Friday Tipsheet: Target’s New Ads | Wmart Call Highlights | CVS Highest Pay Disparity


“Target’s New Ad Campaign Highlights Impact on Communities” by Kavita Kumar at Star Tribune.  “The company is ready to begin airing four spots that will run from Sunday through the end of June on cable and network channels…One of the ads features an urban high school in San Diego where Target has donated money for a community garden. In another, Target’s coffee buyer gets choked up when talking about how using direct trade coffee helps farmers invest in their families and land. And another spot is in Spanish and highlights the company’s school library makeover program.”  Read more


View from Canada:  “Wal-Mart makes gains in cutthroat grocery sector” by Marina Strauss at Globe & Mail.  “While just a year ago, retail incumbents feared the arrival of Target Corp. in Canada, today the U.S. cheap-chic purveyor is stumbling and Wal-Mart is picking away at rivals, especially in the grocery aisles. Wal-Mart’s share of the estimated $85.8-billion Canadian food and consumer products market climbed by 0.42 per cent in the 12 months ended April 19, according to researcher Nielsen.” Read more


“Competition with Costco? CEO of Boxed doesn’t think so” by Rachel Lerman at Puget Sound Bus. Journal.  “I can say, we have a great relationship with (Costco). We work together on some pretty interesting things. We have also worked together with other manufacturers and retailers on interesting things.”  Read more


Target: “A Bullseye View”:


“Security Experts Convene at Target”  “Last week, nearly two dozen of the nation’s leading cyber security experts convened in Minneapolis for a two-day Security Summit hosted by Target and moderated by The Chertoff Group.”  Read more


“How Target Fueled One Shopping Startup’s Launch”  “While the product may have just launched, Cosmic Cart has been hustling behind the scenes for a few years. Target entered the picture last year when Alex and crew got a meeting with Target executives.  The teams liked the concept so much that the Bullseye became a retail partner and also made a small investment in the startup.”  Read more


“Study:  CVS Has Largest CEO-to-Worker Pay Disparity Among Top Companies (422:1 compared to Costco’s 18:1)”  by Tom Huddleston Jr. at Fortune.  “CVS has the greatest disparity between CEO pay and the median wage of its employees among the 100 highest-grossing companies in the U.S., according to a study released Thursday by compensation research company PayScale, Inc. Merlo’s $12.1 million salary is 422 times the size of the median wage for CVS employees: $28,700.”  Read more


…See the Full List of PayScale’s CEO-to-Worker Pay Ratio


“Warren Buffett increases stake in Wal-Mart” at The City Wire. “Warren Buffett acquired 8.57 million more shares of Wal-Mart stock during the quarter ended March 31, according to a report filed with regulators on Thursday (May 15).  Buffett’s Berkshire Hathaway raised its stake 17% to 58.05 million shares of Wal-Mart during the first quarter.”  Read more


“Jim Cramer asks, has Wal-Mart lost its way?” at CNBC.  “I think a lot of people think that Wal-Mart is food stamps. Wal-Mart is unemployment extension benefits. That it’s a play on U.S. government stimulus,” he said. “I just think that it’s also a recognition that people shop elsewhere.” Read more / See the video


“Costco Accused Of Stiffing Workers On Meal Breaks” by Lisa Ryan at Law 360 (Subscription Required).  “Lead plaintiff Micah Ornelas claims Costco does not provide rest and meal periods to its warehouse employees or compensate them for the breaks as required under California law.”  Read more


“JCPenney stock spikes 25% on higher sales results” by James Covert at NY Post.  “Same-store sales, rose 6.2 percent during the first quarter, beating the company’s forecast for an increase between 3 percent and 5 percent.”  Read more


“Surprise: Nordstrom reports $140M profit for first quarter, beats analysts’ estimates” by Rachel Lerman at Puget Sound Bus. Journal.  “The company did not expect big growth for the quarter, attributing the smaller profit to costs relating to its upcoming expansion into Canada.”  Read more


“Highlights from Walmart’s Q1 ’15 Earnings Call”

Doug McMillon, CEO

Sam’s Club had a tough quarter, with lower sales than anticipated.

A bright spot this quarter was the performance of Walmart International. Net sales increased 3.4% on a constant currency basis.

In the first quarter, we grew (e-commerce) sales approximately 27%.


Bill Simon, President & EVP

…strong Easter holiday drove positive comps over the remaining 11 weeks of the quarter; that’s despite additional severe weather and about 50 basis points of continued SNAP-related headwind.

Gained 23 basis points in market share across the key categories of “food, consumables & OTC” for the 13 weeks ended April 26

On May 2, we opened the first fully tethered Walmart Express store in North Carolina.

During the quarter, we opened 13 Neighborhood Markets and 25 supercenters, including 16 new and 9 conversions. We’re on track to deliver about 115 supercenters, between 180 and 200 Neighborhood Markets and 90 to 100 Walmart Express stores this fiscal year.

Beginning Sunday, May 18, we will re-launch our Great Gas Rollback program.

Comp Sales:

Food:  Delivered strong Easter results, with double-digit sales growth in Easter candy and strength across other categories such as meat and eggs.

Health & Wellness:  +150 basis points

Hardlines & Entertainment:  Negative comp.  In the second quarter, we will re-lay our entertainment department, allocating more space and prominence to growth categories, while improving category adjacencies.

Active Wear:  Double digit comp

Shoe & Children’s Apparel:  Positive comp

We expect comp sales to remain relatively flat for the 13-week period from May 3 through August 1, 2014.

Brand call outs:  Danskin Now, Russell Athletic, Avia, Child of Mine by Carter’s, Garanimals, Rachel Ray, Farberware, Magic Bullet, Keurig


David Cheesewright, President & CEO Walmart Int’l

Walmart Canada increased net sales, but comp sales declined.

Canada: Sales were strongest in food and consumables, and according to Nielsen, we increased market share 42 basis points for the 12 weeks ended April 19.


Rosalind Brewer, President & CEO Sam’s

…one of our more difficult quarters.

Comp Sales

Dry grocery and beverage: low single-digit negative comp.

While our new sweet and salty snack offering performed well, it was not enough to offset unit declines in larger categories like beverages.

Ancillary categories had a negative impact on the quarter, due to sales declines in tobacco and tires.

There were fewer promotional events in a leading tire brand compared to last year.

Health and wellness: low single-digit positive comp.

Technology and entertainment: high single-digit negative comp.

Home, apparel and hardlines: low single-digit positive comp.

I’m excited to announce the national rollout of Sam’s Club Plus Member Cash Rewards, which goes into effect on June 12, 2014.

Furthermore, we will launch a new cash-back credit card with MasterCard on June 23, 2014, offering cardholders the opportunity to earn 5% cash back on gas, 3% back on travel and dining, and 1% on everything else.

We expect flat comp sales growth for the 13-week period ending August 1.


Read the Full Walmart Earnings Call Transcript via Seeking Alpha



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