Target names new strategy and innovation chief
Target Corp. has tapped a McKinsey & Company veteran to head up its innovation efforts.
The retailer appointed Minsok Pak as executive VP, chief strategy and innovation officer. He replaces Casey Carl, who left the company in May.
Pak, who will join the retailer on Sept. 11, will be responsible for Target’s enterprise strategy development and retail innovation with the goal of enhancing the shopper experience and accelerating growth. He will also oversee business development, including mergers, acquisitions, partnerships and joint venture initiatives.
Pak most recently served as senior VP, Lego Retail at The Lego Group. He was responsible for leading Lego's branded retail channel, including more than 250 stores and e-commerce sites across 24 markets.
Prior to Lego, Pak spent two decades with McKinsey & Company, where he held various leadership roles and worked with leading global retail and consumer companies. Additionally, Pak led McKinsey’s digital transformation group. Pak also served (on temporary transfer from McKinsey) as the global executive VP and chief strategy officer at LG Electronics.
"Minsok brings deep business acumen and proven leadership capabilities to Target," stated Target CEO Brian Cornell. "Throughout his career, he has counseled numerous companies and led through significant times of change. He brings strategic vision, an innovative spirit and an ability to address complex business challenges by capturing near-term opportunities and charting a course for the future,” said Cornell. “As we build an even better Target for tomorrow, we must plan purposefully to drive growth and continue instilling innovation in every part of our business. I am confident Minsok is the right leader to fill this critical role.”
Pak will report to Cornell, and serve as a member of Target’s Leadership Team.
Online growth propels Express
Fashion retailer Express topped analysts' second quarter sales and earnings estimates amid surging e-commerce growth.
Express had a net loss of $11.8 million, or 15 cents a share, in the quarter, compared to net income of $10.1 million, or 13 cents a share, in the year-ago period. Adjusted per-share earnings came to 1 cent, better than the consensus for a loss of 1 cent.
Sales fell to $478.5 million from $504.8 million, but were still ahead of estimates. Same-store sales fell 4%. Analysts had predicted a decline of 5.2%. Online sales increased 28% over last year, and now account for 19% of the chain's total sales.
"Comparable sales and earnings were at the top end of our guidance, as our key initiatives gained further traction," said Express CEO David Kornberg. "Our e-commerce performance was outstanding…and store comps showed further sequential improvement.”
Express expressed confidence about the second half of the year.
"We expect the momentum of our initiatives to continue to build and contribute more meaningfully," Kornberg said. "Our marketing efforts are resulting in improved trends in engagement and we believe they will drive increased customer acquisition and retention. We expect e-commerce sales growth to remain solid and store performance to sequentially improve, driven in part by our expanded omnichannel capabilities."
The retailer said it remains focused on managing costs and sees opportunities to enhance the overall efficiency of its business. Express closed 40 stores during the quarter, 19 of which were converted to its outlet-store format.
The company currently operates more than 600 retail and factory outlet stores across the United States and Puerto Rico, in addition to selling products through its e-commerce site.
Teen apparel retailer tops Street
Victoria's Secret loss is American Eagle Outfitters’ gain as the teen apparel retailer posted better-than-expected second quarter results, fueled by strong demand for its Aerie lingerie brand.
Net income fell to $21.2 million, or 12 cents per share, in the quarter ended July 29, from $41.6 million, or 23 cents per share, in the year-ago period. Excluding restructuring and related charges of $0.07 per diluted share, the company’s adjusted EPS was $0.19 for the quarter, above analysts' estimates.
Revenue rose 3%, to $845 million, topping analysts' forecast for sales of $824 million. Total same-store sales rose 2%, beating analysts' average estimate of a dip of 0.4%. Same-store sales were flat at American Eagle, but jumped 26% at American Eagle's lingerie brand, Aerie.
Anthony Riva, analyst at GlobalData Retail, noted that while the American Eagle brand is still struggling to generate growth.
Aerie continues to power ahead with robust sales uplifts.
"Aerie's fresh take on lingerie – especially in the sense of using ordinary women as models and its body-positive advertising – is still striking a chord with consumers and is allowing it to take custom from other players, including Victoria's Secret," Riva said. "New stores and effective marketing have also helped to drive sales."
American Eagle CEO Jay Schottenstein said that sales trends improved in the second quarter, with continued growth in jeans, bottoms, women’s apparel and Aerie.
"Our brands are strong and we have significant opportunity for further growth," he said. "I’m optimistic as we enter the second half of the year, and we remain focused on delivering product innovation, strengthening customer engagement and improving profit flow-through.”
In the second quarter, the retailer had charges totaling $21 million, approximately $0.07 per share, related to the previously announced initiative to explore the closure or conversion of company owned and operated stores in the United Kingdom, Hong Kong and China to licensed partnerships. Additionally, the company incurred charges related to the planned exit of a joint business venture.
American Eagle operates more than 1,000 stores in the United States, Canada, Mexico, China and Hong Kong, and ships to 82 countries worldwide through its websites.