Ace Hardware net income soars in Q2
Oak Brook, Ill. – Net income at Ace Hardware Corp. rose 57% to $66.5 million, from $24.2 million. Revenues climbed 13% to $1.33 billion, from $1.17 billion.
The opening of 44 new stores and improved cash discounts and vendor income fueled the strong net income growth. In addition, sales increases were noted in virtually every department with the paint, electrical, and lawn and garden categories showing the largest increases. Ace has remodeled and re-equipped over 3,300 stores as part of the new Paint Studio initiative, which contributed meaningfully to second quarter wholesale revenues and record retail sales in May.
Southern Bullion closure widens DGSE net loss
Dallas – Net loss at specialty jewelry retailer DSGE Inc. roughly tripled to $4.45 million in the second quarter of fiscal 2014 from $1.12 million in the same period a year earlier. Writeoffs related to the closure of DSGE’s Southern Bullion banner drove the net loss increase.
Declining gold prices helped produce a 26% reduction in revenues, which dropped to $17.5 million from $23.8 million. Strong jewelry sales partially offset the drop in gold value. DSGE also added two new independent directors, Bruce Quinnell and Dennis McGill, to its board. Both men are senior retail executives with decades of experience.
Wal-Mart cuts profit forecast on sluggish Q2
Bentonville, Ark. – Wal-Mart Stores Inc. stayed the course in the second quarter, delivering profit within Wall Street expectations, but cut its forecast for the full year as its U.S. business remains lackluster and costs associated with building new smaller-format stores, healthcare and e-commerce improvements continue to rise.
Consolidated net income in the second quarter edged up 0.6% to $4.1 billion from $4.07 billion in the year-ago period. Net sales rose 3% to $119.3 billion from $116.1 billion and U.S. same-store sales without fuel were flat. Traffic in U.S. stores was negative for the seventh consecutive quarter as the world’s largest retailer struggles to turn its domestic business around.
On the international front, Wal-Mart has showed continued strength; every country except China saw positive same-store sales.
CEO Doug McMillon pointed to the international strength, as well as e-commerce and Neighborhood Market sales in the U.S., as bright spots in the quarter. Same-store sales at Wal-Mart’s Neighborhood Market stores increased 5.6% over last year. Wal-Mart opened 22 Neighborhood Market stores in the second quarter and plans to add between 180-200 for the year. "We really like the position of our smaller stores,” CFO Charles Holley said in a media call.
Thursday’s results didn’t surprise Wall Street, which had low expectations leading up to the report. U.S. CEO Bill Simon’s recent departure left investors concerned that efforts to improve store merchandise and operations had not made a meaningful difference on sales and traffic.
Wal-Mart said it now expects earnings for the year of $4.90 to $5.15 a share, down from its previous range of $5.10 to $5.45 a share. U.S. comparable-store sales in the three months ending Oct. 31 should be relatively flat, the company said.