OPERATIONS

Wal-Mart cites trucking safety guidelines

BY Dan Berthiaume

Bentonville, Ark. — In the wake of an accident involving a truck driver for Wal-Mart Stores on the New Jersey Turnpike on Saturday, June 7 that left comedian Tracy Morgan critically injured and killed one of Morgan’s associates, comedian James McNair, Wal-Mart Stores has released a fact sheet about its trucking safety guidelines, as well an official statement regarding the crash.

According to Wal-Mat, it has one of the lowest Department of Transportation (DOT) accident rates and uses some of the strictest driver safety standards in the industry. These include a minimum of 250,000 lifetime miles in a tractor-trailer, no involvement in a fatal accident, no DWI/DUI/OUI/reckless driving convictions in the past 10 years, and no preventable accidents in the past 10 years.

In an official statement, Wal-Mart spokeswoman Brooke Buchanan said Wal-Mart believes driver Kevin Roper, 35, was complying with federal regulations regarding the number of consecutive hours a driver can work. Wal-Mart also has additional regulations governing maximum number of hours that can worked and mandatory rest times.

“With regards to news reports that suggest Mr. Roper was working for 24 hours, it is our belief that Mr. Roper was operating within the federal hours of service regulations,” said Buchanan. “The details are the subject of the ongoing investigation and we are cooperating fully with the appropriate law enforcement agencies. The investigation is ongoing and unfortunately we can’t comment further on the specifics. Federal law requires drivers to work no more than 14 hours for any shift and 11 hours of driving.”

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News

Off price is on target at Burlington

BY CSA STAFF

Burlington Stores president and CEO Tom Kingsbury has the operator of 523 stores headed in the right direction with an off-price model that is delivering results and poised for expansion.

The company plans to open 25 new stores during the remainder of the year after posting first quarter results that saw sales increase 5.9% to $1.13 billion and gross margins expanded to 38.1% of sales from 37.3% the prior year. The company reported profits adjusted to exclude some non-recurring expenses and benefits of $18.6 million, or 25 cents a share, during the quarter ended May 3, compared to $6.1 million, or eight cents a share the prior year.

“We are extremely pleased with our solid results in the first quarter as we continued to build upon our momentum from 2013 with both strong sales and bottom line performance,” Kingsbury said. “We achieved a comparable store sales increase of 2.7%, on top of a 3.4% increase last year, which we believe is a direct result of the continued improvement in the execution of our off-price model. We remain focused on delivering great value, brands and fresh product to our customers every day as well as executing our growth initiatives to improve comparable store sales, expand our retail store base and enhance our operating margins.”

The company opened two new stores during the quarter to end the period with 523 units. The addition of 25 more stores during the remainder of the year has the company expecting full year sales to increase between 5.8% and 6.8% and same store sales to grow between 2% and 3%.

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FINANCE

Francesca’s profit drops 21%, 85 new stores planned

BY Dan Berthiaume

Houston — Francesca’s Holdings Corp. on Tuesday reported a 21% drop in profit during the first quarter of fiscal 2014, to $8.6 million from $10.9 million. Harsh winter weather and higher expenses related to its boutique business contributed to the decline in net income. The company also reduced its annual outlook.

Francesca’s plans to open 85 new stores during fiscal 2014, including 16 in the second quarter.

Net sales rose 8% to $85.4 million from $79 million, spurred by the opening of 62 new stores. Same-store sales decreased 7%. Francesca’s plans to aggressively reduce slow-moving inventory during the fiscal year, which caused it to reduce its guidance for the second quarter and full year.

For the second quarter, net sales are expected to be between $98 million and $103 million assuming a mid to low single digit decrease in same-store sales, including the direct-to-consumer business. For the full year, net sales are now expected to be in the range of $387 million to $399 million assuming a low single digit decrease to flat change in same-store sales, including the direct-to-consumer business

"Total sales growth of 8% to $85.4 million was driven by the strength of our new and non-comparable boutique sales and direct-to-consumer initiatives, contributing to incremental year over year growth of 16%,” said Neill P. Davis, president and CEO of Francesca’s. “Our new boutiques continue to open strong and are meeting our expectations of payback periods of less than one year. Declining sales within our comparable boutiques partially offset these gains and were a reflection of decreases in boutique transactions, which has limited the effectiveness of our merchandise clearance strategies through existing channels."

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