FINANCE

Report: CVS considering Brazil drugstore purchase

BY Antoinette Alexander

Woonsocket, R.I. – CVS Caremark is reportedly considering a purchase of Brazilian drugstore chain Drogarias Pacheco São Paulo (DPSP) as it looks to further expand its presence in Brazil, according to news reports.

Following the alleged rejection of its first offer of 4.5 billion Brazilian reais ($2 billion), CVS is reportedly looking to possibly make another offer, the Wall Street Journal reported, citing the local newspaper Valor Economico. DPSP has reportedly set a minimum price for the company at BRL5.9 billion.

CVS spokesperson Mike DeAngelis told Drug Store News that the company does “not comment on market rumors.”

In 2013, the retailer acquired privately held Brazilian drugstore chain Onofre, the eighth-largest drug chain in Brazil, marking its foray into the international drugstore space.

During CVS’ Annual Shareholder Meeting earlier this month, CVS Caremark president and CEO Larry Merlo said of the Onofre acquisition that the company has several pilots underway that are “going well,” and he sees opportunity for further growth within Brazil’s highly fragmented market.

CVS Caremark Corp. is reportedly considering a purchase of Brazilian drugstore chain Drogarias Pacheco São Paulo (DPSP). According to the Wall Street Journal, CVS has already had a $2.5 billion purchase offer rejected by DPSP, but may make a second offer.

Unconfirmed reports indicate DPSP has set a minimum purchase price of about $2.65 billion. CVS already owns a controlling stake in Brazilian drugstore retailer Drogaria Onofre.

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FINANCE

Foot Locker has active Q1

BY Dan Berthiaume

New York – Foot Locker Inc. had a successful first quarter of fiscal 2014, with rising sales driving solid net income performance. Net income grew 17% to $162 million, from $138 million in the first quarter of fiscal 2013.

Net sales rose 14% to $1.87 billion, from $1.64 billion. Same-store sales climbed 7.6%.

"We are off to a great start in 2014, with our first quarter results representing the highest quarterly sales and profits in our history as an athletic company, for the third consecutive year," said Ken C. Hicks, chairman of the board and CEO. "Every person in our company is playing an important role in producing our current strong performance, bringing passion, energy, and excellence to the execution of our strategies and initiatives as we work towards the achievement of our long-term financial and operational objectives."

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New York & Co. swings to loss in Q1

BY Dan Berthiaume

New York – New York & Company Inc. swung to a net loss of $300,000 in the first quarter of fiscal 2014 from net income of $1.6 million in the first quarter of the previous fiscal year. Net sales were $219.6 million, down 4% from $227.5 million, and same-store sales declined 2.2%.

During the second quarter, New York & Company plans to open approximately four new outlet stores, remodel four existing locations, and close one store, ending the second quarter of fiscal year 2014 with roughly 509 stores, including 57 outlet stores. Net sales for the second quarter of fiscal year 2014 are expected to increase slightly from the prior year, and same-store sales are expected to be flat to up slightly for the second quarter.

The elimination of a one-time tax benefit from the prior year helped swing New York & Co. to a net loss, while the closure of 12 stores dampened net sales.

“While top-line sales were softer than anticipated, comparable store sales improved during the latter portion of the quarter,” said Gregory Scott, CEO of New York & Company. “We were especially encouraged that in a tough retail environment we achieved positive comparable store sales in our e-commerce business and in stores in the western part of the country, as well as Florida. We also continue to see great success with the Eva Mendes Collection, particularly in dresses and skirts.”

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