C-SUITE

Starbucks taps former Sam’s Club CEO as No.2 executive

BY Marianne Wilson

Starbucks Corp. has named a former Walmart executive as its next COO.

The coffee giant appointed Rosalind Brewer as group president and COO, effective Oct. 2. She is the first woman, and first African American, to hold such a high post at Starbucks.

Brewer, who joined the Starbucks board in January, served as CEO of Sam's Club, a division of Walmart, from 2012 until she stepped down in January 2017. Prior to that, she spent six years in executive roles at Walmart. Before joining Walmart, she spent 22 years at Kimberly-Clark Corp.

Brewer is highly regarded throughout the retail industry. When she left Sam's Club, Walmart CEO Doug McMillon told employees in a memo that "she wants a new challenge."

Brewer will report to Starbucks' president and CEO Kevin Johnson and serve as a member of Starbucks senior leadership team. In her new role, Brewer will lead the company’s operating businesses across the Americas (Canada, U.S. and Latin America), as well as the global functions of supply chain, product innovation, and store development organizations.

“Starbucks is a culture-first company focused on performance and Roz is a world class operator and executive who embodies the values of Starbucks," said Kevin Johnson, Starbucks president and CEO. "She has been a trusted strategic counselor to me ever since she joined our board of directors, and I deeply value her insight, business acumen, and leadership expertise."

Brewer will continue to serve on the Starbucks board of directors.

“As a passionate customer of the brand and recently-elected board member, I have a deep love and admiration for the Starbucks brand and its people," Brewer said. "I am so honored to have the pleasure of working with the Starbucks leadership team to realize our highest of aspirations for the company and I look forward to working closely with the astute and talented leaders across the enterprise.”

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BUSINESS INTELLIGENCE/ANALYTICS

Discount giant steps up cloud and AI initiatives

BY Deena M. Amato-McCoy

Walmart is making a bold move as it continues to seek out ways to distance itself from Amazon.

The discount giant is investing in Nvidia chips. These high-level graphical processing units (GPUs) will be the foundation of a robust cloud network where Walmart data scientists can build out AI systems, reported Geek Wire.

A project championed by Walmart’s OneOps team, which builds and maintains the company’s internal application development system, the neural network will position Walmart to leverage AI going forward. Nvidia GPUs are designed to process large amounts of data quickly. Be-sides supporting cloud services, their processing power support AI appli-cations like natural language processing, image recognition, and overall machine learning, according to Business Insider.

Amazon is already dabbling in this arena, and plans to apply AI further across its newest acquisition, Whole Foods. The natural foods grocer is already swimming in increasing volumes of shopper behavior data. This information will be applied to Amazon’s own cloud-based platform, Amazon Web Services (AWS), which already leverages AI-related services, the Geek Wire report said.

Walmart has been impacted by Amazon’s cloud services first-hand. Historically, Walmart technology partners ran their applications on AWS. That was until the discount giant began warning some tech companies in June that if they want its business, they can’t run applications on Amazon’s cloud platform.

The robust GPUs are only one piece of Walmart’s cloud-based strategy. The discount giant is reportedly also building out its cloud-based data centers and licensing its services to other companies. While the data centers will be one-tenth the size of Amazon’s, Walmart expects the move to give it another way to compete against its online nemesis, Business Insider said.

Target is also making moves to distance itself from Amazon’s cloud-based services. In August, Target announced that it was scaling back its use of AWS.

The discounter plans to “aggressively” move e-commerce activities, mobile development and operations away from AWS through the end of the year and into 2018 — a plan it alluded to back in October. Microsoft Azure is one company hoping to grab Target’s cloud-based operations.

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FINANCE

At Home beats Q2 estimates; raises sales outlook

BY Marianne Wilson

At Home Group is on a roll — and then some.

The fast-growing, value home decor retailer on Tuesday reported its 14th consecutive quarter of same-store sales increases and 13th consecutive quarter of over 20% net sales growth.

In the second quarter ended July 29, At Home's net sales increased 23.2% to $232.1 million, from $188.4 million in the year-ago period. Analysts had expected sales of $227.1 million. Same-store sales rose 7.8%.

Net income totaled $9.5 million, compared to $6.3 million in the second quarter of fiscal 2017. Earnings, adjusted for one-time gains and costs, were 18 cents per share, which just beat estimates.

"Customers continue to respond positively to our trend-relevant assortment of home décor at a compelling value, driving growth in both new and existing stores across a wide range of geographies, price points, everyday and seasonal merchandise," said Lee Bird, chairman and CEO of At Home Group.

Based on its year-to-date performance, At Home raised are raised its 2018 net sales outlook to $916 million to $923 million, up from $906 million to $913 million, driven in part by an annual comparable store sales increase of approximately 3.5%.

"We remain focused on reinvesting in our long-term growth opportunities such as direct sourcing while increasing incentive compensation for our hard-working team members," CFO Judd Nystrom stated. "We are pleased to be reiterating our fiscal 2018 pro forma adjusted EPS outlook of $0.73 to $0.75 despite this reinvestment as well as some third quarter headwinds related to Hurricane Harvey."

At Home opened eight new stores in the quarter and closed one store, which was relocated within its existing market. It ended the quarter with 136 stores in 33 states, which represents an 18.3% increase in stores since July 30, 2016.

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