Taxes result in Q1 net loss for EBay
San Jose, Calif. – A $3 billion tax charge on foreign profits resulted in EBay Inc. reporting a net loss of $2.33 billion for the first quarter of fiscal 2013, compared to net earnings of $677 million in the first quarter of the previous fiscal year. Analysts had expected EBay to report net earnings for the quarter, although EBay paid the tax charge in the process of making about $6 billion in offshore cash available.
Dynamic growth in EBay’s PayPal business helped drive a 14% increase in revenue, to $4.26 billion from $3.75 billion, beating analyst expectations of $4.23 billion. During the second quarter of fiscal 2014, EBay expects net revenues of $4.32-$4.42 billion, and net revenues of $18-$18.5 billion in the full fiscal year.
“We delivered a strong first quarter, with enabled commerce volume up 24% and revenue up 14%,” said eBay Inc. president and CEO John Donahoe. “We are committed to delivering sustainable shareholder value and focusing on what matters most to our investors. We are executing our growth plans, capitalizing on the synergies in our portfolio and aggressively executing our $5.0 billion share buyback program. Today, we also announced a non-cash tax charge to facilitate repatriation of $6 billion net in foreign earnings, increasing our available U.S. cash and enhancing our financial flexibility."
E-commerce costs, firearms hit Big 5 in Q1; 12-15 new stores on tap
El Segundo, Calif. – Big 5 Sporting Goods experienced a 72% drop in net income during the first quarter of fiscal 2014, to $2.1 million from $7.5 million in the first quarter of the prior fiscal year. Expenses associated with the retailer’s new e-commerce platform affected its net income.
Big 5 expects to open a net of 12-15 new stores during fiscal 2014, including two in the second quarter. Meanwhile, net sales declined 6% to $231.3 million from $246.3 million and same-store sales shrank 7.9%. Big 5 cited declining sales in firearms and ammunition, as well as unusually mild winter weather in Western states, as hurting sales during the quarter.
For the fiscal 2014 second quarter, the company expects same store sales comparisons in the low negative to low positive single-digit range and earnings per diluted share in the range of $0.12 to $0.20. This guidance reflects the continued softness in demand for firearms, ammunition and related products and the negative effect of the calendar shift of the Easter holiday, during which Big 5 stores are closed, out of the first quarter and into the second quarter this year.
"As expected, our first quarter results declined when compared to a very strong performance during the prior year, due largely to substantially reduced demand for firearms and ammunition products and soft sales of winter products resulting from warm and dry conditions in most of our western markets throughout the winter season," said Steven G. Miller, chairman, president and CEO. "We were encouraged by the strength of our non-firearm and non-winter-related product categories during the quarter. We feel well positioned from a merchandise and promotional perspective for the key selling period during the quarter, which includes Memorial Day, Father’s Day and the start of the summer season."
Lumber Liquidators profit falls amid costs; to open 35-40 stores
Toano, Va. – Net income at Lumber Liquidators decreased 13.2% to $13.7 million during the first quarter of fiscal 2014, compared to $15.8 million in the same period the prior year. During fiscal 2014, the retailer intends to open 35 to 40 new store locations in the expanded showroom format and remodel 25 to 30 existing stores in the expanded showroom format.
During the quarter, net sales increased 6.9% to $246.3 million, from $230.4 million. Same-store sales dropped 0.6%. Selling, general and administrative expenses increased, negatively impacting net income, and Lumber Liquidators estimated unusually severe winter weather adversely impacted net sales in as many as 135 of its 331 store locations in operation during the quarter.
Looking ahead, Lumber Liquidators forecasts net sales of $1.15 billion-$1.2 billion and same-stores growth in the mid-to-high single digits for fiscal 2014.
“Like so many, our team was frustrated by the severity, scale and duration of the harsh winter and the adverse impact it had on our net sales,” said Robert M. Lynch, president and CEO. “Our customers generally follow a long purchase cycle, which we believe was either interrupted or completely suspended due to the unusually severe winter weather. However, as conditions generally became more seasonal in mid-March, customer demand increased. The key strategic initiatives we have implemented over the last two years have strengthened our operations, and we believe we are more capable than ever of serving customers who postponed their flooring purchase in the first quarter."