OPERATIONS

CST Brands names new board member

BY Dan Berthiaume

San Antonio — Stephen Smith, former co-CEO of the Toronto-based restaurant chain owner and operator Cara Operations Limited, has been elected to the CST Brands’ board of directors. Smith’s most recent experience was with Cara as co-CEO and, prior to that, CFO of Cara. Previously, Smith served for many years as an executive of Canadian grocer, Loblaw Companies Limited.

"We are thrilled to add an individual with Stephen’s background to our board,” said Kim Bowers, chairman and CEO of CST Brands. With a significant portion of CST Brands’ operations in Canada, Stephen’s 25 years of experience in consumer service industries in Canada will be invaluable as we continue to grow our presence there."

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News

Kirkland’s stays positive as it heads into first quarter

BY CSA STAFF

Despite continued adverse weather conditions throughout February and into March, Kirkland’s president and CEO Robert Alderson said that early first-quarter sales and margin trends have been positive and encouraging.

Net sales for the fourth quarter ended Feb. 1 decreased 4.2% to $156.1 million compared with $162.9 million for the 14-weeks ended Feb. 2 last year. On a 13-week basis, comparable store sales for the fourth quarter of fiscal 2013, including e-commerce sales, were flat compared with a decrease of 2.6% in the prior-year quarter. Kirkland’s opened eight stores and closed seven during the fourth quarter, bringing the total number of stores to 324 at quarter end.

Full-year net sales increased 2.7% to $460.6 million, compared with $448.4 million for the 53 weeks ended Feb. 2 last year. On a 52-week basis, comparable store sales for fiscal 2013, including e-commerce sales, increased 0.5% compared with a 3% decrease in fiscal 2012. The company opened 24 stores and closed 23 during fiscal 2013.

The company reported net income of $12.3 million, or $0.69 per diluted share, for the quarter, compared with net income of $14.3 million, or $0.82 per diluted share, for the 14 weeks ended Feb. 2, 2013.

For the full year, the company reported net income of $14.5 million, or $0.82 per diluted share, compared with net income of $13.8 million, or $0.77 per diluted share, for the 53 weeks ended Feb. 2, 2013.

“Our results for the fourth quarter were slightly better than our adjusted guidance, and we finished fiscal 2013 in a solid position with over $89 million in cash,” said Alderson. “As we look to fiscal 2014, we remain excited about the investments in store growth, merchandise systems and process improvement, greater e-commerce capabilities and focused branding initiatives that we expect to drive improved traffic, sales and earnings results.”

Looking ahead to the first quarter, the company expects net income to be in the range of $0.09 to $0.12 per diluted share. It anticipates net sales to be in the range of $105 million to $106 million with a comparable-store sales increase in the range of 2% to 3%.

Kirkland plans to open approximately six stores and close approximately seven stores in the first quarter.

The company was founded in 1966 and is a specialty retailer of home décor in the United States. Although originally focused in the Southeast, the company has extended its reach beyond that region and currently operates 321 stores in 35 states.

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FINANCE

Dollar General Q4 disappoints; to open 700 new stores in 2014

BY Marianne Wilson

Goodlettsville, Tenn. — Dollar General on Thursday reported a 1.5% rise in fourth-quarter profits, below analysts’ estimates, as the retailer felt the impact of harsh winter weather, along with increased competition and low consumer confidence. The company also said it plans to open approximately 700 new stores in 2014.

The retailer earned $322.2 million in the quarter ended Jan. 31, compared with $317.4 million a year earlier.

Revenue rose 6.8% to $4.49 billion, which was below the Street’s expectations. Same-store sales increased 1.3%.

“Sales in the fourth quarter were impacted by severe winter weather, including many days with significant store closures, an aggressive competitive retail landscape and our customers` uncertainty about spending in the current economic environment,” Dollar General CEO Rick Dreiling said in a statement.

For the full year, Dollar General earned $1.03 billion, up from $952.7 million the year before. Revenue rose to $17.5 billion from $16.02 billion.

Same-store sales rose 1.3% in 2013. It was Dollar General’s twenty-fourth consecutive year of same-store sales growth.

For 2014, Dollar General has budgeted $450 million to $500 million for capital expenditures, and plans to open 700 new locations. This comes on top of a record year of square footage expansion in 2013.

“Among our other many accomplishments for the year, we successfully opened 650 new stores, ending the year with 11,132 stores serving customers in 40 states,” Dreiling said. “Dollar General is a strong and growing business with high return store growth opportunities that we intend to capture. While we remain cautious on the current operating environment and the many challenges our customer is facing in 2014, we have a business model that generates significant cash flow, putting us in a position to invest in these growth opportunities, while continuing to return cash to shareholders through share repurchases.”

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