GNC launches omni-channel fitness campaign
Pittsburgh – GNC Holdings Inc. is launching a month-long fundraising and awareness campaign for Run With Us at more than 5,000 GNC stores and online at GNC.com. Run With Us is a curriculum-based health-=and-wellness program that brings elite track & field athletes and aspiring Olympians into the classroom to demonstrate how exercise and nutrition go hand-in-hand with goal setting and self-esteem.
"GNC’s fundraising campaign for Run With Us is a natural fit with our corporate support for other non-profit organizations that provide health & wellness programs that benefit both individuals and communities," said Joseph Fortunato, chairman, president and CEO of GNC. "GNC employees and customers have given generously to many fitness-focused campaigns in the past, and we anticipate strong support during our month-long campaign for the Run With Us program."
Kellogg makes ‘great’ progress with Project K
Kellogg Company said that its first-quarter results for earnings per share were greater than the company’s expectations, while results for operating profit were in-line with expectations, thanks in part to Project K — the company’s global cost-cutting initiative.
Net sales for the quarter decreased 3.1% to $3.7 billion. Internal net sales, which exclude the effects of foreign currency translation, acquisitions, dispositions and integration costs, decreased 2.4% over the same period.
Operating profit for the quarter was $614 million, an increase of 22.1% driven primarily by the impact that asset returns and changes in interest rates had on pension plans. Underlying internal operating profit, which excludes the effects of foreign currency translation, acquisitions, dispositions, mark-to-market accounting, integration costs and costs associated with Project K, decreased by 5.5%. As expected, the decline in underlying internal operating profit was largely the result of lower sales and the timing of costs of goods sold in the period.
Reported earnings for the first quarter 2014 were $406 million, or $1.12 per diluted share, an increase of 32 percent from the $0.85 per diluted share reported in the first quarter of last year. This quarter’s reported earnings per share included an impact from mark-to-market of $0.22 per share, partially offset by $0.10 per share of costs associated with Project K and approximately $0.01 per share of integration costs related to the acquisition of Pringles. Excluding these items, comparable first quarter 2014 earnings were $1.01 per share, greater than the company’s expectations as the result of the impact of a $0.03 per share benefit in other income and expense.
"Our results for operating profit and earnings in the first quarter were broadly in-line with the expectations we highlighted on the last earnings call," said president and CEO John Bryant. "In addition, we’ve made great progress with Project K and we’ve developed strong investment plans for the remainder of the year. As a result, we’ve reaffirmed our guidance for the full year and expect top-line performance to improve over time."
Net sales posted by Kellogg North America were $2.5 billion in the first quarter, a reported decrease of 2.9%; internal net sales decreased by 2.4%. The U.S. Morning Foods segment posted an internal net sales decline of 5.5%. Internal net sales in the U.S. Snacks segment increased 0.3%. The U.S. Specialty Channels segment posted a 1.7% internal net sales decline in the quarter and the North America Other segment, which is comprised of the U.S. Frozen Foods and Canadian businesses, posted a 2.1% decrease in internal net sales. Reported operating profit in North America decreased 9.4%; internal operating profit declined 6.1%, largely as the result of lower sales and the timing of costs of goods sold.
Reported net sales increased 2.3% in Europe in the quarter; internal net sales decreased 1.7%. In Latin America, reported net sales decreased 9.8% and internal net sales decreased 5.3%, reflecting the impact of an increased food tax in Mexico. Reported net sales in Asia Pacific decreased 10.7% and internal net sales decreased 1.4%.
The company reaffirmed its guidance for full-year internal net sales growth of approximately 1%. Underlying internal operating profit growth is still expected to be in a range between 0 and 2%. Currency-neutral comparable earnings per share growth is still expected to be between 1 and 3%. Integration costs associated with the acquisition of the Pringles business are still expected to be in a range between $0.07 and $0.09 per share.
Costs associated with Project K are still expected to be in a range between $0.60 and $0.65 per share. As a result, earnings excluding the impact of mark-to-market accounting, integration costs, Project K and other items impacting comparability are still anticipated to be between $3.89 and $3.97 per share.
This year’s 53rd week is still expected to add approximately $0.08 per share to earnings. As a result, the company continues to expect an earnings range including the impact of the 53rd week of between $3.97 and $4.05 per share, which the company estimates is in line with the Bloomberg consensus estimate.
Aeropostale to close 125 mall-based P.S. stores; cut 100 jobs
New York — Aeropostale Inc. will close approximately 125 of its mall-based P.S. from Aeropostale kids’ stores by the end of its fiscal year and cut about 100 corporate jobs as part of a larger turnaround effort.
Aeropostale plans to restructure the children’s brand to focus on faster growing sales channels, including off-mall locations such as outlets, e-commerce, and international licensing. It is also exploring other potential third party distribution channels. The company said it expects the move to eliminate pre-tax losses of approximately $15 million that were generated in the mall-based business in fiscal 2013, excluding any impairment charges.
The retailer also unveiled a cost-cutting plan targeting direct and indirect spending across the company, including plans to reduce corporate headcount by about 100 positions.
“The steps we are announcing today build on our turnaround efforts from the past year," said Thomas P. Johnson, CEO of Aeropostale. "Through the restructuring of our P.S. from Aeropostale brand, and expansion of our expense savings program, we will be better positioned financially and have laid the groundwork for the future."
Aeropostale estimates that the moves will result in one-time charges of approximately $40 million to $65 million during fiscal 2014, with as much as $40 million in the form of cash expenses.
The retailer estimates the changes will generate approximately $30 million to $35 million in annualized pre-tax savings, of which approximately $5 million to $10 million is expected to be achieved in fiscal 2014.
In line with prior guidance, Aeropostale continues to expect first quarter 2014 operating losses in the range of $64 million to $68 million, which translates to a net loss in the range of $0.70 to $0.75 per diluted share.
Aeropostale reported its fifth consecutive quarterly loss in March.