FINANCE

Home Depot Q4 profit slips but tops estimates; raises quarterly dividend

BY Marianne Wilson

Atlanta – Home Depot Inc.’s net income in the fourth-quarter edged down 0.8%, hurt by snow and severe cold and one less week in the period than a year ago. But cost costs helped its earnings to top estimates and the chain raised its quarterly dividend by 21%.

The very cold weather should boost sales this spring, the chain’s most important sales period of the year, as people repair homes damaged this winter, Home Depot said.

Home Depot earned $1.01 billion for the three months ended Feb. 2, compared with $1.02 billion a year earlier.

Revenue decreased 3% to $17.7 million from $18.25 billion, hurt by one less week in the latest quarter and winter storms. Same-store sales for the fourth quarter rose 4.4%.

Full-year net income rose to $5.39 billion from $4.54 billion in the year-ago period. Annual revenue was up 5% to $78.81 billion, from $74.75 billion.

For fiscal year 2014, Home Depot plans to open seven new stores. The retailer also expects net sales growth of 4.8% and same-store sales growth of 4.6%.

"In 2013, we posted our strongest same-store sales growth in 14 years as solid execution and the recovering housing market aided our performance," said Frank Blake, chairman & CEO.

On a conference call, Blake said the chain expects the housing recovery to continue and that “home prices will increase even though at a lower rate and expect that affordability will support the home improvement market.”

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OPERATIONS

Study: Long checkout lines impact customer return rates

BY Dan Berthiaume

Duluth, Ga. – More than 77% of Americans would be less likely to return to a store if they experienced long checkout lines. According to a new study from Omnico Group, after eight minutes, Americans are likely to abandon the checkout line and leave the store with no purchase.

Although more patient than their British counterparts, who leave after six minutes, Americans are more likely to never return to that store as a result of the negative experience than their British counterparts. And with 74% of shoppers in the study owning a smartphone, the study also looked at smartphone adoption and how mobile technology is changing shopping behavior. It found that retailers need to bridge the gap between what consumers expect and what can actually be delivered.

Other study highlights include:

• The top three technologies that will improve the average customer’s in-store experience are self-checkout, free Wi-Fi and "click and collect" (order online, pick up in-store) technology.

• Controlling for price and reward programs are the best to encourage Americans to be loyal customers. Coupons are also well received.

• Millennials, between the ages of 25-34, lead the way in mobile use, particularly when comparing prices and shopping on competitive retailers’ websites while in the store.

"Customers want technology solutions that join up the channels and transform the customer experience," said Bill Henry, CEO of Omnico Group. "Omni-channel solutions enable brick-and-mortar retailers to accelerate their growth in challenging conditions and provide new opportunities to win back customers from pure-play online shops. Retailers that embrace omni-channel technology and offer seamless customer journeys to the shopper have a very bright future.

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P.Siegel says:
Feb-26-2014 02:04 pm

Checkout Lines
WalMart, with all their stores and lomg history, doesn't realize this (and how to stay in stock).

C.Cassidy says:
Feb-26-2014 01:26 pm

Question about the questions
I am hoping you can clarify how the 77% statistic was achieved. Were shoppers asked to project whether or not they would return, or did researchers actually track their behavior for a period of time? Also, were there any questions to clarify whether "never return to that store" applied to the chain or to the particular location? Thanks in advance.

P.Siegel says:
Feb-26-2014 02:04 pm

WalMart, with all their stores and lomg history, doesn't realize this (and how to stay in stock).

C.Cassidy says:
Feb-26-2014 01:26 pm

I am hoping you can clarify how the 77% statistic was achieved. Were shoppers asked to project whether or not they would return, or did researchers actually track their behavior for a period of time? Also, were there any questions to clarify whether "never return to that store" applied to the chain or to the particular location? Thanks in advance.

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FINANCE

Bi-Lo Holdings, Delhaize Group deal moves forward

BY Michael Johnsen

New York — Bi-Lo Holdings and Delhaize Group have received approval from the Federal Trade Commission to proceed with the transaction in which Bi-Lo Holdings will acquire substantially all of the stores in Delhaize’s Sweetbay, Harveys and Reid’s supermarket chains. As part of the deal, Bi-Lo agreed to divest 12 Delhaize America stores in Florida, Georgia, and South Carolina, and Delhaize Group agreed to retain two stores that were initially part of the deal.

“We have been preparing for the integration of the Sweetbay, Harveys and Reid’s banners and store associates for many months and are delighted to now move forward and welcome them to the Bi-Lo Holdings family,” said Randall Onstead, president and CEO of Bi-Lo Holdings.

Bi-Lo Holdings also announced its decision to close eight of the acquired Delhaize America and five Bi-Lo Holdings stores due to close geographic proximity.

“Given the number of stores we are acquiring, we anticipated that we may be asked by the FTC to divest some stores to close the deal. In addition, with the close proximity of some of the Bi-Lo Holdings and Delhaize stores, we also knew that we would have to close a few stores as part of the acquisition,” Onstead said.

Bi-Lo Holdings initially acquired the Sweetbay, Harveys and Reid’s chains from Delhaize for $265 million in May 2013. The deal at the time included 72 Sweetbay stores, leases for 10 prior Sweetbay locations, 72 Harveys stores and 11 Reid’s stores, for a total of 165 stores throughout the Southeast.

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