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ABC elects former Campbell Soup chief to board

BY Michael Johnsen

VALLEY FORGE, Pa. — AmerisourceBergen on Wednesday announced the election of former Campbell Soup president and CEO Douglas Conant to its board, effective immediately. Conant’s election increases the number of AmerisourceBergen directors from nine to 10.

“Doug’s extensive business experience, exceptional leadership capabilities and proven track record for growing brands and businesses make him an excellent addition to our board,” stated Richard Gozon, AmerisourceBergen chairman.

Conant is CEO of ConantLeadership, a firm dedicated to helping improve the quality of leadership in the 21st century. 

From 2001 through 2011, Conant helped lead Campbell Soup Company through a business transformation that generated sales growth, 10 consecutive years of adjusted earnings per share growth, strong cash flow and a high return on invested capital. 

Prior to joining Campbell Soup, Conant served from 1992 to 2000 at Nabisco in a series of senior leadership positions, including president of Nabisco Foods from 1995 to 2000. Conant also worked at General Mills and Kraft earlier in his career.

Conant received his Bachelor of Arts degree from Northwestern University and his Masters of Business Administration from the J.L. Kellogg School of Management at Northwestern.

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Target sees soft Christmas sales

BY Mike Troy

NEW YORK — Weaker than expected December sales at Target will cause fourth quarter profits to come in at the low end of an earlier forecast, the company said.

Sales at Target for the five week period ended December 31, increased 0.8% to $10.2 billion while same store sales were essentially flat, below the company’s guidance which called for an increase in the low single digits. The performance was driven by a low single digit decrease in comparable store transactions, offset by an increase in average transaction size.

"December sales were slightly below our expectations, as strong results late in the month did not completely offset softness in the first three weeks," said Target chairman, president and CEO Gregg Steinhafel. "Similar to November, profitability for December benefited from our continued focus on achieving an appropriate balance between price investments and driving sales, combined with thoughtful inventory management. As a result, we expect Target’s fourth quarter 2012 earnings per share will meet or somewhat exceed the low end of our prior guidance."

Target previously indicated it expects adjusted earnings per share in the fourth quarter to range from $1.64 to $1.74, or $1.45 to $1.55 if expenses related to the company’s 2013 entry into Canada are included.

December’s showing was against a relatively modest prior year increase of 1.6% and marked the second consecutive month that Target has missed its same store sale forecast. In November, the company reported a 1% decline in same store sales that was well below a forecast for a low single digit gain. At that time, Steinhafel assured investors that December comps would be in the low single digits and the company had the right plans in place to deliver seasonal results.

A key aspect of December’s weakness appeared to be weak sell through of the Target/Neiman Marcus Holiday Collection. The unique assortment of exclusive and pricy merchandise did not appear to resonate with customers, judging from 70% markdowns evident at some location where inventory levels remain disturbingly high.

Looking ahead to January, Steinhafel said he expect a low single digit same store sales increase for the comparable four week period. Speaking more broadly about 2013, he noted, "we will continue to focus on profitably growing Target’s market share by combining unique merchandise, convenience, value and an unbeatable guest experience across our stores, online and mobile channels."

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Fred’s posts slight December decline; looks forward to strong 2013 with expansion in pharmacy, specialty drugs

BY Michael Johnsen

MEMPHIS, Tenn. — Fred’s on Thursday reported a 1% sales decline to $209.9 million for the five-week fiscal month ended Dec. 29. Comparable store sales for the month decreased 4.2% compared with a decline of 0.4% in the same period last year.

"December sales did not meet our expectations as customers limited their purchases of discretionary and weather-related merchandise again this month," stated Bruce Efird, CEO Fred’s. "The economic headwinds around the holidays overshadowed some of the positive aspects of the company’s performance in December, like the successful completion of our layaway sales program and continued script improvement in our pharmacy department." 

Efird said that, with the sales shortfall Fred’s experienced in November and December, the company now expects fourth quarter earnings per share to be in the range of $0.25 to $0.31.

"Looking ahead, we begin 2013 with many new programs and initiatives designed to improve customer traffic," Efird said. "We will accelerate pharmacy growth through expanded programs in specialty drugs and clinical services, as well as by increasing the pace of pharmacy acquisitions," he said. "We expect that 2013 will be a springboard year for Fred’s with the expansion of specialty drugs and clinical services, accelerated pharmacy acquisitions, new auto and hardware product initiatives, the rollout of a smaller drug and dollar store concept, and the beginning of the relocation of approximately 125 stores." 

In general merchandise departments, Fred’s is expecting a positive impact from discount tobacco programs and its new Hometown Auto and Hardware program, which will grow from 80 to 200 stores in 2013. Fred’s also is expanding its merchandise assortment across seasonal, which is designed to complement the new hardware program.

During the month, Fred’s opened four new stores and one Xpress pharmacy and closed two Xpress pharmacy locations.

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