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Walgreens posts Q3 gains, misses analyst expectations

BY Dan Berthiaume

Deerfield, Ill. – Walgreens posted gains in sales and earnings during its fiscal third quarter 2013, but still came in below the expectations of Wall Street analysts. Earnings rose 16% to $624 million from $537 million in the third quarter of fiscal 2012. However, excluding certain items, analysts had expected earnings of close to 30 cents a share higher for the quarter.

Similarly, while Walgreens posted quarterly sales of $18.3 billion, up 3.2% from $17.7 billion a year earlier, analysts had predicted an average figure of $18.43 billion. Same-store sales rose 1.4%, with customer traffic declining 3.9% but average basket size increasing 4.4%.

Greg Wasson, CEO of Walgreens, cited strong pharmacy performance, cost control and the positive impact of taking a major stake in U.K. drug chain Alliance Boots as helping to spur growth, but also said challenges remain.

“Front-end sales are still not up to our expectations, and while the economy remains challenging, increasing customer traffic and front-end sales are our near-term priorities with a focus on pricing and promotion, and the leveraging of our Balance Rewards program, which now has 75 million members," Wasson said.

During the third quarter, Walgreens also set aside $25 million to help pay a total of $80 million in fines related to its failure to follow federal guidelines for reporting the distribution of prescription painkillers from a center in Florida.

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Barnes & Noble ends 2013 on down note

BY Dan Berthiaume

New York – Barnes & Noble reported disappointing financial results for the fourth quarter and full fiscal year 2013. During the fourth quarter, Barnes & Noble reported a net loss of $122 million, significantly more than the net loss of $9.7 million reported in fourth quarter 2012. For the full fiscal year, the retailer posted a net loss of $154.8 million, compared with a net loss of $56.9 million the prior fiscal year.

Revenues for the fourth quarter declined 7.4% to $1.3 billion. Full year revenues totaled $6.8 billion, a 4.1% drop from fiscal 2012. The company said the adverse effect of inventory charges related to its Nook e-reader device was a major driver of its poor fourth-quarter and year-end performance.

“Our retail and college businesses delivered strong financial performances in fiscal year 2013,” said William Lynch, CEO of Barnes & Noble. “We are taking big steps to reduce the losses in the Nook segment, as we move to a partner-centric model in tablets and reduce overhead costs. We plan to continue to innovate in the single purpose black-and-white e-reader category, and the underpinning of our strategy remains the same today as it has since we first entered the digital market, which is to offer customers any digital book, magazine or newspaper, on any device.”

For fiscal year 2014, the company expects retail comparable book store sales to decline in the high-single digits on a percentage basis. College comparable-store sales are expected to decline in the low-single digits on a percentage basis.

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Denver Matress parent leverages adaptive design for e-commerce site

BY Dan Berthiaume

Denver – Furniture Row, parent company of home furnishings retailer Denver Mattress, is using the Oracle ATG e-commerce solution to both personalize the Denver Mattress e-commerce site and make it adaptable to the format of any device the customer chooses to employ. Using the “adaptive design” website design methodology enabled by ATG technology, the Denver Mattress site instantly recognizes what type of device — such as PC, smartphone or tablet — a customer is using and optimizes display for that specific screen.

In addition, Oracle ATG functionality helps Denver Mattress provide online customers with personalized content and customized search options based on previous interactions and purchases, location and other factors.

“Customers browse merchandise and compare items using their mobile phones right from the showroom floor, or they start their research at home before they come in,” said Noah Linge, director of digital marketing at Furniture Row. “We want to make that as easy as possible for them, to help them identify what they want, no matter where they are or what device they are using. We considered creating multiple applications for different consumer devices, but we didn’t want to have that extra step.”

The e-commerce upgrade is part of a larger initiative to drive store traffic and increase sales across Denver Mattress stores in 30 states.

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