OPERATIONS

CVS to shorten length of customer receipts

BY Dan Berthiaume

Woonsocket, R.I. — CVS Caremark plans to shorten the length of in-store receipts members of its ExtraCare loyalty program receive by about 25%. In a recent Facebook posting, CVS announced that in response to customer complaints it had found a way to shorten the length of receipts without reducing the amount of ExtraCare rewards and savings offered on them.

In addition, next year CVS will allow ExtraCare members to receive all rewards and savings directly to their card. Currently only select offers can be stored paperlessly on ExtraCare cards.

According to various reports, CVS’ effort to shorten its receipts comes in response to a viral phenomenon of people posting photos of themselves holding ExtraCare Receipts that are several feet long, along with sarcastic comments, on social media networks such as Twitter. In its Facebook posting CVS made indirect reference to these photos.

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FINANCE

Wet Seal swings to profit in second quarter; to add in-store plus collection

BY Dan Berthiaume

Foothill Ranch, Calif. — The Wet Seal Inc. swung to a profit in the second quarter, reporting net income of $1 million, compared to a net loss of $12.4 million a year earlier. The retailer also announced it is introducing its Wet Seal Plus Collection, previously available only online, to 36 stores, on Aug. 30.

In addition, net sales totaled $137.2 million, up about 1% from $135.3 million in the second quarter of 2012. Same store sales grew 3.7%, while e-commerce sales remained flat. Overall results were in line with Zack’s consensus estimates.

“During the second quarter we achieved strong year-over-year improvement across all of our key financial metrics,” said John D. Goodman, CEO of Wet Seal. “We delivered comparable store sales growth of 3.7%, expanded our merchandise margin, reduced expenses and attained profitability. Our performance reflects the benefits of our fast fashion operating model, ongoing progress against our turnaround strategies and strong inventory management."

During the quarter, the company opened one and closed one Wet Seal store, resulting in a total count of 525 stores in 47 states and in Puerto Rico as of Aug 3.

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FINANCE

Zales returns to full-year profitability

BY Dan Berthiaume

Dallas — Zale Corp. narrowed its net loss in the fourth quarter to $8 million, from $19.7 million a year ago. Despite the loss, the retailer reported its first profitable fiscal year since the financial crisis in 2008.

“We are pleased to report another solid quarter with a 5.6 percent comp and significant improvement to margins,” said Zales CEO Theo Killion.” Importantly, for the year we achieved a significant milestone by delivering our highest net income in six years. “We intend to build on this momentum as we focus on driving profitable top-line growth and long-term shareholder value.”

Revenue for the quarter ended July 31, rose 2.5% to $417.1 million. Same-store sales increased 5.6%, including an 8.1% increase at its namesake division. Both the quarterly net loss and revenue gain beat Wall Street expectations

For the full year, revenues were $1.89 billion compared to $1.87 billion in fiscal year 2012. Same-store store sales increased 3.3%. Net earnings were $10 million, compared to a net loss of $27 million, in fiscal year 2012.

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