FINANCE

PetSmart net income jumps 12% in Q3

BY Dan Berthiaume

Phoenix – PetSmart reported a 12% increase in net income, to $92 million from $82 million a year earlier, during the third quarter of 2013. Total sales grew about 4%, to $1.69 billion from $1.62 billion, while same-store sales increased 2.7%.

Looking ahead, PetSmart predicts same-store sales growth of 3%-3.5% and total sales growth of approximately 3% for fiscal 2013. For the fourth quarter of fiscal 2013, PetSmart forecasts same-store sales growth of 2.5%-3.5% and a 2%-3% decrease in total sales.

“Given the challenged consumer environment during the quarter, we are pleased with our results and level of execution,” said David Lenhardt, CEO. “Our performance demonstrates the strength and stability of our business.”

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FINANCE

Destination XL net loss grows in Q3 amid costs

BY Dan Berthiaume

Canton, Mass. – Men’s big-and-tall apparel retailer Destination XL reported a loss of $4.1 million in the third quarter of fiscal 2013, up from $1.6 million a year earlier.

Net sales dropped fractionally to $88.2 million from $88.7 million, partially offset by a 4.4% increase in same-store sales.

Destination XL cited $5.8 million in transition costs as it moves to its DXL format, as a primary driver of its increased net loss. Transition costs, which include pre-opening rent and payroll, store training, infrastructure costs, store closing costs and lease exit costs, are primarily start-up costs associated with the DXL transformation that the company says will not continue once a DXL store is open and the company has completed the transformation in 2015. During this three-year transition, the company expects to incur transition costs of approximately $10 million per year.

Looking ahead, Destination XL expects full-year fiscal results to come in at the low end of previously issued guidance, including a same-store sales increase of approximately 5% and total sales of approximately $395 million. The company expects to open approximately 53 DXL stores (compared with prior guidance of between 55-58 stores) while closing 102 Casual Male XL and Rochester Clothing stores. Certain DXL stores previously anticipated to open in 2013, will instead be opened in early 2014.

"We turned in a solid financial performance, and made excellent progress on our DXL strategy in the third quarter," said president and CEO David Levin. "For the first two months of the quarter, sales were negatively affected by the soft overall retail market due to the government shutdown as well as unseasonably warm fall weather. We then saw a very strong rebound in traffic and sales in DXL stores during October as a direct result of the start of our fall national marketing campaign at the end of September. In fact, we reported a 30.2% increase in sales across all DXL stores in October, and a 25.3% increase for those that have been open longer than a year. In addition, average transaction size for our DXL stores increased by 18.7% during October, traffic increased 11.0% and new customer penetration increased 34.6% over last year.”

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FINANCE

Foot Locker net income flags in Q3, but still beats Street

BY Dan Berthiaume

New York – Foot Locker’s net income fell 2% in the third quarter, dropping to $104 million from $106 million.

Total revenue grew 6.4% to $1.62 million from $1.52 million, above estimates. Same-store sales increased 4.1%.

Cost of sales and income tax expense both increased during the quarter, affecting net income. During the third quarter, the company opened 28 new stores, remodeled or relocated 118 stores, and closed 13 stores.

"It took a strong team effort to produce the solid top and bottom line results that we are reporting this morning," said Ken C. Hicks, chairman of the board and CEO. "We have many strategies underway to drive our business, and the advances we have achieved are contributing to the current momentum we have towards reaching our long-range operational and financial goals.

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