Staples cuts outlook and scales back expansion as profit disappoints
Framingham, Mass. — Staples reported Wednesday that first-quarter profit rose 5% to $198.2 million, boosted by overseas strength and increased buying by small businesses in North America. Its results were softer than expected, and the company slashed its full-year earnings guidance and said it is scaling back on new store construction.
Revenue for the period ended April 30, rose 2% to $6.18 billion, from $6.06 billion a year ago. Same-store sales slipped 1%, mostly on a decline in Canadian retail customer traffic. International revenue climbed 4%, while North American retail revenue edged up 1%.
"Our first quarter results show that we’re making good progress on our key growth initiatives and we’re gaining share in North America, but at a cost to our bottom line," chairman and CEO Ron Sargent said in a statement.
The retailer now expects to open about 20 new U.S. stores and 10 new Canadian stores, while closing 10 stores, Reuters reported. This will give Staples 20 new stores in North America, about half of what was originally projected.
In addition, Staples is also in the process of "trimming significant square footage" from its current 18,000-sq.-ft. format, Sargent said. He also said the chain "plans to be aggressive in reducing the size of existing stores," as it has about 500 leases up for renewal over the next three years.
Despite missing estimates and scaling back its store plans, Staples reported better first-quarter sales overseas and increased buying by small businesses in North America.
International revenue climbed 4%, helped by strong performances from China and South America. North American retail revenue edged up 1%.
Golden Corral eateries cut energy with E2America’s HVAC controls
Wilmington, N.C. — Efficient Energy America (E2America) announced that Platinum Corral, a multi-state franchise operator of Golden Corral restaurants, has signed an agreement to install the supplier’s intelligent heating, ventilation and air-conditioning (HVAC) control system in all 30 of its stores.
The automated, self-refining, wireless retrofit system will allow Platinum Corral to reduce both gas and electricity costs, usage and carbon emissions, the company said. Platinum Corral expects to lower its electricity costs by as much as $252,000, annually.
Platinum Corral’s previous energy initiatives included scheduled and preventative maintenance on HVAC compressors. But the company said it was not seeing significant savings, and was typically paying about $9,000 per store per month for gas and electricity.
Initially, the HVAC control system was installed in five Golden Corral restaurants whose electricity bills decreased by as much as $700 per store each month following the implementation.
"It took us a very short period of time to see the benefits in the five initial stores, and to realize how much more we could be saving by implementing E2America’s system in all 30 of our restaurants,” said Billy Sewell, president of Platinum Corral. “What’s more, managers in the first five stores have reported that the temperature consistently feels more balanced, and therefore much more comfortable for our staff and guests."
E2America worked with Platinum Corral’s utility providers to ensure that the company was able to take advantage of incentive programs offered to businesses that implement energy efficiency measures. Platinum Corral expects to qualify for a $5,000 to $8,000 electricity company rebate per store for installing the E2America technology. Additionally, federal legislation changes regarding capital expenditures and accelerated depreciation allow Platinum Corral to write off 100% of the remaining balance on its 2011 tax returns. This reduces the effective ROI to less than eight months.
KFC opens eco-friendly restaurant in Indianapolis
Indianapolis — KFC is looking to earn LEED (Leadership in Energy and Environmental Design) certification for its newest restaurant in Indianapolis. The building is designed to use 25% less energy and water than a conventional KFC restaurant. It features energy-efficient cooking equipment, LED lighting, locally sourced building materials, recycling for cooking oil and plastics, fixtures designed for lower water use, and parking preference for hybrid vehicles.
“The restaurant is part of KFC’s E3 initiative, which seeks economically responsible ways of saving energy and being environmentally aware,” said Roger McClendon, chief sustainability officer for parent company Yum! Brands.