GNC’s profits fall in Q2
Despite online and in-store transaction growth, GNC’s income and revenue declined in the second quarter.
Net income for the quarter ended June 30, totaled $15.7 million compared with $64.0 million in the prior year quarter. Excluding non-cash long-lived asset impairment charges in the current quarter and gains on refranchising in the same quarter last year, adjusted earnings was $0.41.This just beat analyst expectations of $0.40, according to Zacks Consensus Estimate. However, this is a drop from $0.79 for the same period in 2016.
Revenue hit $641.0 million, compared with consolidated revenue of $673.2 million for the second quarter of 2016. Same-store sales decreased 0.9% in domestic company-owned stores (including GNC.com sales) for the quarter. In domestic franchise locations, same-store sales decreased 1.1%.
Transaction growth was up 12.3%, which contributed to an improvement in same-store sales, compared to the first quarter. At the end of the quarter, the company had 7.3 million consumers enrolled in the My GNC Rewards Program. There are approximately 237,000 Pro Access subscription-based premium rewards members.
"We made good progress in the second quarter, and our investments in pricing, loyalty and improving the customer experience continued to deliver positive results," said GNC’s interim CEO, Bob Moran.
"For the second quarter in a row, we saw meaningful transaction growth, improvement in our dot.com business and increased enrollment in our loyalty programs,” he added. “We believe this business is headed in the right direction, and we remain focused on execution and sales growth.”
Online giant to open robotics-based facility in Michigan
Amazon is expanding its distribution fleet in the Wolverine state in a big way.
The online giant plans to open an 855,000-sq.-ft. fulfillment center in Romulus, Michigan — it’s second in the state. The facility will create more than 1,500 new full-time associate roles.
Associates will pick, pack, and ship smaller customer items, such as books, electronics and toys. However, these tasks will be streamlined by technology from Amazon Robotics, a wholly-owned subsidiary of Amazon.com.
Among the solutions designed by the division include autonomous mobile robots, sophisticated control software, language perception, power management, computer vision, depth sensing, machine learning, object recognition, and semantic understanding of commands. These solutions will create what is described as a “highly technological workplace,” according to Amazon.
The online retailer continues to bolster its distribution fleet with these sophisticated solutions. Amazon recently announced that its new facility in South Florida will feature Amazon Robotics. The warehouse, which is dubbed a “mega warehouse,” is set to open in 2018.
Amazon is also opening robotics-based distribution centers in Colorado and in Connecticut.
Luxury department store puts a restructuring plan in motion
Neiman Marcus is making moves to offset its debt and improve its capital structure.
The luxury department store’s first step was to eliminate 225 positions. Affected employees — which span all brands and operating divisions — will receive severance packages, and also be considered for other job openings within the company, according to the Dallas News.
According to the report, a company statement said the retailer is “also assessing our Last Call outlet portfolio to ensure [we are] optimizing the store footprint and ensure we have the right mix of brick-and-mortar and online stores to meet our customers' evolving demands.” Last Call stores, which average about 25,000 sq. ft., are located in outlet centers and neighborhood shopping centers.
Neiman Marcus is also taking steps to adopt operations that reflect customer shopping habits. Specifically, the retailer expects to use digital solutions, including analytics, to provide a more personalized shopping experience, the Dallas News reported.
These decisions come on the heels of Neiman Marcus’ recent announcement that it will not to pursue a potential sale to Hudson’s Bay Company. Despite this decision, the retailer continues to face disappointing earnings.
Neiman Marcus' total revenues fell 4.9% to $1.11 billion in the third quarter, ended April 21, down from $1.17 billion in the year-ago period. Same-store sales decreased 4.9%.
The company reported a net loss of $24.9 million for the quarter. This compared to net earnings of $3.8 million for the same period last year.
In March, Neiman Marcus announced that it was exploring options. Much of the company’s heavy debt load stems from its $6 billion leveraged buyout in 2013. The retailer is also challenged with declining sales due to increased online and fast-fashion competition.
To read more, click here.