FINANCE

Five Below swings to profit in Q1; 60 stores on tap

BY Katherine Boccaccio

Philadelphia — Five Below Inc. reported Wednesday a profit of $1.6 million, compared with a loss of $1.2 million in the year-ago period.

The discount retailer saw sales during the quarter rise 33% to $95.6 million from $71.8 million, meeting internal expectations but beating Wall Street’s forecasted $93.9 million in revenue. Same-store sales advanced 4.2%.

According to president and CEO Thomas Vellios, Five Below will open another 60 stores by the end of 2013.

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FINANCE

U.S. May retail sales rose more than expected

BY Katherine Boccaccio

Washington, D.C. — A report released Thursday by the Commerce Dept. said that retail sales in the U.S. gained 0.6% in May, more than forecast and likely boosted by increased hiring during the month.

The increase was the largest in three months and followed a 0.1% advance in April. Bloomberg economists called for a 0.4% increase. The figures used to calculate economic growth, which exclude categories such as automobiles, climbed 0.3%.

“The consumer seems to be faring very well,” Brian Jones, senior U.S. economist in New York at Societe Generale, told Bloomberg. “The labor market is getting better. People realize that the employment situation has improved so they feel better and are probably willing to go out and spend money.”

Purchases are projected to climb at an average 2.4% annualized rate in the second half of the year, according to Bloomberg.

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Safeway in $5 billion dollar deal to sell Canadian stores

BY Katherine Boccaccio

Toronto — Canada’s second-biggest supermarket operator has acquired Safeway’s Canadian portfolio of stores in a $5.7 billion deal that pulls the Pleasanton, Calif., chain completely out of the country.

Sobeys, a unit of Empire Co. Lt., has acquired 213 grocery stores, 62 fuel stations, 10 liquor stores, 12 manufacturing facilities and four DCs, leaving Safeway with 1,400 stores in the U.S. after the deal.

Sobeys’ addition of Safeway’s Canadian assets will nearly double the grocer’s coverage in Canada’s western provinces and cement its No. 2 position behind Loblaw Cos.

The all-cash transaction is slated to close late this year, and will be financed through equity and debt offerings, along with a lease-back deal on some real estate assets being acquired. According to Safeway CEO Robert Edwards, the deal wasn’t solicited and no auction was held. A number of analysts have gone on the record with dubious responses to the announcement, saying that, while the Canadian sale might offer a temporary fix to an ailing balance sheet, Wall Street expects a continued decline in Safeway’s U.S. operations.

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