Tipsheet: Wmart +1.6% / Sam’s +0.6% | Ellison on CNBC | Call Hlights Target & Lowe’s | Wmart SVP Q&A


Walmart Q2 Comp +1.6% / Sam’s Club +0.6% (ex. fuel) “Walmart: the seventh consecutive quarter of positive traffic, up 1.2%. Neighborhood Market comp sales increased approximately 6.5%.” Press release


…CNBC: Wal-Mart’s 2Q Earnings Top Expectations, Outlook Raised at Fox Business. “Walmart earned $1.07 a share…Analysts had expected Wal-Mart to report earnings of $1.02 a share…Wal-Mart’s online sales picked up from the first quarter, increasing 11.8 percent, but the rate of growth was slower than last year’s 16 percent lift for the comparable period.” Read more


MARVIN ELLISON ON CNBC – JC Penney’s CEO maps out three-year turnaround plan by Arriana McLymore at CNBC. “Ellison said. “What we do know is that a third of the customers buying appliances from us are brand new customers to JC Penney.”…Ellison said the company would also focus on expanding Sephora in store locations and its omnichannel business as a part of the three-year plan.” See the video interview / Read more


Best Buy celebrates 50 years with 50 hours of discounts by Krystina Gustafson at CNBC. “For 50 hours starting at 11 p.m. Eastern Thursday, the electronics chain will offer Black Friday-like deals on a swath of products available both online and in stores.” Read more


Apple’s Angela Ahrendts, Maintaining Her Low Profile, Surprises At New Store Opening by Ainsley O’Connell at Fast Company. “…For a brief quarter-hour at lunchtime, Ahrendts smiled for the cameras and took in the bustling crowds. Then, once again, she was gone.” Read more


Target’s traffic problems won’t be an easy fix by Krystina Gustafson at CNBC. “Having successfully revitalized sales in its “signature” categories of style, baby, kids and wellness, the discount retailer is now struggling to bring shoppers into its stores for two major categories that drive repeat traffic: grocery and pharmacy.” Read more


Inc. 5000 2016: The Full List ( #4, #30) See the full list


Q&A with Daniel Eckert, senior vice president of Wal-Mart Services by April Berthene at Internet Retailer. “Why are there no coupons or incentives to use Walmart Pay? What we’re finding is that our customers value time saved almost as much as the money they’ve saved in our stores. The research we did with Walmart Pay found that if you just save shoppers some time, that’s benefit enough for them to see the value to want to use it.” Read the Q&A


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PetSmart Opens First Pet Spa Store “The store features a first for PetSmart stores, a self-service dog wash where pet parents can bond as they personally bathe their pups. Pet parents can also choose from a range of grooming services…” Press release


Staples Q2 Total Company Sales -4.0% Press release


Wal-Mart’s Open Call invitation for online suppliers isn’t without challenges by Kim Souza at The City Wire. “Consultants who represented clients to Wal-Mart have told Talk Business & Politics that in the exuberance of hearing “yes” there were many details that were not made clear to the first-timers…When pressed on the issue, the retailer said merely the focus of this year’s event was to say “yes” to the online sales.” Read more


Target will spend $20 million to add private restrooms to stores by Kavita Kumar at Star Tribune. “While Smith acknowledged that it’s hard to tease apart the factors that affect sales, she said executives don’t believe the issue has had a material impact on sales…” Read more


7-Eleven Celebrates 60,000th Store Opening Press release


Doug McMillon to attend Oct. 14th opening of innovation center by Alex Gorski at The Arkansas Traveler. “Some projects being worked on now include the delivery robot and an invisible digital watermark that could speed up check out times and doing inventory at retail stores…” Read more


J.C. Penney Might Be Walking Into the Same Private Label Trap That Kohl’s Did by Phil Wahba at Fortune. “The retailer wants private brands to be 70% of sales, up from 52% now…In 2014, Kohl’s private and exclusive collections reached a peak of about 52% of sales, way up from 30% in 2005….Kohl’s has since dialed that back down (to about 48% in 2015), with the CEO telling Fortune at the time that the focus on house brands had hurt Kohl’s reputation for national brands. (At Macy’s, it’s currently about 25%.).” Read more


SpartanNash Q2 Net Sales +1.8% Press release


CST has incentive to close sale “by Monday at the latest,” sources say by Katie Burke at San Antonio Business Journal. Read more


Tipsheet Extra Stories

Coca-Cola moving 75 employees to downtown Cincy to be near Kroger

The Truth About Your Cotton Bedsheets Will Give You Nightmares

U.K.: Retail sales surge 1.4% in best July performance since 2002

Study: Subscribers to meal kit services spending 6% less at supermarkets than they did before using the service

McDonald’s Pulls Happy Meal Fitness Bands Due to Skin Irritation

Activist hedge fund demands shakeup at Buffalo Wild Wings

Kroger, CVS, and Walgreens settle lawsuit with West Virginia for $3 million

Read Tipsheet Extra Stories


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Heard on the Call(s):

Target Q2 Earnings Call Highlights

Brian Cornell

  • In the second quarter, our number one challenge was traffic
  • Electronics – we saw a double-digit decline in comp sales this quarter
    • Accounting for approximately 70 basis points of overall comp decline
    • Apple products – down more than 20% in the quarter
      • One of the first things we have had Mark Tritton do was actually spend time with our Apple partners really making sure that we are putting the right plans together for the back half of the year
  • Grocery, despite improvements…we were disappointed with our sales performance as we saw a small comp sales decline
  • Experienced soft second quarter traffic trends in the pharmacies in our stores as we completed the re-branding transition from Target to CVS
  • We saw double-digit growth in Cat & Jack sales when measured against comparable sales of Circo and Cherokee last year
  • We saw mid single-digit comp increase in women’s apparels
  • Changes we have made to the food area in the LA25 test stores has really resonated with guests. Grocery sales in these stores are trending 2 to 3 percentage points higher than the comparison stores
    • Relative performance in produce is even stronger, driving perishable comps that are more than 5 percentage points higher than the comparison stores
  • We have got to be rebalancing our messaging..we have got to make sure we continue to elevate our messaging, our communication around style and those core household essential categories, which include food

John Mulligan

  • We have self checkout in just over 1,000 of our stores. We are planning to add it to another 200 stores by the end of the year and we will continue the rollout in 2017.
    • In stores with self checkout, nearly a third of transactions go through these lanes, much higher than our initial projections.
  • At the end of 2015, more than 460 stores were shipping items directly to guest homes and we are planning to double our capacity this year by expanding this capability to more than 500 additional stores.

Cathy Smith

  • Digital sales grew 16% in the second quarter
  • Comp transactions declined 2.2% partially offset by a 1.1% increase in average ticket
  • Q3 – we are planning for a comparable sales range of a minus 2% to flat

Read full transcript via Seeking Alpha


Lowe’s Q2 Earnings Call Highlights

Robert Niblock

  • Q2: comparable sales grew 2%, driven primarily by a 1.7% increase in average ticket
  • Strong performance in lumber building materials, kitchens, tools and hardware and fashion fixtures
  • Positive comps in 10 of 13 product categories
  • U.S. achieved 1.9% comps for the quarter, with all regions of the south and the west comping positive
  • Northern regions were challenged by an abbreviated spring, which hindered outdoor activity
  • Double-digit comps in Canada and Mexico in local currency
  • Three categories that were down in Q2: outdoor power equipment, millwork and paint
  • Pro is now approximately 30% of our total volume
  • On appliances versus the industry – we actually believe we gained share in the second quarter
  • The West was our best-performing area…North was our weakest…There was almost 500 basis point spread in comps between those two divisions

Michael Jones

  • Achieved positive comps in 10 of 14 regions
  • Our interior and exterior project specialists are now the critical element of our omni-channel strategy
  • Our exterior project specialists are currently available across all U.S. home improvement stores – we’re expanding our interior project specialist program, reaching all U.S. stores by the end of this year.
  • We currently have over 200 pro outside sales representatives in the field
  • Q2 – we drove 27 million impressions on social media alone, and that’s on top of 32 million impressions in Q1
  • We launched our new site…as anticipated, following the launch, we had a brief period of disruption

Bob Hull

  • Comps were negative 2.8% in May, positive 5% in June and positive 3.8% in July
  • There was almost a 400 basis point gap in pro comp relative to the DIY comp

Richard Maltsbarger

  • – double-digit comp performance on the platform at 14%

Read full transcript via Seeking Alpha