FINANCE

Roof leak leads to $1.35 million slip and fall verdict against fast-food restaurant

BY Marianne Wilson

A law firm obtained a $1.35 million verdict for a victim after showing that Chipotle Mexican Grille was negligent in failing to repair a roof leak which, the firm said, ultimately lead to the victim's injuries.

Here is the story, according to a release by the West Palm Beach, Florida-based Steinger, Iscoe & Greene:

The store manager noticed the water pooling in the customer queuing area. He mopped and then verified the area was dry.

The following day, the manager found a puddle in the same area, purportedly caused by rainfall. He contacted the corporate office citing safety concerns and requested expeditious repair. He continued to follow up with corporate for weeks, noting the rusted window frame and continued puddles. He then placed a yellow 'caution' sign near the window to warn customers. By mid-June, 2012, however, the corporate office had not facilitated the repair, the law firm stated.

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FINANCE

Weak sales trend hits Dick’s Sporting Goods

BY Gina Acosta

The CEO of Dick's Sporting Goods said strong back-to-school sales couldn't help his company recover from a slowdown in consumer spending in the third quarter.

For the third quarter ended Oct. 31, Dick's reported a 0.7% increase in same-store sales. Earnings were $47.2 million, or 41 cents a share, compared with $49.2 million, or 41 cents a share, in the same period a year ago. Revenue rose 7.6% to $1.64 billion.

"Our positive same-store sales for the quarter reflected a strong back-to-school selling season tempered by slowing trends later in the quarter. Strength in athletic footwear, accessories and athletic apparel was moderated by the impact of record warm weather in more seasonal categories," said Edward W. Stack, chairman and CEO. "With strong operational discipline, we generated earnings per share within our guided range."

The company said inventory was up 13.1% year over year, and that it is working with its vendors to reduce its exposure to slow-selling merchandise by returning product, canceling orders and securing markdown allowances.

"As we look to the fourth quarter, we anticipate a more promotional environment. Our focus will be to actively manage our inventory levels, while continuing to take the appropriate actions to win share and strengthen our business for the long term."

Dick's says e-commerce penetration for the third quarter was 8% of total net sales, compared to 7.3% during third quarter 2014.

For the fourth quarter, Dick's is forecasting earnings in the range of $1.10 to $1.25, compared with $1.30 in the prior year. Same-store sales are projected in a range of down 2% to up 1%, compared with an increase of 3.4% in the same period a year ago.

In the third quarter, the company opened 27 new Dick's Sporting Goods stores and seven new Field & Stream stores. The company now operates 645 Dick's Sporting Goods stores, 75 Golf Galaxy stores and 19 Field & Stream stores.

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FINANCE

Walmart U.S. is Q3 bright spot

BY Mike Troy

Despite weak overall sales growth and an expected decline in third quarter profits, Walmart’s third quarter results offered reasons for the company to be optimistic and for competitors to be concerned.

The company’s overall performance was uneven with sales growing at the massive U.S. stores division increasing 3.8% to $72.7 billion, but operating profits declining 8.6% to $4.5 billion. Same-store sales increased 1.5% on top of a 0.5% increase the prior year, marking the fifth consecutive quarter of comp growth. Especially strong same-store sales of 8% were generated by Walmart’s smaller format Neighborhood market stores.

The company’s international division was negatively affected by a strengthening of the U.S. dollar. Walmart International sales declined 11.4% to $29.8 billion and operating profits fell 6.4% to $1.3 billion. However, excluding the effects of currency fluctuations, Walmart International sales increased 3.2% to $34.7 billion. Sam’s Club’s total sales, negatively affected by lower year over year fuel prices, declined 2.2% to $14 billion. Excluding fuel, same-store sales advanced a meager 0.4% on top of a similar gain the prior year. Sam’s operating profits increased 9.3% to $539 million.

"We are pleased with the continued sales growth in Walmart U.S. and in our international business. Strong traffic and our fifth consecutive quarter of positive comps in Walmart U.S. stores show we are taking the right steps to win with customers,” said Doug McMillon, president and CEO of Wal-Mart Stores, Inc. “Although we still have work to do, we are positioning for sustainable growth through investments in people and technology to deliver a seamless shopping experience at scale."

Total company sales declined 1.3% to $116.6 billion and net income declined 11% to $3.3 billion. Earnings per share of $1.03 were better than the 97 cents analysts forecast, but 10.4% lower than the $1.15 a share the company earned in third quarter 2014.

“We delivered solid earnings per share that was well within our guidance,” said CFO Charles Holley.

The better-than-expected performance caused the company to tighten the range of its full year profit forecast to $4.50 from $4.65 from a forecast of $4.40 to $4.70 that was provided when second quarter results were reported on Aug. 18. That forecast had been a reduction from a projection provided back in February when full year profits were expected to range from $4.70 to $5.05.

As for sales, Holley said, “We continue to expect relatively flat total sales growth for the year. Without the currency impact, our full-year total net sales growth would be around 3%.”

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