Alco Q3 net loss grows on one-time charges; three new stores planned
Copperell, Texas – Alco Stores reported a growing net loss during the third quarter of fiscal 2014 compared to the same period in the prior year. Net loss totaled $16.4 million, compared to $1.4 million.
Results in the third quarter of fiscal 2014 included a non-cash charge of $9.8 million related to a valuation allowance on the company’s cumulative deferred tax asset, and $1.1 million of non-recurring expenses attributable to merger activity.
Net sales from continuing operations, excluding fuel, increased 1% to $105.4 million during the third quarter of fiscal 2014, compared to $104.3 million in the third quarter of fiscal 2013. Same-store sales, excluding fuel, decreased 2.9% to $101.1 million during the third quarter of fiscal 2014.
Alco intends to execute five major initiatives to improve profitability and deliver shareholder value:
- Maximizing the benefit of headquarters relocation to the Dallas area, which is enabling Alco to recruit experienced managers, buyers and marketers from top retail organizations.
- Expanding gross margins by completing a price optimization initiative with Revionics, which increases top-line sales and gross margin by adjusting prices store-by-store and item-by-item based on detailed demand data.
- Improving the real estate portfolio by closing unprofitable stores and opening more productive ones. By the end of fiscal 2014, Alco will have closed a total of 18 underperforming stores and opened three high-performing locations in regions with growing energy-based economies.
- Upgrading IT with a new ERP system and a new supply chain service provider.
- Reducing inventory and associated debt levels by, in addition to the store rationalization and IT upgrades, making a number of targeted changes in store layout and merchandise mix.
"Operating results in the third quarter were impacted by several significant one-time events, as we dealt with a proposed merger and also took steps to fix long-term problems that have hurt Alco’s profitability,” said Richard Wilson, president and CEO. “We recorded approximately $1.1 million in merger-related costs. We experienced a net reduction in gross margin dollars of approximately $5 million, primarily due to increased promotional activity in an attempt to reduce inventory and debt levels. In addition, Alco has closed eight underperforming stores in the first three quarters of fiscal 2014 and decided in October to close 10 more locations by year-end. Store-closing costs in the quarter were approximately $934,000. Finally, we recognized a large non-cash charge relating to the accounting for deferred tax assets on the company’s balance sheet."
Survey: 80% of retailers to end standard shipping deadlines before Dec. 20
Washington, D.C. — Over 80% (84.2%) of retailers say their standard shipping deadline for guaranteed Christmas delivery will expire prior to Friday, Dec. 20, according to Shop.org’s eHoliday survey conducted by Prosper Insights & Analytics. Free standard shipping offers will follow suit, as nearly three-quarters (74.2%) of retailers who already have or will offer a free standard shipping promotion say their promotion will expire on or before Dec. 20. (Shop.org is a division of the National Retail Federation.)
“With Christmas falling on a Wednesday this year, we expect to see numerous offers from retailers for expedited and express shipping as we head into the final stretch and potentially biggest weekend of the year,” said Shop.org executive director Vicki Cantrell. “Companies know how important shipping offers are to their customers, many of whom will keep an eye out in the coming days as their favorite retailers are likely to up the shipping ante.”
For those waiting until the last minute, one-third (33.3%) of companies that will offer a free or upgraded expedited shipping promotion say their customers will have until Saturday, Dec. 21 to take advantage of the offer. Nearly two-in-five (19.4%) retailers will let their customers take advantage of that offer through Sunday, Dec. 22, and 16.7% will go as late as Monday, Dec. 23.
CVS sees growth via personalization, pharmacy, new MinuteClinics
Woonsocket, R.I. – CVS is basing its enterprise growth strategy on succeeding in the evolving pharmacy benefit management marketplace, capitalizing on the specialty pharmacy opportunity, driving retail growth through personalization, unlocking adherence through pharmacy excellence and expanding MinuteClinics.
"Looking to the future, our enterprise growth strategy will continue to capitalize on our unique competitive advantages," said Larry J. Merlo, president and CEO of CVS. "We’re focused on winning new lives, whether or not we are the PBM, and on capturing greater share of pharmacy spend across all channels. We will continue to drive operational efficiencies and excellence in execution along with continuous innovation to better meet the changing needs of our customers. With the building blocks of our enterprise strategy in place, we have a strong outlook for 2014 and beyond."