Earnings News Nuggets
Issaquah, Wash., Costco profits for the third-quarter rose 6% to $209.8 million, or 43? per share, from $198.7 million, or 42? a share, in the year-ago period. Sales, which include membership fees for the wholesale club, totaled $12 billion, up from $10.9 billion a year earlier. Comp-store sales increased 7% for the three months May 8.
• Fred’s Inc. posted a 7% decline in profits for the first quarter, to $6.7 million, or 17? per share, compared with $7.2 million, or 18? a share, in the year-ago period. Net sales for the discount retailer were $382.7 million, a 12% increase over $341.5 million a year earlier. Comps rose 3% for the quarter.
• Dollar General Corp. said that first-quarter profits fell to $64.9 million, or 20? a share, compared with $67.8 million, or 20? per share, a year earlier. As reported earlier this month, sales for the quarter ended April 29 rose 13.2% to $1.98 billion, and comp-store sales rose 4.9%. Discount retailers have been hit especially hard by rising gas prices that leave low-income shoppers with less disposable income.
Retailers Expect 22% Rise in On-Line Sales
Chicago, U.S. on-line retailers expect sales to rise 22% to $172.4 billion in 2005, with the biggest gains likely coming from cosmetics, perfume and other sectors aimed at women, according to a survey released this week. The annual report by Forrester Research and Shop.org, the on-line retailing arm of the National Retail Federation trade group, reflects survey data from 136 retailers. Excluding sales of travel services, the report found that on-line sales were up 23.8% to $89 billion, which comprises 4.6% of total U.S. retail sales. Total on-line sales rose 23.8% to $141.4 billion in 2004. In addition, on-line retailers reported operating margins of 28%, an improvement over 2003’s 21%, the survey revealed.
“Though initially adopted by men as a shopping tool, women are flocking to the Internet in droves to comparison shop, research and buy,” said Scott Silverman, executive director of Shop.org. Looking ahead, survey respondents said on average they expect increases of 33% for cosmetics and perfume, 32% for over-the-counter medications and personal care, and 31% for jewelry and luxury goods.
Bi-Lo/Bruno’s Appoints Senior VP Finance/Treasury
Mauldin, S.C., Bi-Lo/Bruno’s has named Ken Jones as senior VP of finance and treasury. Jones previously served as VP and treasurer for Denny’s Corp., where he directed corporate financial planning and investor relations, as well as the restaurant group’s centralized treasury organization.
Bi-Lo previously announced that Southern Family Markets Acquisition LLC, an affiliate of C&S, would purchase 104 Bi-Lo and Bruno’s stores over the next 11 months. In addition, Bi-Lo will seek to sell an additional nine stores and close three stores.