Tuesday Morning reports rise in profits, sales, comps in Q2
Dallas Tuesday Morning Corp. reported Tuesday that net sales for the second quarter increased 6.2%, $289.6 million from $272.7 million in the year-ago period.
Comparable-store sales rose 5.1% for the quarter. Net income for the second quarter ended December 31, 2009 was $18.5 million, compared with net income of $12.7 million for the same period last year.
“We were encouraged by our increase in comparable store sales and earnings, our strong balance sheet and control of inventory,” said Kathleen Mason, president and CEO.
Tuesday Morning operated 858 stores in 43 states as of December 31, 2009. During the second quarter, the retailer opened eight stores, relocated three stores and did not close any stores.
In 2010 the company said it expects to spend $21 million in capital expenditures and close seven underperforming stores.
Tiny Target coming soon
Before Target can experiment with a small-format store in the range of 60,000 to 100,000 square feet the company plans to carry out a different type of experiment intended to asses the concept’s viability. Three existing stores at undisclosed locations on the West coast, the Midwest and the Northeast will have their assortments pared by 50% in order to gauge consumer reaction to a streamlined product offering of a smaller store.
“We’ve made great progress in our efforts at SKU rationalization across our stores, reducing SKU’s by 10%, and this test is an effort to better understand how we can maximize the convenience and performance of a smaller urban format,” said Target chairman, CEO and president Gregg Steinhafel. The company didn’t say where or when the small stores would open, only that the experiment would take place in a handful of markets during the next several years.
The color of redemption
Target added four-color capability to its receipt marketing program and experienced a significant, but unspecified, lift in redemption compared with its earlier program, which relied on black-and-white printing technology. In addition to increasing redemption rates, the program is persuading customers to shop other areas of the stores. Now, the retailer is putting coupons in the hands of more shoppers, as it has added functionality that lets customers download and redeem coupons using their mobile phones.
Retailers have been talking about consumers increased usage of coupons for more than the past year, so it is not a big surprise then that data out this week shows that redemption activity was up last year. What is surprising is the magnitude of the increase, as there were 3.3 billion coupons redeemed last year, a 27% increase from the prior year when 2.6 billion coupons were redeemed, according to Inmar, the nation’s leading promotion transaction settlement provider. The surge in redemption activity was made possible by the fact that CPG manufacturers relied extensively on coupons, issuing 367 billion of them, as a means to maintain sales volumes as consumers were included to purchase store-brand alternatives.