Target’s Q1 results show signs of improvement
MINNEAPOLIS — Despite the massive data breach that hurt Target’s fourth quarter, people are not staying away from the retailer. According to a Reuters report, the company saw a dramatic improvement in traffic in the first quarter compared with its late fourth-quarter trends.
The company’s first-quarter financial performance in its U.S. and Canadian segments was in line with expectations, and according to interim president and CEO John Mulligan, reflects not only its continued recovery from the data breach but also early signs of improvement in its Canadian operations.
“While we are pleased with this momentum, we need to move more quickly,” said Mulligan, who is also the company’s CFO and is temporarily filling in as chief executive while the company seeks a replacement for the ousted Gregg Steinhafel. “As a result, we have made changes to our management team and are investing additional resources to drive U.S. traffic and sales, improve our Canadian operations and advance our ongoing digital transformation. We have updated our 2014 earnings expectations to reflect the impact of these investments and believe that they position Target for accelerated profitable growth as a leading omnichannel retailer.”
U.S. sales for the quarter increased 0.2% to $16.7 billion from $16.6 billion last year, reflecting the contribution from new stores partially offset by a 0.3% decrease in comparable sales. First quarter gross margin rate was 29.5% compared with 30.7% in 2013, driven primarily by additional promotional markdowns this year.
The company’s Canadian segment generated sales of $393 million, compared with $86 million in first quarter 2013 when Target opened its first 24 Canadian stores. The first quarter 2014 gross margin rate of 18.7% reflects the continued impact of efforts to clear excess inventory, including long lead-time receipts. This compares to first quarter 2013 gross margin rate of 38.4%, which benefitted from a lack of clearance markdowns due to the short time stores had been open.
Heading Canadian operations now is company veteran Mark Schindele. He replaces Tony Fisher, whom the company terminated this week.
Target incurred $18 million of net expense in first quarter 2014 thanks to the data breach — during which an intruder gained unauthorized access to its network and stole payment card and other customer information — reflecting $26 million of total expenses partially offset by the recognition of an $8 million insurance receivable.
The expense does not include any accrual for the potential claims by the payment card networks for counterfeit fraud losses, the company said, adding that the amount accrued to date for probable losses on potential payment card network claims consists solely of operating expense reimbursement obligations. Target also added that at this time, it is unable to reasonably estimate a range of possible losses on the payment card networks’ potential claims in excess of the amount accrued.
McLane to open new distribution center in Northwest Ohio
FINDLAY, Ohio — JobsOhio on Tuesday announced McLane Co. expects to break ground on a new $119 million distribution facility here this summer.
“McLane Co.’s decision to invest in Findlay is great news for Northwest Ohio and the more than 425 highly-skilled workers that will be on the job at this cutting-edge facility,” stated John Minor, JobsOhio president and chief investment officer.
McLane’s grocery unit services more than 45,000 retail locations nationwide. The company expects this highly automated distribution center to greatly enhance its efficiency in servicing its customers throughout the Great Lakes region. “We’re thrilled that Findlay, Ohio, will be home to our 22nd grocery distribution center within our nationwide network,” stated Mike Youngblood, president of McLane Grocery. “The invaluable assistance of state and local officials was one of the primary reasons in selecting Ohio as our new home. Their focus on promoting a business-friendly environment was a critical part of our selection process.”
“This new project is another example of how Northwest Ohio is one of the top locations in the world for transportation, logistics and distribution,” said Gary Thompson, director of the JobsOhio Northwest Region. “More and more businesses are discovering that this region offers the most efficient and cost-effective means to transport products to customers.”
Takeda’s Entyvio approved to treat moderately to severely active ulcerative colitis and Crohn’s disease
DEERFIELD, Ill. — Takeda Pharmaceutical on Tuesday announced that the Food and Drug Administration simultaneously approved a new biologic therapy, Entyvio (vedolizumab), for the treatment of adults with moderately to severely active ulcerative colitis and Crohn’s disease.
"Patients with moderately to severely active ulcerative colitis or Crohn’s disease, and the healthcare professionals who care for them, need additional new treatment options," said Douglas Cole, president of Takeda Pharmaceuticals U.S.A. "Entyvio reflects an expansion of Takeda’s commitment to supporting patients with gastrointestinal disorders."
"Entyvio is a new option that works to block important contributors to the chronic inflammation that is a hallmark of ulcerative colitis and Crohn’s disease," stated Stephen Hanauer, medical director at the Digestive Health Center at Northwestern University Feinberg School of Medicine. "The clinical trial program evaluated the efficacy and safety profile of Entyvio and demonstrated that Entyvio has the potential to help adult patients with moderately to severely active UC or CD successfully manage their disease."
Entyvio is approved for inducing and maintaining clinical response and remission, improving endoscopic appearance of the mucosa and achieving corticosteroid-free remission in adult patients with moderately to severely active UC who have 1) had an inadequate response with, lost response to or were intolerant to a tumor necrosis factor blocker or immunomodulator or 2) had an inadequate response with, were intolerant to or demonstrated dependence on corticosteroids.
Entyvio also is approved for achieving clinical response and remission, and achieving corticosteroid-free remission in adult patients with moderately to severely active CD who 1) have had an inadequate response with, lost response to, or were intolerant to a TNF blocker or immunomodulator or 2) had an inadequate response with, were intolerant to or demonstrated dependence on corticosteroids.
The Entyvio dose regimen is 300 mg infused intravenously over approximately 30 minutes at zero, two and six weeks, then every eight weeks thereafter.