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Next up for Alibaba: Robots

BY Marianne Wilson
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Tokyo — Alibaba wants to put a robot, specifically one named Pepper, in your home — or store.

The Chinese e-commerce giant and Foxconn Technology Group announced they are each investing $117.8 million in Japanese telecommunications giant SoftBank’s robotics unit, SoftBank Robotics Holding Corp. Softbank will own 60% of the joint venture, with Alibaba and Foxconn each holding ownership stakes of 20%.

The three companies plan to bring SoftBank’s human-like robot, Pepper, to global markets, envisioning it for use across a range of sectors, ranging from healthcare to at home. Pepper is already in use in some stores in Japan, including SoftBank’s mobile phone shops where it welcomes customers.

The white plastic robot was designed by French robotics company Aldebaran Robotics, a subsidiary of SoftBank. Billed as the “world’s first personal robot with emotions,” it can reportedly recognize human voices and read facial expressions and body language. It can also carry on basic conversations.

"As we enter the data technology era, robotics will become a critical field that catalyzes technological breakthroughs in numerous sectors such as healthcare, public services, research and at home,” said jack Ma, founder and executive chairman, Alibaba Group Holdings. “We are delighted to play an active role in the emerging field of robotics, that with cutting-edge technology and transformative products and services, can positively impact millions of lives.”

SoftBank plan to make the robot available to the public on Saturday.

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Rite Aid gunning for CVS, Walgreens

BY CSA STAFF

On the heels of big news from rival drugstore CVS this week, Rite Aid says it is expecting its EnvisionRx acquisition to increase the company's annual revenue by as much as 18.6%.

Rite Aid expects to close its EnvisionRx deal by the end of July. That will bring the company a lot closer to its ultimate goal of evolving into a comprehensive retail health care company, with in-store services ranging from disease-state management and acute care coupled with the ability to manage better outcomes for payer partners on a broad scale.

"EnvisionRX is a hypergrowth benefit manager that has seemingly come from nowhere to reach $5 billion in annual revenue on coverage of 13 million individual accounts," wrote Brian Nichols, Seeking Alpha analyst,in a blog post earlier this week. "While far smaller than CVS's Caremark or Express Scripts, having 13 million accounts still gives Rite Aid negotiating power with drug developers and the potential to gain new customers from EnvisionRX's account base among other benefits," he noted. "[As much as] 40% of CVS's scripts derive from Caremark," Nichols added.

For fiscal 2016, Rite Aid expects drug store sales to reach between $26.9 billion and $27.4 billion and same-store sales to range from an increase of 2.5% to an increase of 4.5% over fiscal 2015. Adjusted EBITDA guidance is expected to be between $1.35 billion and $1.45 billion and net income is expected to be between $150 million and $230 million or income per diluted share of $0.14 to $0.22.

"Our first-quarter results reflect the continued progress we're making in positioning Rite Aid for growth, including increases in same-store sales, same-store prescription count and Adjusted EBITDA," stated John Standley, Rite Aid chairman and CEO. "We generated these positive results while also making significant strategic investments to continue our transformation into a retail healthcare company," he said. "Through initiatives like adding RediClinics to Rite Aid stores, launching the groundbreaking wellness+ with Plenti program and our pending acquisition of EnvisionRx, we remain highly focused on delivering a differentiated experience to our customers and a higher level of care to the communities we serve."

Same-store sales were a primary driver behind the company's 2.8% lift in first quarter revenues to $6.6 billion, the company reported. Net income totaled $18.8 million, or $0.02 per diluted share, for the fiscal 2016 first quarter ended May 30 and adjusted EBITDA was $299.3 million, or 4.5% of revenues.

Same-store sales for the quarter increased 2.9% over the prior year, consisting of a 0.6% increase in front-end sales and a 3.9% increase in pharmacy sales. Pharmacy sales included an approximate 165 basis point negative impact from new generic introductions. The number of prescriptions filled in same stores increased 1.6% over the prior year period. Prescription sales accounted for 69.1% of total drug store sales, and third-party prescription revenue was 97.7% of pharmacy sales.

Capital expenditures are expected to be approximately $665 million.

In the first quarter, the company relocated two stores, remodeled 108 stores and expanded one store, bringing the total number of wellness stores chainwide to 1,741. The company also closed four stores, resulting in a total store count of 4,566 at the end of the first quarter.

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Pier I Imports: Omnichannel transformation complete

BY Marianne Wilson

Fort Worth, Texas — There was good news in Pier 1 Imports’ first quarter performance, including a 2% increase in same-store sales.

The retailer reported net income of $6.9 million for the quarter, ended May 30, down from $15.1 million in the year-ago period. Its results were in line with expectations.

Total sales rose 3.1% to $432.0 million from $419.1 million, below estimates. The company noted that online continues to perform “exceptionally well,” with strong improvement across all performance metrics, and accounting for nearly 17% of total sales in the quarter.

“For the near term, we are resolutely focused on continuing to execute on the top line and demonstrating greater expense control. With our omnichannel transformation now complete, we are rebuilding our profitability levels through measured sales and margin growth, along with expense leverage,” said Alex W. Smith, president and CEO.

For full-year fiscal 2016, the company expects comparable sales to rise 3% to 5%, versus previous forecast for mid-single digit growth. However, the company reiterated its earnings outlook of $0.83 to $0.87 per share.

“For the near term, we are resolutely focused on continuing to execute on the top line and demonstrating greater expense control,” Smith said. “With our omnichannel transformation now complete, we are confident that we can begin to rebuild our profitability levels through measured sales and margin growth, along with expense leverage.”

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