Dissecting Target’s Q3 Earnings Call:  Top 10 Main Things

Gregg Steinhafel, Chairman & CEO

* Guests continue to consolidate trips as evidenced by a slight decline in our third quarter transactions which was offset by an increase in average ticket.

* The response to Cartwheel, our digital coupon portable, has been remarkable. Cartwheel now has nearly 3 million users.

* In Q3, we opened our eighth CityTarget.  We opened our first CityTarget stores more than a year ago and we’re seeing very strong comparable sales growth in these locations.

 

Kathryn Tesija, EVP Merchandising & Supply Chain

* Electronics had a great quarter, driven by sales in mobile devices and video games.  Apparel and home categories both saw small declines in comparable sales.

* Q3 trends were strongest in jewelry, accessories, and newborn infant toddler. In home, sales trends were strongest in domestics.

* Next week, we will be testing a special offer in Northern California stores where all apparel and accessory items will be 40% off from the timely open on Thanksgiving through close of business on Saturday. This offer will be available in 89 stores.

* Top categories for in-store pickup include baby, furniture and electronics, and our strongest markets have been New York, Chicago and Seattle.

* Following the strong guest response to our Chicago test of our Baby 360 layout which features added service and enhanced presentation, last month, we extended the test to an additional 20 stores across the country.

* We are also excited about results from our Beauty Concierge program, which we extended this month to another 95 stores in new markets across the country, including New York, New Jersey, San Francisco and Dallas-Fort Worth.

* We’ve rolled out a subscription service that allows guests to order baby diapers, training pants, wipes and formula to their doorsteps on a recurring schedule…expanding service…adding a limited assortment from categories like coffee, personal-care, paper towels, and toilet paper.

Read the Full Transcript via Morningstar

 

“Canadian consumers give Target the cold shoulder” by Marina Strauss at Globe & Mail.  “Many Canadians had shopped at Target stores south of the border and expected the same low prices and trendy fashions – and were disappointed on both counts.  Even when initial demand was strong, Target’s fledgling supply chain couldn’t keep up.”  Read more

 

“Jesse cracks the Costco price tag code” by Jesse Jones at King 5 News (Seattle).  “A price ending in .00 is probably the best deal you will find in the store. It means the manager wants the item out. And once it’s out, the product is gone for good. Also look for the asterisk. That means the product is discontinued. A combination of a .97 and an asterisk means you are getting a last chance good deal.”  See the Video / Read more

 

“Walmart’s 1st C-Store on track for Spring ’14 Open” by Kim Souza at City Wire.  “In the highly competitive world of retail, Wall Street continues to watch Wal-Mart’s deteriorating comp sales while other big boxes like Costco remain their “darling choice”. “Testing a c-store is a big signal to Wall Street that the company is working diligently to turn around its recent sales woes. It could also be a competitive signal to current and would-be competitors that Wal-Mart isn’t going to blindly stand by and concede sales to smaller stores any longer,” Long said.”  Read more

 

“Walmart.com Matches Amazon’s $35 Free Shipping Minimum for the Holidays” by Jason Del Rey at All Things D.  “Walmart said on Wednesday that it is lowering its free-shipping minimum at Walmart.com from $50 to $35 for the holiday season, effective on Thursday.”  Read more

 

“Sears Q3 Comp Sales Down 4%, K-mart Off 2.1%”  “The decline at Sears Domestic reflects decreases in most categories including the consumer electronics, lawn & garden, tools, home appliances and apparel categories, as well as declines at Sears Auto Centers, partially offset by an increase in the home category.”  Read more

 

“Lowe’s Restructures Canada Leadership Team” at Digital Journal. “Leadership changes at its corporate office in Toronto have taken place over the past few months and include key appointments and newly created roles in Merchandising and Marketing, Operations and Supply Chain, and Finance and Administration…The new appointments include: Nick Padovano, Igor Halencak and Tony Tutolo.”  Read more

 

“Macy’s pushes tech after daughter calls CEO ‘uncool’ “ by Alexander Coolidge at Cincy Enquirer.  “Lundgren (CEO) said they’re making so much progress (in technology), it’s changed his mind about the viability of most of the company’s stores…“If you would have asked five years ago ‘Do you think you have too many stores? – you need to close a bunch of stores,’ I would have said ‘Yes, probably so,’…(today) “If it doesn’t sell in my smallest store in Wisconsin, then I can pull that inventory and ship it to the customer from that Wisconsin store to the customer who wants it in Roosevelt Field“  Read more

 

Dissecting Dollar Tree’s Q3 Earnings Call:  Top 7 Main Things

Bob Sasser, President and CEO

* Total sales increased 9.5% to $1.885 billion, and comp store sales increased 3.1% driven by increased customer traffic.

* We’re on track with our new store opening plan for the full year 2013, which includes 340 new stores and 73 relocations.

* We now offer frozen and refrigerated product in 3,115 stores and we expect to add another 25 installations by fiscal year-end.

* Our top performing categories in the third quarter were checkouts, frozen and refrigerated products, stationery, party supplies and candy.

* We opened 10 new Deal$ stores in the third quarter ending the quarter with a net total of 214 (no $1 restriction at Deal$).

* Canada:  Opened 16 new stores and ended the quarter with 176 Canadian stores achieving our plan to grow our store count by 25% for the year…We believe the Canadian market can support up to 1,000 Dollar Tree stores.

* Dollar Tree and Deal$ Direct now offer more than 3,800 items online…Traffic on the site exceeded 5.6 million unique visitors in the third quarter, a 25% increase over the third quarter last year.

Read the Full Transcript via Morningstar

 

“Dollar Tree profits drop 19 percent, disappointing Wall Street” at UPI.  “Profits fell to $125.4 million, or 58 cents a share, down from $155.4 million or 68 cents a share in the year-ago period.”  Read more

 

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