European Union tax investigation could affect Starbucks, Apple
Brussels, Belgium — The European Union (E.U.) is investigating lucrative tax breaks individual member countries such as Ireland, the Netherlands and Luxembourg have been giving major global companies including Starbucks and Apple. Media reports indicate the E.U. is focusing on whether certain tax loopholes these countries have provided some corporations qualify as “state aid,” which is prohibited under E.U. bylaws.
Countries do not face fines or legal action if any tax breaks are found to be in violation of E.U. rules, but they could be required to rescind the breaks and make the companies in question pay the additional tax.
Apple has avoided paying billions of dollars in taxes by operating a variety of subsidiaries in the E.U., and Starbucks pays a low corporate tax as a result of moving its European headquarters to the U.K. In a statement, Apple said it has not received any special treatment from Irish authorities in how it conducts business and pays taxes there.
Sportsman’s Warehouse swings to Q1 loss
Midvale, Utah — Increased selling, general and administrative expenses were a key factor in Sportsman’s Warehouse Holdings Inc. swinging to a net loss of $3.37 million in the first quarter of fiscal 2014, compared to net profit of $4.46 million in the same period a year earlier. The retailer plans to open eight new stores during the fiscal year, including four in the second quarter.
Net sales dropped 3% to $132.4 million from $136.5 million. Same store sales decreased by 18.1%, primarily as a result of the decline in demand for firearms and ammunition.
For the second quarter of fiscal 2014, net income is expected to be in the range of $3.9 million to $4.2 million, while net sales are expected to be in the range of $154 million to $157 million based on opening four new stores and a decrease in same-store sales from the second quarter of fiscal year 2013 in the range of 7-8%.
For fiscal 2014, net income is expected to be in the range of $18.2 million to $20.3 million, while net sales are expected to be in the range of $665 million to $675 million, based on opening eight new stores for the full year and a decrease in same store sales from fiscal year 2013 in the range of 6% to 8%.
"Our first quarter results, which came in better than our expectations, were impacted by the general slowdown in firearm sales against the surge-driven comparison from last year, a dynamic we expect to continue until the second half of this year,” said John Schaefer, president and CEO of Sportsman’s Warehouse.
City Furniture expands in Florida
Taramac, Fla. — Furniture retailer City Furniture is completing a $17.5 realignment of its South Florida retail network with the opening of a new 34,000-sq.-ft. Ashley Furniture HomeStore in Cutler Bay, Florida. This location is adjacent to a 56,000-sq.-ft. City Furniture showroom that opened in October 2013, creating a 90,000-sq.-ft. superstore.
City Furniture, which is the Southeast and Southwest Florida licensee for Ashley Furniture HomeStore, added or renovated five South Florida stores since 2012 and plans to open three more Ashley Furniture HomeStore locations and another City Furniture showroom in South Florida in the next three years. The company is also researching possible sites for future expansion in the Tampa and Orlando markets, as well as in Miami-Dade County.
“This opening is a significant milestone in our strategic plan,” said City Furniture president Keith Koenig. “We’ve, reconfiguring our company to do a better job meeting customers’ needs. At the same time, we’ve geared our expanded product lines and great values to consumers’ evolving tastes.”