FINANCE

First Data: March growth remains positive, but Easter shift takes toll

BY Dan Berthiaume

Atlanta — Dollar year-over-year volume growth during the month of March 2014 remained positive at 2.1%, but slipped from February’s growth of 2.4%, according to the First Data Corp. SpendTrend report. The report, which analyzes same-store point-of-sale data by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks from nearly four million U.S. merchant locations, found that the yearly comparison was negatively impacted by the later Easter (April 20 this year, compared to March 31 the prior year), which shifted holiday-related spending into April.

The cold weather that plagued much of the country started to loosen its frigid grip at the end of the month and helped to support foot traffic. Higher year-over-year tax refund values improved consumer confidence and job market gains also supported the growth.

Retail spending growth and transaction growth of -0.9% and -1.8% were lower than February’s growth of -0.3% and -0.4% as the Easter shift pushed holiday retail purchases and related foot-traffic into April, which also made for tough year-over-year comparisons.

General merchandise stores saw spending growth fall into negative territory for the first time since November 2013 at -1.3%, as First Data analysis indicates these retailers were clearly impacted by the later Easter timing. However, spending growth at non-store retailers and building material & supply dealers of 4.1% and 4.3% remained healthy and inched up from the prior month’s growth of 2.6% and 3.6% which helped to offset the slowdown. Building material & supply dealers spending growth gained momentum across much of the country at the end of the month as warmer weather spurred sales of home and garden supplies.

Average ticket growth was 0.2%, in-line with February’s growth. Despite rising food prices tied to California’s drought, food & beverage average ticket growth of -0.4% fell from February’s growth of 1% as weather started to normalize and shoppers pulled back on stocking up with necessities.

Looking at different types of payment, credit collar volume grew 2.9% year-over-year in March, while signature debit volume rose 3.4%, PIN debit increased 1.1%, check volume shrank 4.9% and prepaid volume slipped 5.6%.

“Despite the Easter shift to April this year, which negatively impacted year-over-year growth comparisons, spending growth in March remained healthy and positive,” said Krish Mantripragada, senior VP, information and analytics solutions, First Data. “Gains in consumer confidence and the labor market indicate that economic prospects are brightening. We also saw credit spending growth decelerate slightly compared to prior months as higher year-over-year tax refund values deposited into bank accounts spurred debit usage over credit, and the later Easter pushed holiday-related discretionary spending out of March and into April.”

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FINANCE

Destination Maternity sales slip in Q2

BY Dan Berthiaume

Philadelphia – Destination Maternity Corp. reported declining net and same-store sales for the second quarter of fiscal 2014, compared to the same period a year earlier. Net sales decreased 6.5% to $126.1 million from $134.9 million, while same-store sales dropped 5.1%.

Destination Maternity said the decline in net sales resulted primarily from the decrease in comparable sales and decreased sales related to the company’s continued efforts to close underperforming stores.

“Our sales for the second quarter of fiscal 2014 were considerably weaker than planned,” said Ed Krell, CEO. “We believe the primary driver of this sales weakness was the adverse weather conditions across much of the U.S. during the quarter, which included significantly colder than normal temperatures and much more inclement weather than normal, with numerous periods of snow and icy conditions which suppressed store traffic for us and many retailers in many regions of the U.S. We believe that our weaker than planned sales results also reflect the continued challenging overall economic environment, which has affected many retailers in recent months.”

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FINANCE

EBay, Icahn end dispute

BY Dan Berthiaume

San Jose, Calif. – EBay Inc. has reached an agreement with investor Carl Icahn, ending the proxy contest before the company’s upcoming annual meeting of stockholders. Icahn is withdrawing both his proposal to separate the company’s PayPal business and his two nominees to the company’s board of directors.

The company said it has agreed to Icahn’s suggestion to appoint business executive David Dorman as an independent director to its board of directors. This will expand the number of independent directors to 10 on the 12-member board. The other two directors are eBay founder and chairman Pierre Omidyar, the company’s largest shareholder, and company president and CEO John Donahoe.

Dorman, 60, is a founding partner of Centerview Capital Technology and currently chairman of the board of CVS Caremark Corporation. Dorman was a board member of Motorola Inc. beginning in 2006 and served as chairman of the board from 2008 until 2012. After the separation of Motorola Mobility and Motorola Solutions, Dorman became lead independent director of Motorola Solutions. He also serves on the boards of Yum Brands Inc.

Icahn has signed a confidentiality agreement covering any non-public information that directors and certain officers of the company may share with him. In addition, the company agreed not to adopt a policy precluding such persons from speaking to Icahn, and that it would advise them that they may speak to Icahn if they are willing to do so.

“We are very pleased to have reached this agreement with Carl, settling proxy issues and enabling our board and management team to focus our full attention on a goal every shareholder agrees on – growing PayPal and eBay, and delivering sustainable shareholder value,” said Donahoe.

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