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Study: Holiday gift card sales increase

BY Dan Berthiaume

PORTLAND, Ore. — Fifty-seven percent of consumers purchased digital gift cards in December 2013, and 43% purchased physical cards. Data from prepaid product and transaction services company InComm also shows that 80% of consumers purchased digital cards in the six days leading up to Christmas, and 20% of consumers purchased physical cards in the six days leading up to Christmas.

Sales of physical cards peaked on Dec. 17, with sales decreasing every day after that, while sales of digital cards began a marked upward trend beginning on Dec. 17, with sales increasing after that and peaking on Dec. 24.

In addition, Shopkick leverages the InComm Digital Solutions platform to instantly connect Shopkick users with their digital gift card of choice to be scanned at the retailer’s point of sale. During Black Friday alone, Shopkick employed the InComm platform to deliver nearly seven times its usual daily volume of digital gift cards.

"We’re thrilled to be Shopkick’s partner and to have helped them successfully address such high demands on Black Friday," said Mike Fletcher, senior VP of sales and marketing for InComm Digital Solutions. "In a recent consumer survey conducted by InComm, nearly 70% of consumers stated they are more interested in purchasing digital gift cards now than they were two to three years ago. Further, our own internal holiday data reveals the increased sales opportunities created by offering digital in addition to physical cards. These numbers demonstrate how brands benefit when they open up gift card sales through all channels."

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McKesson Q3 revenues up 10% to $34.3 billion

BY Michael Johnsen

SAN FRANCISCO — Days following the acquisition of a majority stake in Celesio, McKesson Corp. on Thursday reported that revenues for the third quarter ended Dec. 31 totaled $34.3 billion, up 10% compared with a year ago.  

Third-quarter adjusted earnings per diluted share from continuing operations was $1.45 compared to $1.44 a year ago.  

“We are extremely pleased by the third-quarter performance of our Distribution Solutions segment where adjusted operating profit grew by 37% and our full-year view of the performance in Distribution Solutions is better than our previous expectations,” John Hammergren, chairman and CEO, said. “This operating strength is offset by an increase in our tax reserves due to a dispute with the Canadian tax authorities and a charge in our Technology Solutions segment as we continue to align our Horizon Clinicals software platform development efforts and size the organization appropriately given regulatory delays. As a result, we are updating our previous outlook and now expect Adjusted Earnings per diluted share of $8.05 to $8.20 for the fiscal year ending March 31, 2014.”

Distribution Solutions revenues were up 10% in the third quarter, driven mainly by strong growth in U.S. pharmaceutical direct distribution and services revenues due to market growth and the wholesaler’s mix of business. This area represents a significant growth driver for the wholesaler following its deals to acquire a majority stake in Celesio. "The combination of McKesson and Celesio is expected to have revenues in excess of $150 billion, approximately 81,000 employees worldwide and operations in more than 20 countries," Hammergren told analysts Thursday evening. "We will deliver to approximately 120,000 pharmacy and hospital locations on a daily basis in the U.S., Canada, Europe and Brazil, including more than 11,000 pharmacies that are either owned or part of a strategic banner or franchise network of community pharmacies."

Canadian revenues, on a constant currency basis, increased 12% for the third quarter primarily due to market growth and new customer wins. Including an unfavorable currency impact of 6%, Canadian revenues increased 6% for the third quarter. 

Medical-Surgical distribution and services revenues were up 67% for the third quarter driven primarily by the acquisition of PSS World Medical and market growth. 

Technology Solutions revenues were up 6% in the third quarter compared to the prior year driven primarily by acquisitions completed in the prior year.

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Sluggish sales at Walmart, profit outlook lowered

BY Mike Troy

BENTONVILLE, Ark. — Bad weather and a reduction in food stamps led to weaker-than-expected sales at Walmart and Sam’s Club, which — combined with greater than expected international expense — prompted an uncharacteristic preannouncement from the company that fourth quarter profits would be worse than expected.

Walmart said its earnings per share adjusted to exclude several non-recurring and greater than expected expenses related to international operations would be below the low end of a previously provided forecast of $1.60 to $1.70 and full year earnings per share would be below earlier guidance in the range of $5.11 to $5.21.

The earnings miss for the quarterly period ended January 31 was attributed to a number of factors. In the U.S., same store sales at Walmart stores and Sam’s Club’ are both expected to be slightly negative, according to Walmart CFO Charles Holley, compared to earlier guidance which called for comps at Walmart to be roughly flat and comps at Sam’s in the range of flat to up 2%.

“Despite a holiday season that delivered positive comps, two factors contributed to lower comp sales performance for the 14 week period for Walmart U.S.,” Holley said. “First, the sales impact from the reduction in SNAP (the U.S. government Supplemental Nutrition Assistance Program) benefits that went into effect November 1 is greater than we expected. And, second, eight named winter storms resulted in store closures that impacted traffic throughout the quarter. Sam’s Club was also impacted by the weather throughout the quarter.”

The preannouncement by Walmart is unfamiliar territory for a company accustomed to meeting or exceeding its forecasts. It also marks an inauspicious beginning to a new leadership era at the world’s largest retailer. Walmart International president and CEO Doug McMillon assumes the role of president and CEO of Wal-Mart Stores, Inc., on February 1 when current president and CEO Mike Duke steps down.

Walmart is scheduled to report fourth quarter results on February 20.
 

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