Late spring puts damper on Home Depot’s Q1 sales
A late start to the spring selling season took a toll on The Home Depot’s first quarter sales, but the company still reported earnings that beat analysts’ expectations.
The Atlanta-based retail giant posted first quarter net sales of $24.9 billion, up 4.4% from the year-ago period but less than the $25.2 billion the Street expected. Total same-store sales rose 4.2%, also less than expected. It was the chain’s 28 consecutive quarter of positive comps, but also the lowest increase since the second quarter of 2015, which also registered 4.2%.
The company’s net income swelled to $2.4 billion, compared to $2.0 billion in the first quarter of 2017. Earnings per share were $2.08, versus the $2.05 per share that the Street expected.
“We are pleased by the strength of our business despite a slow start to the spring selling season,” said Craig Menear, chairman, CEO and president. “Outside of our seasonal business, we had solid results in all markets and categories and are seeing strong momentum in all lines of business during these first few weeks of May. These trends, as well as a favorable housing and macroeconomic backdrop, give us confidence to reaffirm our sales and earnings guidance for fiscal 2018.”
Home Depot reaffirmed its previous forecasts for 2018. It expects sales to rise roughly 6.5% and same-store sales to increase about 5%.
Court gives OK to Southeastern Grocers’ reorg plan
Southeastern Grocers’ amended Chapter 11 reorganization plan has received the green light from bankruptcy court.
The retailer, whose banners include Bi-Lo and Winn-Dixie, said it expects to complete its financial restructuring process and emerge from Chapter 11 in the coming weeks. As previously announced, the plan will decrease the company’s overall debt levels by approximately $600 million (including $522 million of debt exchanged for equity in the reorganized company) and strengthen its balance sheet. Southeastern filed for Chapter 11 in March 2018.
Under the plan, the grocer closed some 94 stores. It will continue to operate more than 575 stores under the Bi-Lo, Fresco y Más, Harveys Supermarket and Winn-Dixie banners.
“We are delighted with the Court’s swift approval which marks a major milestone in the transformation and correction of our business,” said Anthony Hucker, president and CEO, Southeastern Grocers. “This confirmation paves the way for us to emerge as a strong, viable business that is well-positioned to succeed in the competitive retail market.”
Footwear brand files for bankruptcy; store closings likely
The Rockport Group has filed a voluntary Chapter 11 bankruptcy petition — with an eye to being acquired.
The men and women’s footwear brand, which was founded in 1971 and has gone through several changes in ownership, said it has filed for bankruptcy to facilitate its sale to CB Marathon Opco, an affiliate of Charlesbank Equity Fund IX, which will serve as the “stalking horse bidder” in a court-supervised sale process. The agreement is subject to higher and better offers, among other conditions.
The agreement with Charlesbank includes Rockport’s global wholesale assets, e-commerce platform and retail operations in Asia and Europe. In addition, Charlesbank will have the opportunity to evaluate Rockport’s North American retail operations and determine whether it will pursue an acquisition of certain of these locations. Rockport is seeking court authorization to close the North American retail stores that are not acquired by Charlesbank or another party. The company said information about such store closings will be provided by Rockport at a later date.
Currently, Rockport’s wholesale business accounts for about 57% of its total sale.
“The transaction with Charlesbank will ensure the continuation of Rockport’s deep heritage and great brands, and provides a clear path forward for the company by focusing on its global wholesale, independent and e-commerce operations,” Rockport said in a statement. “With the alignment of its operations and the financial strength, consumer expertise and support of Charlesbank, Rockport will be better positioned in today’s evolving retail landscape.”
Rockport has obtained $20 million in new-money debtor-in-possession financing from its existing noteholders, which, in addition to its existing $60 million credit facility, will provide it with liquidity to maintain its operations through the sale process, according to the company.