Tax refund season comes to Walmart
More than 2,800 Walmart locations now feature Jackson Hewitt brand tax preparation services and the opportunity to drive big ticket sales once shoppers get their hands on refund checks.
It is a smart strategy for both companies as Jackson Hewitt gains access to Walmart’s weekly flow of roughly 140 million customers and Walmart gains access to shoppers’ refund dollars. Approximately 75% of taxpayers eligible to receive a refund receive an average of $3,000, according to the companies, and Walmart is willing to cash those checks for a nominal fee for customers who don’t have the funds directly deposited into an account.
In addition to this year’s expanded footprint of preparation locations, Jackson Hewitt and Walmart are offering free filing of form 1040EZ, low price check cashing, and the ability to start returns early through Jackson Hewitt’s free W-2 download service.
"Jackson Hewitt has had an ongoing partnership with Walmart and its MoneyCenters for several years because we believe in making the tax preparation and filing process as easy and convenient as we can for our customers and theirs," said Philip H. Sanford, president and CEO of Jackson Hewitt. "We want to bring ‘Tax Refund Joy’ to Walmart even earlier this year, and to do this, we are offering taxpayers several benefits and services at our in-store Walmart kiosks."
Once refunds arrive, Walmart will cash checks up to $1,000 for $3 and checks up to $7,500 for $6.
Lowe’s enhances digital home at CES
MOORESVILLE, N.C. — Lowe’s will unveil the next wave of products and services for Iris, its cloud-based smart home solution, at the 2013 International Consumer Electronics Show.
Iris enables homeowners to monitor and control their homes from anywhere via smart phone, tablet or computer with a free basic level of service. Lowe’s will showcase more than 15 new Iris devices and services developed since the smart home solution’s launch in 2012 at the show.
Lowe’s will also introduce a new product line for the connected home that will offer homeowners an assortment of routers and switches, as well as Wi-Fi range extenders and Powerline solutions that will help expand network coverage by leveraging existing home broadband wiring. Lowe’s plans to roll out the new home area network products to as many as 100 stores in the nation in the first half of 2013, with the full roll out later in the year.
“As the second-largest home improvement retailer in the world, Lowe’s recognizes the evolving needs of today’s homeowner and is well positioned to offer the widest breadth of compatible connected home products and services at an attractive price,” said Kevin Meagher, VP and GM of Smart Home at Lowe’s. “Lowe’s Iris system is an excellent choice for homeowners and renters looking to install a system that improves the safety, efficiency and convenience of their daily lives. Iris is simple and affordable, and it will continue to evolve to manage more elements of the home through a tablet or smart phone.
Lowe’s has new Iris partnerships with Verizon, Honeywell, Whirlpool, Jarden Safety, Orbit Irrigation Products, Pet Safe, Plastair, Spring Window Fashions, Sylvania, Yale and Pella. It has existing partnerships with Schlage, First Alert, GE Jasco and Radio Thermostat of America.
The 2013 International CES runs January 8-11, in Las Vegas, Nevada.
Holidays not so happy at Family Dollar
Despite solid sales trends at Family Dollar during the company’s first quarter ended November 24, margins contracted and profits were less than expected.
The company reported earnings per share of 69 cents that were at the low end of the company’s guidance range of 69 cents to 78 cents and well below analysts’ consensus forecast of 75 cents. The culprits were sales driving initiatives that involved food and consumables that put pressure on gross margins. The company’s second quarter is also off to a shaky start due to a weaker than expected 2.5% same store sales increase in December.
Sales for the quarter increased 12.7% to $2.4 billion due to a combination of a 6.6% same store sales increase, the addition of 125 news stores and the renovation, relocation and expansion of 169 others. The top line improvement didn’t translate entirely to bottom line success though as net income for the quarter was $80.3 million compared with net income of $80.4 million for the first quarter of fiscal 2012. Gross margins also contracted to 34.1% of sales from 35.3% of sales the prior year. Stronger sales of lower margin consumables, higher markdowns and increased inventory shrinkage were partially offset by higher markups and lower freight expense, according to the company.
"Early results from our sales-driving initiatives exceeded our expectations in the first quarter, resulting in more gross margin pressure than anticipated. This mix pressure, combined with expected headwinds from insurance expense, resulted in earnings that were at the low end of our guidance," said Family Dollar chairman and CEO Howard Levine.
He added that investments made to increase Family Dollar’s relevance to customers are delivering results and increasing traffic and market share. The company’s sales were strongest in the consumables category, which increased 18.5% during the quarter, driven primarily by strong growth in tobacco, food and health and beauty care. The 6.6% comp increase was driven by a mix of increase traffic and larger average transaction sizes.
"While the near-term economic environment remains difficult to predict, I continue to be excited about the long-term opportunity for our business," Levine said. "We are seeing tangible benefits from our margin-enhancing investments in global sourcing and private brands, and as we work to drive further benefit from the investments we are making to expand profitability, I remain confident that our efforts will deliver stronger results as we progress through fiscal 2013 and beyond."
Although the company’s second quarter is off to a slow start given the 2.5% December comp increase, Family Dollar said it expects comps for the second quarter to increase between 4% and 5%.
"Despite the ongoing economic uncertainty, we expect that the investments we have made in traffic-driving categories will continue to build sales momentum through January and February, as customers focus even more on basic needs," Levine said.