Stop & Shop ‘shores’ up N.J. acquisition
FAIRFIELD, Conn. — Stop & Shop announced that it has finalized its acquisition of five New Jersey Shore-area Foodtown supermarkets previously owned by Norkus Enterprises.
The transaction involves stores in Freehold Township, Manalapan, Neptune City, Point Pleasant Beach and Long Branch, N.J. Stop & Shop currently operates 10 stores in Monmouth and Ocean counties.
"Stop & Shop is always looking for opportunities and convenient locations to better serve our customers," said Ron Onorato, division president of Stop & Shop’s New York metro division. "We are very excited to have the opportunity to expand our presence in Monmouth and Ocean counties. We look forward to providing our customers in these areas the superior value and quality they have come to expect from Stop & Shop."
Target tops earnings view, but tempers profit outlook
MINNEAPOLIS — First-quarter sales at Target increased 2.8% to $15.6 billion, and same-store sales increased 2%, the company reported.
The modest sales growth translated into earnings per share that advance 9.8% to 99 cents, 4 cents better than analysts’ consensus estimate of 95 cents, and net income that increased 2.7% to $689 million. Share repurchase activity contributed to the earnings-per-share growth as Target spent $819 million during the first quarter to buy back 15.4 million shares at an average price of $53.32.
“Our first-quarter financial performance was the result of stronger-than-expected profitability in our credit card segment, which offset the impact of weaker-than-expected sales in our retail segment,” Target’s chairman, president and CEO Gregg Steinhafel said.
Operating profits for the retail segment declined 4.2% to slightly more than $1 billion during the quarter as the company’s PFresh remodeling efforts and 5% rewards program pressured expenses and caused gross margins to contract to 30.4%, compared with 31.3% in the year-ago period.
Target expects to maintain its breakneck pace of store remodeling activity during the remainder of the year, with 300 additional units slated for remodel before October, adding to the 550 units that have already been converted to the PFresh concept.
In contrast to the performance of the retail business, the credit card segment produced unusually strong operating profits, which grew by 75% to $194 million as bad debt expense was virtually nonexistent at $12 million, compared with $197 million. Following the launch of the 5% rewards program, Target’s RED card products now account for 7.6% of the company’s sales.
Looking forward, Target CFO Doug Scovanner said analysts’ current consensus estimate of $1 for the second quarter seems potentially achievable but above the midpoint of a range of likely outcomes, as is the case with analysts’ full-year estimate of $4.23.
As for comps, Scovanner said, “We remain quite likely to achieve 4% to 5 % same-store sales performance in the fall, and I believe we are quite likely to experience better same-store sales growth in the second quarter than we did in the first quarter.”
Strong food sales help drive up Q1 comps for BJ’s Wholesale Club
WESTBOROUGH, Mass. — BJ’s Wholesale Club reported net income of $33.7 million, or 62 cents per diluted share, for the first quarter ended April 30.
Results for first quarter 2011 exceeded the company’s guidance for net income in the range of $29.5 million to $31.5 million, or 54 cents to 58 cents per diluted share.
BJ’s president and CEO, Laura Sen, said, “BJ’s is off to a great start in 2011. Our stronger-than-expected performance for the first three months of 2011 reflects net sales above plan, continued margin expansion and excellent cost control. I am very proud of our team members in the field, distribution centers and home office for delivering another great quarter.”
Net sales for first quarter 2011 increased by 10% to $2.77 billion, and comparable-club sales increased by 6.3%, including a contribution from gasoline sales of 3.9%. Merchandise comparable-club sales excluding gasoline increased by 2.4%.
Departments with the strongest comparable-club sales increases included bakery, dairy, deli, frozen, health and wellness, meat, milk, prepared foods, produce and small appliances. Weaker departments vs. last year included apparel, books, cigarettes, diapers, prerecorded video and televisions.
For the year ending Jan. 28, 2012, the company now expects to report net income in the range of $147 million to $157 million and earnings per diluted share in the range of $2.68 to $2.88. For the second quarter ending July 30, the company expects to report net income in the range of $40.5 million to $42.5 million and earnings per diluted share in the range of 74 cents to 78 cents.