Wednesday Tipsheet: Lowe’s US +7.4% | Wmart’s New Green Portal | H.Dep Call Highlights
Lowe’s Q4 US Comp +7.4% “Lowe’s today reported net earnings of $450 million for the quarter ended January 30, 2015, a 47.0 percent increase over the same period a year ago…Fiscal year 2015 outlook: Comparable sales are expected to increase 4 to 4.5 percent, the company expects to open 15 to 20 home improvement and hardware stores.” Read the release
Lowe’s Beats Street at CNBC. “The company posted earnings of 46 cents a share on revenue of $12.54 billion.Wall Street expected the home-improvement behemoth to post earnings of 43 cents a share on revenues of $12.31 billion, according to consensus estimate from Thomson Reuters.” Read more
Target to Webcast Q4 Earnings Conference Call Today at 9:30 AM CST Webcast
Target Shrinks the Big Box to Woo City Dwellers at Bloomberg. See in-store video from store near Univ. of MN
Wal-Mart eyes ‘phase three’ of its sustainability plan, critics want more by Kim Souza at The City Wire. “At the retailer’s 2015 Sustainability Milestone Meeting held in San Bruno, Calif on Tuesday, (Doug) McMillon shared a recently shot video clip of former Wal-Mart leaders revisiting the sustainability origins…The majority of meeting time was devoted to brief panel discussions that featured suppliers and other partners. Wal-mart did announce along with the meeting its “Sustainability Leaders” shop. It’s part of the Walmart website that helps customers find and buy products from suppliers “leading in sustainability.” Read more
Wal-Mart launches online shop that features green products, suppliers at AP via Fox Business. “The portal, which features more than 12,000 products in 80 different product categories like toys and printers, comes six years after the world’s largest retailer launched its own index that rates suppliers’ impact on the environment.” Read more
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Macy’s explores new off-price concept – Mum on details by Andy Brownfield at Cincinnati Business Courier. “I’m not going to tell you until we start rolling it out, but the team feels very optimistic that we will do well. Again, this is one of those things we’ll let the customer vote and see what she says.” Read more
Fortune: Macy’s off-price chain to be more like T.J. Maxx than Nordstrom Rack by Phil Wahba. Read more
Former Employee Suing Costco for Religious Discrimination by Kristin Thorne at WABC-TV New York. “The devout Muslim says he was working as a cashier’s assistant at the Costco in Sunset Park Brooklyn in September of 2012 when pork came across the conveyor belt. It’s against his religious beliefs to touch either pork or alcohol. Camara says after telling his managers this, they transferred him outside collecting the shopping carts.” See the video / Read more
Slideshow: Walgreens New Honolulu Flagship Store at Pacific Business News. See the 43 pics
West Coast Port Gridlock Hits Inventory at Home Depot and Macy’s by Hiroku Tibuchi at NY Times. “The West Coast situation has been tough, with 12- to 16-day delays in getting our imports in,” Mark Holifield, Home Depot’s executive vice president for supply chain and product development, said on a call with analysts…Karen M. Hoguet, Macy’s chief financial officer, said that shipment delays were only just starting to hit inventory levels…About 12 percent of the department store chain’s first-quarter merchandise was delayed, Ms. Hoguet said. Read more
Can Walmart Get Us to Buy Sustainable Products? by Andrew Winston at Harvard Business Review Read more
Dick’s Sporting Goods CEO New Mansion at Palm Beach Post Aerial View Pic
The Wal-Mart headline you probably missed by Krystina Gustafson at CNBC. “(Walmart) said it will offer fixed schedules to some of its associates each week, starting next year. It will also allow employees to sign up for open shifts on a first-come, first-serve basis, and continue to give workers their schedules at least two and a half weeks in advance.” Read more
Guest Author: Rebuilding Empires by Thomas Lee (Excerpt 2 of 4). Published by St. Martin’s Press.
In many ways, Cartwheel represents an enormous cultural shift in Target. The product was conceived in just a matter of months by a new unit inside the company that focuses on quickly converting ideas to actual products. In addition, Target designed Cartwheel on the fly, knowing full well that the service was flawed but released to the public anyway with the hope that it could improve the product based on customer feedback.
Normally, whether it was a marketing campaign to promote Taylor Swift’s album or the launch of a design collection from Jason Wu, the retailer would spend years planning every meticulous detail and then launch the project with the full force of a tsunami.
But with Cartwheel, Target wanted to do something completely alien to its culture: make mistakes. The team proposed a low key “Beta launch” for only employees and some customers so the company can collect data and work out any bugs in the system before Cartwheel made its debut in earnest.
“It was a big cultural moment for Target,” said chief marketing officer Jeff Jones. “We’re going to put something in the world that we know is not perfect. We’re going to take guest data and we’re going to improve the product based on what the guest shows us they want through their actions.”
“We are testing, in any given day in Cartwheel, over 100 data experiments,” he continued. “We are continuously learning about how do we make the user experience better, what kind of offers do people want, how do they download the app, when do they use the app, is it pre-trip or in the store.”
“In the startup world, you wouldn’t get criticized for that,” Jones said. “You would be told that’s innovation. But Target, because we’ve always focused on crisp, and flawless execution, we would never have done that in our past. We’re demonstrating a new kind of thinking. Putting a beta product into the world is what happens in Silicon Valley every day. Of course there are things to criticize about it, but we don’t take that as criticism, we take it as user feedback to improve the functionality.”
Home Depot Q4 Earnings Call Highlights:
Craig Menear, President & CEO
All departments had positive comps.
For the year, our online business grew over $1 billion, a growth rate of over 36%.
Almost 40% of our online orders were picked up in the store.
2015: we expect comp growth in the U.S. of approximately 4.5% and total company comp growth of approximately 3.3 to 4.5%.
Ted Decker, EVP Merchandising
Nine departments had comps above the company average for Q4: tools, lumber, millwork, lighting, décor, building materials, kitchen, bath, and hardware.
We saw double digit comps in compressors, siding, roofing, ladders, concrete, fasteners, and several lumber categories…patio doors, windows, interior doors and exterior doors.
In 2014, we reviewed 154 product categories or roughly a third of the store.
Q4 total comp transactions grew by 4.9% and for the year we set a new transaction record with over 1.4 billion total transactions.
Transactions per ticket under $50 (approximately 20% of U.S. sales) were up 3.1% for the fourth quarter.
Transactions per ticket over $900, (also approximately 20% of U.S. sales) were up 10.3% in the fourth quarter.
We track our 40 largest classes, and 16 of those have not recovered from peak.
We’re going to invest in another 170 stores expanding appliances.
Coming soon callouts:
We’re excited about the launch of our new color solution center, featuring Behr, Glidden, and our Home Decorators Collection paint brands…We plan to roll it to all U.S. stores by the end of the second quarter.
…introducing new and exclusive products in Milwaukee, Makita and DeWalt.
Grills: we have a new and exclusive brand launch with Nexgrill and are introducing several exclusive models from Weber and Kitchenaid.
Vigoro’s new colored mulch in red, black and brown offers a 12-month color guarantee at a great value.
Carol Tome, EVP & CFO
Comp sales for U.S. stores: 8.8% in November, 8.6% in December, and 9.3% in January.
For the year, our gross data breach expenses were approximately $63 million, and after expected insurance recovery our net data breach expenses were approximately $33 million.
During the fourth quarter we opened three new stores, two in Mexico and one in Canada.
In 2015, we will open six stores, five in Mexico, one in Canada.
Dot-com contributed 100 basis points to our comp in Q4.
Pro credit card: We do have a pilot underway in a number of stores with extended terms, user terms that you can’t find any place, and our pros are responding very well to that.
Read the Q4 earnings call transcript via Seeking Alpha
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