Dollarama Reports Fiscal 2020 First Quarter Results

Highlights:

  • Strong top line growth with 9.5% increase in sales and 5.8% increase in comparable store sales.
  • 50 basis points upward revision of full-year comparable store sales assumption to new range of 3.0% to 4.0%; reiterating full-year guidance on gross margin, SG&A and EBITDA as a percentage of sales.
  • Opening of 11 net new stores; on target to reach 60-70 net new stores by fiscal year-end.
  • Distribution expansion project enters final phase, on time and on budget.
  • Sales for what was the first quarter of the company’s 2020 financial year totalled $828.0 million, up from $756.1 million in the same quarter last year.
  • Dollarama had 1,236 stores at the end of its latest quarter, up from 1,170 stores a year ago.

“Fiscal 2020 is off to a good start for Dollarama, with strong top line growth and comparable store sales, including a notable increase in basket size and traffic, reflecting the positive consumer response to our value proposition and various category management and merchandising initiatives,” chief executive Neil Rossy said in a statement.

Source: CTV News  Source: Dollarama.com

HBC Reports First Quarter 2019 Financial Results

Highlights:

  • Revenues totalled $2.1 billion, with comparable sales up 0.3% excluding Home Outfitters and Lord + Taylor currently undergoing a review of strategic alternatives.
  • Saks Fifth Avenue comparable sales up 2.4%, continuing to deliver industry-leading results with a two-year stacked comp of 8.4%.
  • Saks OFF 5TH returned to growth, with a 4.4% comp in the first quarter. 
  • Net income of $275 million in the first quarter, reflecting the $817 million gain on Lord + Taylor New York City flagship building saleAdjusted EBITDA was $44 million in the first quarter.
  • HBC solidifies strategic focus on North America with agreement to sell remaining stakes in German real estate and retail operations for $1.5 billion.

“We are seeing progress on a number of crucial fronts from our continued work to fix the fundamentals and reposition HBC for the future,” said Helena Foulkes, HBC CEO. “Strategically, we have simplified the organization and placed a greater emphasis on our North American retail operations. We are exercising financial discipline while making the necessary investments to capitalize on our greatest opportunities – Hudson’s Bay and Saks Fifth Avenue. Once the European transactions are complete, we will have finished two real estate transactions at near or better than our estimated equity values. The real estate transactions and our pursuit of strategic alternatives for Lord + Taylor, further demonstrate the bold actions we’ve taken to move the company forward and we are optimistic about our prospects.”

Source: HBC Investor

Shareholders in HBC propose to take the company private

A group that currently controls 57% of the shares in Hudson’s Bay Company is proposing to buy up the rest of the shares and take the retailer private.This group includes HBC’s executive chairman, Richard Baker as well as WeWork which purchased some of HBC’s real estate in 2017. 

“While we continue to believe in HBC’s long-term potential, it has become clear that the significant challenges, risks and uncertainties facing HBC in the rapidly evolving retail environment are best addressed in a private market setting,” Baker said.

The shareholder group is offering $9.45 per share in cash for the company. On June 7th, the shares closed at $6.37, so the deal is a 48% premium to what they’re currently worth and values the company at roughly $1.7 billion. Shares in the retailer jumped up 45% to $9.25 a share when the TSX opened on June 10th.

Barry Schwartz, chief investment officer at Baskin Wealth Management in Toronto, said in an interview that the move could lead to the end of the company as a retailer, because the people acquiring it are most likely interested in the company’s vast real estate holdings.”The value is there, it’s just there’s no value there in being a retailer any further,” he said. If that’s the plan, “getting out of the public spotlight is the right step at the moment.”

“We are in a retail apocalypse,” Barry Schwartz continued. Online sales at companies such as Amazon are growing by more than 25% per year “and that’s coming from traditional retailers,” he said. Broad-based department stores are among the hardest hit sectors, which is why he doubts the retail arm of the business will stick around for long even if the new owners succeed in monetizing the real estate assets.

HBC says it has formed a special committee to review the deal.

Source: CBC 

Amazon-Whole Foods Is Two Years Old. And?

It has been two years since Amazon purchased Whole Foods. Since then Amazon has expanded grocery delivery and online ordering, cut prices on select items and offered discounts for Prime members. YouGov, a company that surveys shoppers, found that Whole Foods’ value perception has improved since the acquisition and Amazon has started chipping away at the “Whole Paycheck” reputation. 

However, Whole Foods hasn’t changed much overall. In addition to expanding home delivery or in-person pickup of online grocery orders, Amazon has enmeshed its brand more with Whole Foods’s. People can buy Whole Foods products on Amazon, use an Amazon-branded credit card to rack up rewards, pick up Amazon packages at lockers 

inside Whole Foods locations, and use the Alexa digital assistant to start a Whole Foods order. These integrations and establishing Prime as the loyalty program for Whole Foods weren’t trivial changes, but they’re not groundbreaking, either.

Amazon says that “the goal has always been to make consistent, smaller innovations over time” to expand the Whole Foods mission of organic and quality food. Despite the changing feelings about Whole Foods prices, YouGov data shows that U.S. consumers’ willingness to consider purchasing at Whole Foods has settled right around where it was at the time the deal was announced.

Amazon also hasn’t been transparent about what financial improvements, if any, have resulted from its ownership of Whole Foods. Amazon won’t give up fighting for a much larger share of the more than $800 billion that Americans spend on food shopping every year, and Whole Foods was a big bet that physical stores remain key to cracking that 

market. What’s perhaps surprising is that two years in, there have been few glimpses of new ideas that Amazon could bring to the supermarket shopping.

Source: The Star