Jarden Corporation adds Barclays exec to board
Jarden Corporation has appointed Ros L’Esperance to its board of directors, bringing the total number of members to 10, seven of whom are independent directors.
L’Esperance is chairman of the global investment banking division at Barclays and serves as a member of several operating and executive committees within Barclays. Prior to being named chairman, L’Esperance was jointly responsible for corporate finance and mergers and acquisitions at Barclays from 2008-2013. She joined Barclays in 2008 from Lehman Brothers where she was co-head of global corporate finance. During her tenure at Lehman Brothers she was also a founder and leader of the Financial Sponsors Group from 1997 through 2007 and previously was a managing director in the Media and Communications Group. She began her career as an associate at Lehman Brothers in 1987. L’Esperance has also been an active contributor to the firm’s philanthropy and diversity initiatives. She is a dual citizen (US/UK) and a board member of the Boys Club of New York, the Southampton Fresh Air Home and BritishAmerican Business.
"As a veteran finance professional working across a wide variety of companies and transactions, Ms. L’Esperance’s experience will be highly valuable to us as we continue to grow our business," said Martin E. Franklin, founder and executive chairman. "Ms. L’Esperance brings a global perspective and a wealth of experience garnered from almost three decades of complex M&A transactions as well as experience in navigating across the full spectrum of capital markets environments and opportunities. We welcome Ros as a director of Jarden and are confident that her professional insights and unique personal perspective will enable her to make a significant contribution to our company."
Jarden Corporation is a leading provider of a diverse range of consumer products with a portfolio of more 120 brands sold globally. Jarden operates in three primary business segments through a number of brands, including outdoor products such as Abu Garcia, AeroBed, Berkley, Campingaz and Coleman, ExOfficio, Fenwick, Greys, Gulp!, Hardy, Invicta, K2, Madshus, Marker, Marmot, Mitchell, PENN, Rawlings, Ride, Sevylor,Shakespeare, Stearns, Stren, Trilene, Volkl, Worth and Zoot; consumer products such as Bionaire, Breville, Crock-Pot, FoodSaver, Health o meter, Holmes, Mr. Coffee, Oster, Patton, Rival, Seal-a-Meal, Sunbeam, VillaWare and White Mountain; and branded consumables such as Ball, Bee, Bernardin, Bicycle, Billy Boy, Crawford, Diamond, Dicon, Fiona, First Alert, First Essentials, Hoyle, Kerr, Lehigh, Lifoam, Lillo, Loew Cornell, Mapa, NUK, Pine Mountain, ProPak, Quickie, Spontex, Tigex and Yankee Candle.
Kroger and Costco outshine Walmart
Walmart didn’t mention competitive issues as a source of sales weakness during its fourth quarter, but reports this week from Kroger and Costco indicate they were at least a contributing factor.
This was especially true in the case of Costco. Recall that Sam’s reported a same store sales decline of 0.1% during the fourth quarter ended January 31, after a 1.8% gain the prior year. Operating income fell 15.3% to $425 million. At the time, Sam’s president and CEO Rosalind Brewer said the underlying health of the Sam’s Club business was sound and that restructuring efforts, including the elimination of 2,300 positions from club operations were allowing Sam’s to be more agile and focused on growth opportunities.
"The strategies we have in place will deliver value for our members, helping to grow the business and drive strong financial performance in fiscal year 2015,” Brewer said.
Sam’s expects its same store sales for the first quarter ending May 2 to be relatively flat following a 0.2% gain last year.
Conversely, Costco grew its U.S. same store sales, excluding fuel, by 5% during its second quarter ended February 16. Sam’s fourth quarter and Costco’s second quarter don’t totally match up, but both companies’ reporting periods included the holiday season. It was evident from Costco’s results and comments from CFO Richard Galanti that Costco went hard after price at the expense of profitability during the shortened and weather impacted holiday season.
For example, despite the 5% domestic comp increase, Costco’s net income declined to $463 million, or $1.05 a share, compared to $547 million, or $1.24 a share, during the second quarter the prior year. Comparisons to the prior year were made more difficult because the period included a 14 cent a share one time tax benefit related to a portion of a special cash dividend the company paid in December 2012 to 401k plan participants.
“Even with that distinction, however, the year-over-year comparison was unfavorable,” Galanti said.
Contributing to profit pressures at Costco were weaker sales and gross margin results in certain non-foods merchandise categories, particularly during the four-week holiday selling season, weaker gross margins in the fresh foods business and lower reported international profits resulting from the significant weakening of foreign exchange rates, according to Galanti.
“The first four-week period of the quarter represented the majority of earnings underperformance in the quarter," Galanti said.
Costco’s second quarter began on November 25, 2013 and encompassed the Thanksgiving weekend which fell late last year and compressed the holiday season.
While Costco was outcomping Sam’s, Kroger was doing the same to Walmart and made no mention of bad weather or food stamp reductions in its earnings release. Kroger reported a 4.3% increase in identical store sales, excluding fuel, and said it expects first quarter comps to rise between 2.5% and 3.5% against a backdrop of minimal inflation.
Walmart reported a 0.4% decline in same store sales at U.S. stores following a 0.3% increase last year. Looking forward, Walmart’s forecast for first quarter same store sales is flat compared to a prior year decline of 1.4%.
PetSmart expands store growth plans
PetSmart plans to open 70 net new stores this year, includingapproximately 50 of its standard prototypes, 20 micro stores and three PetsHotels. That’s 10 more than last year, during which the largest specialty pet retailer of services and supplies also closed five stores and opened three new PetsHotels.
The company will spend remaining capital expenditures on store remodel-type projects, supply chain, technology, maintenance and other infrastructure improvements.
News of the planned store expansion comes in conjunction with the company’s fourth quarter results. Earnings of $1.28 per share were up 19.6% compared to $1.07 per share in the fourth quarter of 2012. Net income increased 14% to $132 million in the quarter, compared to $115 million in the fourth quarter of 2012.
Meanwhile net sales for the quarter increased 2.9% to $1.8 billion. Comparable-store sales, including Internet sales, grew 1.2%. Services sales, which are included in net sales, grew 2.6% to $186 million.
According to PetSmart CEO David Lenhardt, November was the company’s strongest month within the quarter with two key milestones.
“Black Friday was the largest sales day in the company’s history, and Cyber Monday was our largest e-commerce sales day in the company’s history,” Lenhardt said. “December and January were much more challenged from a traffic perspective, consistent with overall retail traffic trends in the centers where we are located.”
Looking ahead to fiscal 2014, the company anticipates comparable-store sales growth of 2% to 4%, and total sales growth of 4% to 6%. For the first quarter of 2014, the company anticipates comparable-store sales growth of low single digits. The company also expects some gross margin deleverage due to the costs associated with the opening of its Northeast distribution center in Bethel, Pa., in the first quarter.