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Costco February sales beat analyst estimates

BY Alaric DeArment

ISSAQUAH, Wash. — Costco Wholesale Corp.’s sales increased 8% to $7.58 billion in February, the club retailer said Thursday.

For the 26-week period that ended Sunday, the chain reported sales of $51.35 billion, a 9% increase over February 2012. Comps for the company’s U.S. stores increased 6% during the month and also during the past 26-week period.

For the second quarter and first half of fiscal year 2013, the company reported that sales increased by 8%, to $24.34 billion and by 9%, to $47.55 billion, respectively. Comps during those two periods increased by 5% and 6%, respectively.

"Amidst all of the hand-wringing about a challenged consumer in February, Costco delivered a strong, above-consensus 6% comp gain, which we believe is the product of both terrific product quality and unquestioned value," Guggenheim Partners analyst John Heinbockel wrote in a note to investors, adding that Guggenheim remained concerned with Wall Street estimates of the company’s earnings per share in the second half of 2013 might be too high due to price investments in the United States, Canada and new club expansion costs in Asia. In addition, Heinbockel wrote, Costco’s 85 Canadian stores could face intensified competition as Target expands its reach in the country.

Fresh food and soft lines were the leading product categories, with same-store sales in the high single digits, while U.S. regions with the strongest results were Texas, the Southeast, the Northeast and the Midwest.


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SoloHealth reaches 2,000 health and wellness kiosks in operation

BY Michael Johnsen

ATLANTA — SoloHealth has more than doubled the number of retail locations featuring a SoloHealth Station digital health and wellness kiosk to more than 2,000 locations over the past three months, the healthcare technology company announced Wednesday. SoloHealth plans to have more than 3,500 health and wellness kiosks installed by the end of the year. 

“We are thrilled to be expanding our free healthcare access platform, the SoloHealth Station, providing more Americans access to free health and wellness services, tools and information,” stated SoloHealth CEO Bart Foster. “By end of March, we will be within a 10 minute drive time of 48% of the U.S. population," he said. "As we grow, we are exploring many new ways we can leverage our versatile platform to continue to help better our nation’s health and healthcare system, especially as the country prepares for the Affordable Care Act rollout.”

The SoloHealth Stations are being used by more than 2.5 million people each month and they have been running at 98% uptime. To date, more than 9 million consumers have interacted with the kiosk, up from 2.5 million in late August. Additionally, daily consumer usage has increased going from 10,000 per day at the end of August to approximately 85,000.

Approximately 33% of users took more than one test, with blood pressure and BMI being the highest combination, and one-out-of-four users make a repeat visit to the kiosk. Saturdays drive 19% more users than other days, SoloHealth reported. 

The SoloHealth Station is currently in select retailers including Walmart, Sam’s Club, Safeway and Schnuck’s Markets.


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Fred’s reports slight February gains despite economic headwinds

BY Michael Johnsen

MEMPHIS, Tenn. — Fred’s Super Dollar on Thursday reported total sales of $159.2 million for the four weeks ended March 2, up some $200,000 from the corresponding year-ago period. Comparable store sales for the month declined 1.5%. 

"Considering current economic headwinds, including delays encountered with processing tax returns and refunds as well as increased payroll taxes, we were pleased that February sales were within our projected range for the month," stated Bruce Efird, Fred’s CEO. "General merchandise comparable store sales were positive for the second consecutive month, reflecting good momentum in new initiatives such as an expanded offering in auto/hardware and our discount tobacco shop. We also saw a solid start to our new spring layaway program, and while sales under this program are deferred until final payments are made and therefore not included in February, they would have added 60 basis points to the month’s total and comparable store sales," he said. "In the pharmacy department, positive script growth continued, but as in previous months, top-line sales were negatively affected by the ongoing brand-to-generic shift. The effect of this shift on total and comparable store sales was 280 basis points in February."

Because of the combination of fourth quarter promotional markdowns on basic and consumable products, as well as year-end adjustments relating to higher-than-anticipated insurance and other operating costs, Fred’s reduced its financial guidance for the fourth quarter of 2012. Fred’s now expects to report earnings in the range of $0.16 to $0.21 per share for the fourth quarter. 

During February, Fred’s opened one new store and pharmacy location.


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