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Safeway misses analyst sales expectations, shares drop

BY Michael Johnsen

PLEASANTON, Calif. — Safeway shares dropped dramatically Thursday morning as the company reported $10 billion in sales for its first quarter 2013 ended March 23, which is essentially flat as compared with the first quarter of 2012. An identical-store sales increase of 1.5% (excluding fuel) was offset primarily by the disposition of Genuardi’s stores in 2012 and lower fuel sales in 2013. 

Analysts had been expecting comparable sales upward of 2%, lifting quarterly sales north of $10.2 billion. Wall Street reacted quickly, Safeway shares were selling down more than 17% to $23.40. However, over the past year Safeway stock is still up more than 10%, including Thursday’s dramatic drop. 

Safeway’s same-store sales were impacted positively by 40 basis points on account of a fiscal calendar shift, Burd said. Safeway’s fiscal year 2012 ended on Dec. 29, 2012 and did not capture all New Year’s holiday sales. Same-store sales are also negatively impacted by 90 basis points due to a shift to generic drugs.

Safeway’s guidance for 2013 remains unchanged at $2.25 to $2.45 earnings per diluted share. But that doesn’t include any sales bumps out of the company’s wellness program, which is expected to launch in the next three months, according to Safeway Chairman and CEO Steve Burd. 

Burd offered analysts a glimpse into that new wellness platform in March. 

So the future looks bright, Burd said in a conference call with analysts. The grocer’s Just 4 U loyalty program is growing at a clip of 20,000 new households per week, which will place the number of total loyalty-card users to more than 6 million by the end of the year. "Just for U usage continues to grow, and our partner fuel reward program is rolling out on schedule and resonating well with consumers," Burd said.

Safeway was able to reduce its debt load with the successful IPO last week of its Blackhawk Network Holdings, shares of which were selling for $24.32 in midday trading, down slightly 2.8%.  

Safeway invested $144.9 million in capital expenditures in the first quarter of 2013. For the year, Safeway expects to invest up to $1.1 billion in capital expenditures.

 

 

 

 

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Galderma, American Academy of Dermatology announce new research fellowship

BY Antoinette Alexander

CHAUMBURG, Ill., and SOPHIA ANTIPOLIS, France — Galderma, whose brands include Cetaphil, and The American Academy of Dermatology have announced the creation of the American Academy of Dermatology Translational Biotechnology Fellowship.

The new fellowship will offer a dermatologist the opportunity to work in drug development and translational medical research at Galderma’s R&D facility located in Sophia Antipolis, France. This learning opportunity will allow the physician to advance science and explore career options within a pharmaceutical industry setting.

Galderma will host two one-year fellowships, one beginning in fall 2013 and one beginning in fall 2014 at Sophia Antipolis, a corporate-funded facility dedicated to skin research.

The fellow will gain knowledge of the specific requirements of drug development and be given opportunities for exploration within the pharmaceutical industry environment. The AAD will provide the selected candidate a stipend to cover his or her costs during the term of the fellowship, and Galderma will host and provide necessary resources to support and mentor the Fellow.

Preference will be given to candidates who are in their last year of residency in an accredited American College of Graduate Medical Education dermatology residency program. Candidates must be a physician member of the Academy who will have satisfactorily completed a residency no more than three years before the planned start date. Candidates must be interested in pursuing research and exploring careers in an industry setting. The AAD will review fellowship applications and recommend one candidate each year the fellowship is offered.

The application for the fall 2013 fellowship is available at www.aad.org/biotechfellowship. Submissions will be accepted through May 31. The 2013 recipient will be notified in July. The application for the fall 2014 fellowship will be available on the website in mid-June 2013. The 2014 recipient will be notified in December 2013.

 

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SinfulColors helps fuel Revlon’s Q1 sales

BY Antoinette Alexander

NEW YORK — Beauty brand Revlon posted a net loss during the first quarter, including charges, as net sales rose 2.1%, excluding the unfavorable impact of foreign currency fluctuations.

“Our strategic goal is to drive profitable growth and, in the first quarter of 2013, we grew net sales by 2.1%. We introduced several successful, consumer-preferred products in the marketplace and we increased support behind our brands. Our SinfulColors acquisition performed very well, and we are on track with the integration of our more recently acquired Pure Ice brand, which is also performing well. Lastly, in the quarter, we improved our capital structure by refinancing our senior notes and amending our bank term loan, reducing interest rates and extending maturities on our debt,” stated Alan T. Ennis, president and CEO.

Net sales in the quarter were $331.9 million, compared with $330.7 million in the year-ago period. The increase was primarily driven by higher net sales of Revlon and SinfulColors color cosmetics and the inclusion of the net sales of Pure Ice, partially offset by lower net sales of Almay color cosmetics and Revlon ColorSilk hair color.

Net loss during the quarter was $6.9 million, or 13 cents per diluted share, compared with net income of $8.5 million, or 16 cents per diluted share, in the year-ago period. Net loss in 2013 included charges of $27.9 million ($16.9 million after tax) related to the 2013 refinancing of the company’s senior notes, the amendment of its bank term loan and the $8.3 million gain on the insurance settlement noted above.

In the United States, net sales were $192.1 million, up 4% compared with the year-ago period, the company stated.
 

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