Wed. Tipsheet: Q4 Comp: Target -2.5%, Lowe’s +3.9% | H.Depot Call Highlights | Target Attacks P&G


“Target Q4 Same-Store Sales Down 2.5% in U.S.”  “In fourth quarter 2013, sales decreased 6.6 percent to $20.9 billion from $22.4 billion last year, reflecting the impact of an additional accounting week in 20125 and a 2.5 percent decrease in comparable sales, partially offset by the contribution from new stores.”  Read the release


“Target posts earnings of 81 cents a share vs. 79 cents a share estimate” at CNBC.  “Revenue slipped to $21.52 billion from $22.73 billion a year ago.  Analysts had expected Target to report earnings of 79 cents a share on $21.45 billion in revenue, according to a consensus estimate from Thomson Reuters.”  Read more


“Target attacked P&G over Amazon Pact:  Fewer Endcaps & ‘Category Captains’ “ by Serena Ng at WSJ via Yahoo.  “In addition, Target encouraged some suppliers that compete with P&G to work together on promotions, like offering discounts on combined purchases of their products, another person said.  The moves were aimed at sending a message after senior Target executives learned P&G was working closely with Amazon, people familiar with the matter said.”  Read more


“Target Q4 Earnings Webcast today at 9:30 am central time”  Webcast link


“Lowe’s Q4 Same-Store Sales Up 3.9%; Up 4.8% for Fiscal Year”  “Sales for the fourth quarter increased 5.6 percent to $11.7 billion from $11.0 billion in the fourth quarter of 2012, and comparable sales increased 3.9 percent. For the fiscal year, sales were $53.4 billion, a 5.7 percent increase over fiscal year 2012, and comparable sales increased 4.8 percent.”  Read more


CNBC headline: “Retailer Lowe’s earnings match expectations” “Lowe’s, the No. 2 U.S. home improvement retailer, reported a 6.3 percent rise in quarterly profit, helped by a nearly 4 percent rise in same-store sales.  Shares of Lowe’s were higher in premarket trading following the announcement.”  Read more


“Lowe’s Q4 Earnings Webcast today at 9:00 am ET”  Webcast link


“Publix Opens First Store in North Carolina Today” by Ely Portillo at Charlotte Observer.  “Publix operates almost 1,100 stores, clustered in the Southeast and stretching from Florida to North Carolina. In addition to its planned 14 Charlotte-area stores opening over the next two years, the company is opening supermarkets in Cary, Winston-Salem and Asheville.”  Read more


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“Cramer: Finally! A retailer that can beat Amazon” at CNBC.  “Jim Cramer says he’s finally found a company that can beat Amazon:  Zulily, the online shopping portal that offers daily deals for moms and children. “This is the first company that has said ‘we can beat Amazon,’ and I believe them, I think they can beat Amazon. Why? Because they are a technology company in the women’s apparel business. It’s a revolutionary company.”  See the video / Read more


“Macy’s to offer online ordering for in-store pick-up” by Alexander Coolidge at Cincy Enquirer.  “Chief financial officer Karen Hoguet told analysts on a conference call the program is being expanded after months of tinkering with the concept at 10 stores in Washington, D.C. “Based on the positive results, we’re now rolling this out to all of our stores,” she said.”  Read more


@BrianSozzi: “3 Reasons Target is Failing in Canada” “Sozzi’s sources on the ground in Canada have told him a disturbing series of accounts and continue to send him pictures that paint the business in the most unflattering of ways.” See the video


“Heard on the Home Depot Q4 Earnings Call”

Frank Blake

Canadian business had positive comps above the Company average.

(We’re) very, very pleased with it (Canadian performance). And our Canadian business is doing well in an environment where our competitors, Rona and some others are having great difficulty.

Mexican business positively comped for the quarter making it 41 quarters in a row of positive comp growth.

The Western division was our strongest performing division…about twice the company average.

Appliance market share:  We have picked up about a 180 basis points of share in the quarter and that compares to about a 170 basis points on a rolling 12 which would be over the four quarters.


Craig Menear

Departments that outperformed the company’s average comp for the fourth quarter were indoor garden, kitchens, outdoor garden, plumbing, electrical and tools.

Bath hardware, paint, décor, lighting, flooring, millwork and lumber performed positively.

Comp sales in building materials were negative.

Maintenance and repair categories like pipe and fittings, air circulation, cleaning and HVAC had comps above the company average. We also saw continued strength in light bulbs, where sales posted a double-digit positive comp for the fourth consecutive quarter.

The drivers behind the increase in big ticket purchases were appliances and the continued recovery of our pro customer.

New Product/Brand Callouts:

Brown Jordan (high-end patio furniture), Sunbrella, Weber’s Spirit Series grill, KitchenAid grills, Eagle (cordless power), Delta’s ActivTouch, Polar (toilet seat with LED lights!), Rheem water heaters (for Pros).


Carol Tome

Comp sales for U.S. stores were positive 4.9% for the quarter. With positive comps of 3.7% in November, 7.8% in December and 3.8% in January.

For the year, we expect comp sales growth of approximately 4.6% and total sales growth of approximately 4.8%.

I will also note that the extreme winter weather in February hasn’t been our friend, but our February comps are positive.

As we look at sales against opening price points of good, better, best, all the way to premium, we have seen growth in premium priced products in all four quarters including this last quarter.

Read the Home Depot Q4 Earnings Call Transcript


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