, Juicebar’s Hurricane is the perfect sidekick when life disconnects you from the grid. Peggable, shipper display or open-stock. See the full lineup: www.juicebarchargers.com. See the video. Email: info@shiftmarketinggroup.net for program details.

 

“Best Buy U.S. Comp Sales Fall 1.3%, Online +29%”  “Sharon McCollam, Best Buy EVP, CAO and CFO, commented, “As we look forward to the second and third quarters, we are expecting to see ongoing industry-wide sales declines in many of the consumer electronics categories in which we compete.”  Read the release

 

“Sears to Close Around 80 More Stores this Year – Comp Sales Up .2%” by Michael Calia at WSJ.  “Sears domestic same-store sales rose 0.2% in the period ended May 3—its first such growth in more than a year—compared with a 2.4% decline last year, hurt by a continuing slump in consumer electronics. Kmart felt a similar impact from the category, as its same-store sales fell 2.2%.” Read more

 

“Heard on the Target Call” – Highlights from Yesterday’s Target Q1 2014 Earnings Call”

 

John Mulligan – Interim President & CEO

The Board and our team are aligned on three priorities. The first is growing traffic and sales in our U.S. segment…second, we must improve our Canadian segment performance…Finally, we need to accelerate our digital transformation and become a leading Omni-channel retailer.

 

First quarter penetration on our REDcards was 20.4%, up 3.3 percentage points from last year.

 

Second quarter comparable sales should be flat to slightly positive.

 

Canada:  we expect to report a single-digit decline in second quarter Canadian segment comparable sales.

 

On sales tax, we definitely see an impact when Amazon collects sales tax.

 

Kathryn Tesija – Chief Merchandising and Supply Chain officer

Our efforts produced mixed results for the quarter, reflecting unfavorable weather in February, followed by the strongest results in March and weaker than expected Easter sales in April.

 

First quarter performance was meaningfully better than the fourth quarter as comparable sales improved by more than 2 percentage points and comparable transactions improved even more.

 

In our U.S. business, first quarter comparable sales were strongest in hard lines, driven by a mid-single-digit increase in electronics.

 

Comparable sales in our less discretionary food, health and beauty categories were slightly positive, while home and apparels saw small comp declines, with our digital channels’ first quarter sales were strongest in health and beauty and home.

 

U.S. segment comparable traffic was down a little more than 2%, which was nearly offset by a healthy 2.1% increase in basket size.

 

First quarter digital visits were up more than 20% from a year ago, which according to comScore was the fastest growth among a group consisting of Target and seven of our largest online competitors.

 

The share of digital visits from a mobile phone or a tablet continues to grow and in the first quarter, almost two-thirds of our digital traffic was on one of these devices.

 

In March, Target.com launched over 2,000 new furniture items from Safavieh.

 

When Frozen was released on DVD and Blu-ray in March, it became the most successful first day release for any movie in Target history.  In the first month alone, we sold more units than we sold in the first year of Finding Nemo, which previously held the record for our biggest release.

 

The Frozen soundtrack also held the number one spot throughout the first quarter, selling more units in April than all of our other releases combined.

 

We are planning to launch a guest facing $10 rush delivery pilot in June in the Minneapolis, Boston and Miami markets, offering guests the ability to order as late as 1.30 p.m. in the afternoon and receive a delivery of qualifying items between 6.00 p.m. and 9.00 p.m. the same day. Later in the year, we plan to rollout standard shipping from 136 stores in 38 markets across the country.

 

In entertainment and electronics, we’re testing a new layout… This redesigned experience is currently being tested in 17 stores and will determine future plans based on guests feedback.

 

We plan to roll out enhanced apparel displays to 50 additional stores this summer and several hundred more stores this fall.

 

Team member call outs: …putting all of our style business together, both merchandising and design all under Trish Adams, having our essentials and hard lines business all under Jose Barra, having inventory and all operations under Keri Jones, and then our Omni-channel efforts all under Casey Carl, are really important to be able to leverage that expertise and move very quickly in improving our results.

 

Read the Full Target Transcript via Seeking Alpha

 

“Heard on the Lowe’s Call” – Highlights from Yesterday’s Lowe’s Q1 2014 Earnings Call”

 

Robert Niblock – Chairman, President & CEO

 

In the south and west, where weather was more favorable, comps were in the mid single digits. The northeastern part of the country which was the most impacted by poor weather conditions during the quarter experienced negative comps.

 

For the quarter, seven of our 12 products categories had positive comps

 

Overall indoor products which accounted for roughly 65% of sales had solid performance with positive comps of approximately 2%.

 

In areas of the country where weather was more cooperative, indoor comps were mid-single digits.  Outdoor products declined approximately 1.5% overall.

 

We continue to see strength in our ProServices business which outperformed the Company average during the quarter and I am pleased to share that our team in Canada delivered double digit comps in local currency for the fourth consecutive quarter.

 

Performance has already improved in May…and keen focus on productivity and flow through continue to give us confidence in our business outlook for 2014.

 

Our dot com business was up a little more than 25% in the quarter.

 

We still continue to see about 50% of what is bought online is actually picked up in store.  There’s about another 20% that is delivered from the store up to the consumers’ homes. If you think about it, about 70% of what we sell online is fulfilled through store channels.

 

We think the weather impacted our Q1 sales by approximately 150 basis points, about 35% of our sales are outdoor or mix related.

 

Q2 looks like it’s going to be our highest comp in quarter at this point.

 

Mike Jones – Chief Customer Officer

 

We drove strong sales in fashioned fixtures, we saw particular strength in light bulbs driven by LED and other energy efficient products and in fashioned plumbing products such as bath faucets, vanities and toilets.

 

We also drove solid performance within tools and hardware particularly in power tools.

 

Our second area of focus is to better capitalize on the pro market which is growing faster than the consumer market, so we are enhancing our product and service offering for this important customer.

 

The mix in customer shopping electrical wire is roughly 70% pro and 30% DIY. We are losing share in this core category, particularly with electricians, so within last year’s line review, we focused on why and what we needed to change.

 

Pro: we added to our selection of wire types, gauges and colors as well as full rows of wire and cable to supplement the offering of wire sold by the foot along with contractor packed pricing so pros could benefit from buying bulk rolls.

 

This quarter, we will relaunch lowesforpros.com, testing it with our pro customers before rolling it out more broadly.

 

Patio furniture:  we removed 15 bays of steel racking to create a showroom fill with about 35% more open space which is made possible by our larger store format. It helped customers envision their outdoor space.

 

Patio furniture:  we have determined brand to be a less important shopping attribute for outdoor living products, we can leverage our direct sourcing capability to buy these high quality products at a competitive cost which should benefit both sales and gross margin.

 

We just recently introduced stain master pet protect, and exclusive in the home center channel. This carpet is made with a new fiber specifically designed to withstand the toughest pet stains.

 

Brand call outs:  Bosch power tools,  South Wire hand tools, Valspar Reserve

 

Bob Hull – CFO

Comps were essentially flat in February, 2.5% in March and flat in April.

 

We believe that we’ll recover the majority of the Q1 sales shortfall. As a result, we have not adjusted our outlook for the year.

 

Read the Full Lowe’s Transcript via Seeking Alpha

 

***

Eye-on-Retail is a daily tipsheet that is must-read material for thousands of Retail Merchants/Executives every weekday morning. Eye-on-Retail is unique because it’s timely, smart and fun. It’s created bright and early every morning and delivered around 7 am CST. We love data, earnings reports, executive presentations and stories off the beat and path that get at what’s really happening in the world of retail. Enjoy!

Send story tips, news releases, comments & questions to: info@shiftmarketinggroup.net

 

 

 

 

 

 

Wednesday Tipsheet: Lowe’s Comp +.9%| H.Depot Call Highlights | Target Can. – Out with the Old…

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Q1 2014 Target Corporation Earnings Conference Call – Wednesday, May 21, 2014 10:30 a.m. ET  Listen to Webcast

 

“Lowe’s Comp Sales Up .9% – ‘Reaffirms’ Sales Outlook  – May Performance ‘Improved’ ”  “Sales for the first quarter increased 2.4 percent to $13.4 billion from $13.1 billion in the first quarter of 2013, and comparable sales increased 0.9 percent…”Performance has improved in May which, together with our strengthening execution, gives us the confidence to reaffirm our sales and operating profit outlook for the year,” Niblock added.”  Read the release

 

CNBC Headline:  “Lowe’s posts earnings and revenue miss” “Lowe’s posted quarterly earnings and revenue that missed Wall Street expectations Thursday, due in part by a lower tax rate.”  Read more

 

Q1 2014 Lowe`s Earnings Conference Call – Wednesday, May 21, 2014 9:00 a.m. ET  Listen to Webcast

 

“Target Canada: How Barbie SUVs Snarled Supply Chain Traffic” at Reuters.  “This insiders’ view, which has not been reported before, may partially explain why shoppers have been disappointed by empty shelves at some of Target’s Canadian stores. It is a cautionary tale for other U.S. retailers who may be considering a big push into Canada.”  Read more

 

“Dick’s Sporting Goods shares tumble after earnings report” by Paul J. Gough at Pittsburgh Bus. Times.  “Why the drop? CEO Edward Stack said in a conference call Tuesday with analysts it had to do with weaknesses in Dick’s golf and hunting business. Stack said the hunting declines were expected but it’s a much tougher row to hoe with the golfing segment. It’s down $34 million below Dick’s expectations for the quarter.”  Read more

 

Target – Out with the Old, In with the New…

 

“Target’s Canada Chief Out “Effective Immediately” “ by Kavita Kumar at Star-Tribune.  “We want to make sure we have the right product in the right place at the right time,” Jenkins said. “Then we will have an opportunity to reintroduce ourselves to the Canadian marketplace.”  Read more

 

“Meet Mark Schindele, Target’s new top man in Canada” by Jim Hammerand at Minn./St. Paul Bus. Journal.  “Schindele joined Target Corp. in 1999 as a bath and rugs buyer after five years with Macy’s…climbed the Target ladder to senior buyer and then director of merchandise planning and presentation. He entered the executive world as vice president of domestics in 2006, and two years later became senior vice president of hardlines…As senior vice president of merchandising operations since 2011, he pushed the PFresh grocery initiative and helped launch the small-store-format CityTargets and Target Express.” Read more

 

“A Bullseye View Interviews New Canada Chief”  “Will you be relocating to Toronto?  I will be in Canada full time and my family is planning to join me this summer. I have school-aged kids, so we’re in the midst of figuring out the details.  What are some of your favorite things to do outside of work?  I love being with my family and I can’t get enough of the outdoors. I also love taking in the action at the track. You’ll find me glued to the Indianapolis 500 this weekend.”  Read more

 

“Target development chief John Griffith to retire” by John Vomhoff Jr. at Minn./St. Paul Bus. Journal.  “Target said Griffith has agreed to serve as a consultant on Target’s engagement with economic development organizations in the Minneapolis area.” Read more

 

“Amazon vs. Target:  Head-to-Head on Subscription Services” by Courtney Reagan at CNBC.  “We looked at a basket of six items, shown in the table, and found that Amazon was less expensive for those particular items, coming in $23.34 cheaper without the REDcard savings, and $17.49 with the extra REDcard savings.”  Read more

 

“Target is bringing its in-store clinics to Texas” by Maria Halkias at Dallas News.  “One-stop shopping in eight local Target stores this fall will include treatment for 60 minor illnesses and vaccinations…The company operates about 70 clinics in Florida, Illinois, Maryland, Minnesota, North Carolina and Virginia.”  Read more

 

“Heard on the Home Depot Call” – Highlights from Yesterday’s Home Depot Q1 2014 Earnings Call 

 

Frank Blake – Chairman & CEO

We’ve talked about the bathtub effect that weather can have on our spring seasonal business, where weak sales in the first quarter are counterbalanced by strength in the seasonal business in the second quarter. We expect the same effect to be true this year.

 

Our northern division, our largest division negatively comped, driven by weakness in seasonal and outdoor categories, but in our southern and western divisions we not only positive comped, but we actually did better than we expected.

 

Canadian business posted a positive comp in local currency for the quarter. In Mexico, our team posted their 42nd consecutive quarter of positive comps. They also inaugurated an online e-commerce site piloting it now in limited geographies, but eventually planning for coverage across the country.

 

Our dotcom business had sales growth of almost 40% for the quarter. We are consistently seeing over 3 million visits per day.

 

Craig Menear – President, U.S. Retail

15 of our 19 U.S. regions posted positive comps.

 

In the western and southern divisions we had solid positive comp performance, almost twice the U.S. average. The departments that outperformed the company’s average comp were tools, electrical, plumbing, kitchens, bath, hardware, decor, building materials, millwork and lighting. Flooring, indoor garden and paint were positive, but below the company average, while outdoor garden and lumber were negative.

 

Total comp transactions grew by 2.1% for the quarter, while average ticket increased 0.6%.

 

Transactions for tickets over $900 also representing approximately 20% of our U.S. sales were up 2.5% in the first quarter.

 

Our Pro Xtra loyalty program continues to gain traction, and we now signed up over 1.5 million pros.

 

Brand call outs:  CREE light bulbs, Toro, Glidden, KitchenAid

 

Carol Tome – CFO

Comps for U.S. stores were positive 3.3% for the quarter with positive comps of 2.8% in February, 4.6% in March and 2.8% in April.

 

May sales are robust. So today we are reaffirming the sales guidance relayed out our fourth quarter earnings call and we expect fiscal 2014 sales to increase by approximately 4.8% with positive comps of approximately 4.6%.

 

The sales growth for dotcom year-on-year was $232 million, now making up 4.2% of our total penetration. And for the U.S. the comp contribution is a little over 100 basis points.

 

If you look at the $232 million of (dotcom) growth that we saw in the first quarter, almost a 100 million of that came from BOSS-related sales (buy online ship to store).

 

(on interactive in-store technology) In total 450 additional stores, this year will have some sort of an appliance change made to them either more square footage or another kiosk. So, yes, the technology is a way that we can help drive sales.

 

We should look at home price appreciation harder than we do turnover. We can turnover with only 4% of unit. Home price appreciation really impacts the way people spend money on their homes.

 

Kevin Hoffman – President Online

(regarding online sales by region) Very, very little difference regionally…not as big of regional differences you would see in the physical stores.

 

Read the Full Earnings Transcipt via Seeking Alpha

 

***

Eye-on-Retail is a daily tipsheet that is must-read material for thousands of Retail Merchants/Executives every weekday morning. Eye-on-Retail is unique because it’s timely, smart and fun. It’s created bright and early every morning and delivered around 7 am CST. We love data, earnings reports, executive presentations and stories off the beat and path that get at what’s really happening in the world of retail. Enjoy!

 

Send story tips, news releases, comments & questions to: info@shiftmarketinggroup.net

 

Follow @retaileyeretail

 

 

 

 

 

Tuesday Tipsheet: Comps: H.Depot +3.3%, Dick’s +1.5%, Staples -4% | Wmart MBA’s | Target’s Parachute

/in

 

“Home Depot US Comp Sales +3.3% in Q1”  “The Home Depo reported first quarter of fiscal 2014 net earnings of $1.4 billion, or $1.00 per diluted share, compared with net earnings of $1.2 billion, or $0.83 per diluted share, in the same period of fiscal 2013. For the first quarter of fiscal 2014, diluted earnings per share increased 20.5 percent from the same period in the prior year.” Read more

 

“Home Depot Sales, Profit Grow, but Miss Views” by Michael Calia at WSJ.  “The first quarter was impacted by a slow start to the spring selling season,” Chairman and Chief Executive Frank Blake said. “But we had solid results in non-weather impacted markets and expect our sales for the year to grow in line with the guidance we previously provided.”  Read more

 

“Home Depot Q1 Earnings Call at 9am EST”  Listen to the Webcast

 

“Dick’s Sporting Goods Reports Q1  Comp Sales Up 1.5%” ” Same store sales in the first quarter of 2014 for DICK’S Sporting Goods increased 2.3%, while Golf Galaxy decreased 10.4%.  “Our difficulties this quarter were isolated to two categories: golf and hunting,” said Edward W. Stack, Chairman and CEO. “After a very challenging first quarter in golf last year, we expected some further headwinds and only modest improvement, but instead we saw a continued significant decline. In the case of hunting, we planned the business down based on last year’s catalysts, but it was even weaker than expected.”  Read the release

 

“Dick’s Sporting Goods Q1 Earnings Call at 10am EST”  Listen to the Webcast

 

“Target discloses ex-CEO’s golden parachute” by Nick Halter by Minneapolis/St. Paul Bus. Journal.  “Steinhafel will get $21.3 million from the company, but will have to give back $5.4 million in enhanced early retirement benefits under a supplemental pension plan.”  Read more

 

“Walmart plans to hire hundreds for big expansion of digital operations in CA” by George Avalos at Oakland Tribune via San Jose Mercury News.  “The retail giant’s eCommerce unit has struck a deal to lease about 107,000 square feet on West California Avenue near the corner of Central Expressway and Mathilda Avenue.  “We are planning to expand to about 1,000 employees in Sunnyvale,” said Bao Nguyen, a spokesman with Walmart Global eCommerce, whose operations are headquartered in San Bruno.  At present, the eCommerce unit has about 550 employees in Sunnyvale at 600 W. California, Nguyen said.”  Read more

 

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“Wal-Mart scours business schools for summer interns, top talent” by Kim Souza at The City Wire.  “This year’s crop of finance and strategy interns were chosen from 300 candidates and are set to begin their 12-week stint in Bentonville on May 28.  The MBA interns selected hail from prestigious business schools including, Northwestern University, Harvard, Massachusetts Institute of Technology, University of North Carolina, Dartmouth, University of Texas and Duke.”  Read more

 

“How Target is Helping Cultivate Tomorrow’s Great Designers” at A Bullseye View.  “Only 10 designers — or “incubators,” as they’re called — are chosen to participate in the prestigious program every few years, so if you’re name is on that list, you’re one to watch!” Read more

 

“Staples profit falls 44 percent on stronger dollar, store closures”  “Comparable store sales, which exclude sales in Staples.com, decreased four percent, reflecting a four percent decline in traffic and flat average order size versus the prior year.” Read the release

 

“Office Depot, Inc. Launches Combined Weekly Ad for Office Depot, OfficeMax Stores”  “Office Depot and OfficeMax retail customers saw something new in their newspapers Sunday: a single, combined insert representing great savings on products and services being offered at both brands’ retail stores.”  Read the release

 

“Deloitte 2014 American Pantry Study: 86% of Consumers Have a Set of Brands They Consider & Purchase Whichever One is on Sale”  See the report

 

***

Eye-on-Retail is a daily tipsheet that is must-read material for thousands of Retail Merchants/Executives every weekday morning. Eye-on-Retail is unique because it’s timely, smart and fun. It’s created bright and early every morning and delivered around 7 am CST. We love data, earnings reports, executive presentations and stories off the beat and path that get at what’s really happening in the world of retail. Enjoy!

 

Send story tips, news releases, comments & questions to: info@shiftmarketinggroup.net