Roundy’s swings to Q2 loss on closure costs
Milwaukee – Costs related to the exit of its Rainbow business in the Twin Cities markets, as well as the upcoming closure of a distribution center, helped push Roundy’s Inc. to a net loss in the second quarter of fiscal 2014. Roundy’s reported a net loss of $13.5 million, compared to net income of $11.6 million.
Net sales from continuing operations for second quarter 2014 were $971.9 million, an increase of 12% from $868.3 million for second quarter 2013. Same-store sales dropped 2.2%.
During the quarter, Roundy’s sold 18 Rainbow stores and closed the remaining nine not included in the sale, incurring an impairment charge. Roundy’s is also closing a distribution facility in Stevens Point, Wisconsin in the third quarter of the fiscal year, which has already incurred some costs.
Roundy’s expects to report net losses per share and negative same-store sales growth for the third quarter and full fiscal year 2013.
Fred’s expects Q2 loss; names merchandisers
Memphis, Tenn. – Fred’s Inc. expects to report a net loss of $0.15 to $0.20 per share. The discount chain cited transitional costs associated with implementing its convenience center model, as well as vendor-related cost pressures on pharmacy, as driving the negative profit growth.
However, not all the financial news was bad for Fred’s in the second quarter. Compared to same period a year earlier, Fred’s total sales grew 2% to $490.6 million, from $482.2 million. Same-store sales declined 0.1% for the quarter.
For the month of July, same-store sales rose 0.7%. Fred’s total sales for the month increased 4% to $148 million, from $142.6 million in July 2013. Bruce A. Efird, CEO, said stronger trends in general merchandise sales and improved customer traffic, driven by recent changes to Fred’s marketing plan, helped boost July sales.
“With our new ad program and marketing strategy now in place, we expect these positive trends to continue in the back half of the year,” said Efird. “Complementing improving conditions with general merchandise, we also saw ongoing sales and script growth in the pharmacy department during July, with our best monthly comparable script growth of the year. In July, we also rolled out a clearance and inventory right-sizing program in all of our stores to address unproductive inventory and exit or reduce product categories that do not align with our convenience center model – a key to improving our general merchandise ROI going forward."
In addition, Fred’s announced that Craig Barnes and Kelly Ma will lead its new sourcing team. Barnes assumes the role of senior VP, global sourcing and hardlines, bringing more than 20 years of progressive retail merchandising/sourcing experience to the company. Ma, with eight years of experience in sourcing, product procurement, development, vendor selection, and financial planning, joins as VP, international and domestic sourcing.
Prior to joining Fred’s, Barnes was VP for the global independent aftermarket and OE service for Delphi Products & Service Solution. Previously, Ma was the global sourcing-import coordinator for AutoZone.
In other sourcing-related activity, Fred’s has engaged Test Rite International Inc. as a strategic sourcing contractor to augment the Fred’s global sourcing strategy. Test Rite is a 35-year old organization based in Taipei, Taiwan, and offers sourcing support in Greater China, Southeast Asia, and the Indian sub-continent.
Ann Inc. forecasts Q2 same-store sales drop, cuts guidance
New York – Ann Inc. expects to report a 2.3% decline in consolidated same-store sales for the second quarter of fiscal 2014. Total company net sales are now expected to be $648 million.
At the Ann Taylor brand, total comparable sales increased 0.7%, reflecting an increase of 2% at Ann Taylor, partially offset by a decline of 1.9% in the Ann Taylor Factory channel. At the Loft brand, total comparable sales declined 4.1%, reflecting a decrease of 5.2% at Loft and an increase of 0.3% in the Loft Outlet channel. Selling, general and administrative expenses are expected to be $286 million.
“Despite positive performance through mid-June, the remainder of the second quarter proved more challenging, with soft traffic across the industry and a highly promotional environment,” said Kay Krill, president and CEO. “While we delivered a positive comp for the quarter at Ann Taylor, we were disappointed in our performance at Loft, which experienced continued softness in basic knit tops that represent a meaningful component of Loft’s summer assortment. We took action to move through summer product, which pressured gross margin but enabled us to end the quarter with clean inventories at both brands."