Online sales of auto parts historically have lagged just about every other retail category.
Customers tend to use the internet to research parts and pricing but more often than not visit a brick-and-mortar store to make the purchase.
AutoZone has revamped its web offerings to cater to those consumers, and perhaps convince more of them to buy online, CEO William C. Rhodes said in a conference call Dec. 7.
"As consumer behaviors change and as we enhance our sites, we believe this is likely to continue to grow at a fairly rapid pace," Rhodes said. "Today, many of our in-store sales are influenced by our customers' interaction with us over the web."
The auto-parts chain with more than 4,200 U.S. stores has streamlined the number of steps it takes to find parts online to match a customer's car, and in November launched a separate site for commercial customers at autozonepro.com.
For customers, the advantages of shopping for parts online include "a wealth of information over and above" what is available at the store counters, along and a much larger assortment, said CFO William T. Giles.
The approach appears to be working. Online sales for AutoZone rose 11 percent in the first quarter compared to last year.
Tuesday, December 7, 2010
Friday, December 3, 2010
Kroger house brands losing share to national brands in hopeful sign for economy
More Kroger customers are opting for brand-name products instead of house-label items in a trend that has company executives feeling cautiously optimistic about consumer spending.
The company said sales of national brand products rose in the third quarter while sales of Kroger's more than 20,000 house-branded items fell from about 35 percent of sales to 34 percent.
CEO David Dillon said strong sales last year for private-label products, brought on in part to an unwillingness by the big food players to drop prices to match deflation, have made comparisons tough this year. Another factor: National brands have invested in more advertising and promotional activities in 2010.
"I also think it's a partial indication of some of the customer base seeing that the world around them has improved," Dillon said in a Dec. 2 conference call, before cautioning listeners to read too much into the trend.
One trend that's more clear: The widening distance between the haves and have-nots.
Kroger officials noted that the chain has seen sales rise for Boar's Head meats, high-end wines and Starbucks coffee at its in-store kiosks. At the other end of the spectrum, more than double the number of customers are using food stamps for groceries than just three years ago.
The company said sales of national brand products rose in the third quarter while sales of Kroger's more than 20,000 house-branded items fell from about 35 percent of sales to 34 percent.
CEO David Dillon said strong sales last year for private-label products, brought on in part to an unwillingness by the big food players to drop prices to match deflation, have made comparisons tough this year. Another factor: National brands have invested in more advertising and promotional activities in 2010.
"I also think it's a partial indication of some of the customer base seeing that the world around them has improved," Dillon said in a Dec. 2 conference call, before cautioning listeners to read too much into the trend.
One trend that's more clear: The widening distance between the haves and have-nots.
Kroger officials noted that the chain has seen sales rise for Boar's Head meats, high-end wines and Starbucks coffee at its in-store kiosks. At the other end of the spectrum, more than double the number of customers are using food stamps for groceries than just three years ago.
Tuesday, November 23, 2010
Women falling out of love with J. Crew?
The news that trendy retailer J. Crew is being acquired in a $3 billion deal helped obscure the company's disappointing quarter and weak outlook.
In a potentially ominous sign for the retailer, women's apparel is a growing weak spot, said CEO Millard Drexler in a conference call Nov. 23.
The company lowered its fiscal 2010 earnings per share outlook to a range of $2.08 to $2.13 per share, and comparable-store sales in the negative low single digits.
"Needless to say, we are disappointed with our third quarter results and our fourth quarter outlook," Drexler said. "While we are seeing strength from our men's, crewcuts, accessories, factory and Madewell business, the softness has been primarily osolated to our women's retail and direct business."
In a potentially ominous sign for the retailer, women's apparel is a growing weak spot, said CEO Millard Drexler in a conference call Nov. 23.
The company lowered its fiscal 2010 earnings per share outlook to a range of $2.08 to $2.13 per share, and comparable-store sales in the negative low single digits.
"Needless to say, we are disappointed with our third quarter results and our fourth quarter outlook," Drexler said. "While we are seeing strength from our men's, crewcuts, accessories, factory and Madewell business, the softness has been primarily osolated to our women's retail and direct business."
Sunday, November 21, 2010
No more 'no interest no payments' offers means fewer charges on store cards
Fewer customers these days are using store credit cards, at least at Home Depot, after credit card reform enacted in February put an end to "no payment, no interest" offers.
The chain, which operates more than 2,240 stores, has seen its private-label credit card penetration drop from 26 percent last year to 23 percent this year.
About half of the drop is because the company can no longer offer six months of no payments and no interest on purchases above $299, Chief Financial Officer Carol Tome said on a conference call Nov. 16. The change was part of the Credit Card Accountability, Responsibility and Disclosure Act.
"It's now no-interest, minimum-payment, and customers are looking at that minimum payment and albeit it's a small payment, but they're looking at that payment and saying I'm not sure that value proposition works for me anymore," Tome said. "And so they're switching out to bank cards, and we've seen an increase in our bank card penetration accordingly."
The chain, which operates more than 2,240 stores, has seen its private-label credit card penetration drop from 26 percent last year to 23 percent this year.
About half of the drop is because the company can no longer offer six months of no payments and no interest on purchases above $299, Chief Financial Officer Carol Tome said on a conference call Nov. 16. The change was part of the Credit Card Accountability, Responsibility and Disclosure Act.
"It's now no-interest, minimum-payment, and customers are looking at that minimum payment and albeit it's a small payment, but they're looking at that payment and saying I'm not sure that value proposition works for me anymore," Tome said. "And so they're switching out to bank cards, and we've seen an increase in our bank card penetration accordingly."
Wednesday, November 17, 2010
Abercrombie & Fitch closing more than 100 stores in strategy shift to internet, overseas
Abercrombie & Fitch plans to close even more of its flagship brand's U.S. stores in the next few months than it predicted earlier this year, as the youth-oriented retailer focuses instead on international growth and internet sales.
Online sales for Abercrombie and its stable of spinoff brands have jumped 40 percent this year and now make up 10 percent of the business, CEO Michael Jeffries said on a Nov. 16 conference call with Wall Street analysts. International sales, also rising rapidly, now make up about 18.5 percent of sales for the New York-based company.
The chain now plans to close about 67 U.S. Abercrombie & Fitch stores by the end of 2010, up from 60, and another 40 to 50 locations next year. The company operates about 1,100 stores in the U.S., of which 347 are the flagship Abercrombie & Fitch, 537 are Hollister Co. and 205 are abercrombie kids locations.
Abercrombie CFO Jonathan Ramsden said the costs of the closures will be minimal since in most cases the closures coincide with lease expirations. Stores with low volumes and those in lower-end malls were the first targeted for closure.
The company, which has not yet provided a list of stores slated for closure, plans "modest incremental markdowns" at the affected locations.
Online sales for Abercrombie and its stable of spinoff brands have jumped 40 percent this year and now make up 10 percent of the business, CEO Michael Jeffries said on a Nov. 16 conference call with Wall Street analysts. International sales, also rising rapidly, now make up about 18.5 percent of sales for the New York-based company.
The chain now plans to close about 67 U.S. Abercrombie & Fitch stores by the end of 2010, up from 60, and another 40 to 50 locations next year. The company operates about 1,100 stores in the U.S., of which 347 are the flagship Abercrombie & Fitch, 537 are Hollister Co. and 205 are abercrombie kids locations.
Abercrombie CFO Jonathan Ramsden said the costs of the closures will be minimal since in most cases the closures coincide with lease expirations. Stores with low volumes and those in lower-end malls were the first targeted for closure.
The company, which has not yet provided a list of stores slated for closure, plans "modest incremental markdowns" at the affected locations.
Monday, November 15, 2010
Lowe's cutting thousands of store-level jobs as economic recovery remains sluggish
The home-improvement chain Lowe's has cut the equivalent of about 10 full-time employees at each of its more than 1,700 stores as company executives say the economic recovery remains sluggish.
Chief Financial Officer Robert Hull Jr. said the chain has cut the number of payroll hours per week it takes to run the average Lowe's store by almost 400 hours. He would not say how many total hours it takes to run one of the stores.
Hull made the remarks on a conference call Nov. 15, in response to a question from a Deutsche Bank analyst.
Here's the corporate-speak version: "A lot of work has been done by the store operation team regarding store payroll, really focusing on decomposing processes, leveraging thoughts from the field on how we can do things better," Hull said. "As a result we have a greater proportion of hours in customer facing activities and the stores have been able to reduce the number of hours to run a Lowe's store by almost 400."
The company also closed two regional offices during the third quarter. The cuts are part of a wider effort to position Lowe's for a "slow growth environment" with continued uncertainty in employment and housing.
Chief Financial Officer Robert Hull Jr. said the chain has cut the number of payroll hours per week it takes to run the average Lowe's store by almost 400 hours. He would not say how many total hours it takes to run one of the stores.
Hull made the remarks on a conference call Nov. 15, in response to a question from a Deutsche Bank analyst.
Here's the corporate-speak version: "A lot of work has been done by the store operation team regarding store payroll, really focusing on decomposing processes, leveraging thoughts from the field on how we can do things better," Hull said. "As a result we have a greater proportion of hours in customer facing activities and the stores have been able to reduce the number of hours to run a Lowe's store by almost 400."
The company also closed two regional offices during the third quarter. The cuts are part of a wider effort to position Lowe's for a "slow growth environment" with continued uncertainty in employment and housing.
Thursday, November 11, 2010
Toy Story 3 flies off shelves, but Disney CEO no more optimistic about future for DVDs
Walt Disney CEO Robert Iger predicts consumers will continue to cut back on buying movies in physical form even as the Disney blockbuster Toy Story 3 flies off store shelves.
A bad economy isn't the only reason DVD sales are down, Iger said in a conference call Nov. 11. Also to blame: "More competition for people's time."
"It’s a title-driven business, no question about it," he said. "I mentioned Toy Story 3. If ever there is a title that would do well, it would be Toy Story 3."
The movie, released Nov. 2, is the nation's top selling and renting DVD. But doing well in 2010 has a different meaning than few years ago, Iger said.
"If you were to look at the numbers for Toy Story 3, which will be extremely strong, versus what films did just three, four, five years ago, you would be sobered by those numbers."
Disney is trying to counter the DVD headwinds in part by offering more value to buyers: A Toy Story 3 multipack consisting of a blu-ray disc, standard DVD and a streamable file have made up about 25 percent of the movie's sales.
A bad economy isn't the only reason DVD sales are down, Iger said in a conference call Nov. 11. Also to blame: "More competition for people's time."
"It’s a title-driven business, no question about it," he said. "I mentioned Toy Story 3. If ever there is a title that would do well, it would be Toy Story 3."
The movie, released Nov. 2, is the nation's top selling and renting DVD. But doing well in 2010 has a different meaning than few years ago, Iger said.
"If you were to look at the numbers for Toy Story 3, which will be extremely strong, versus what films did just three, four, five years ago, you would be sobered by those numbers."
Disney is trying to counter the DVD headwinds in part by offering more value to buyers: A Toy Story 3 multipack consisting of a blu-ray disc, standard DVD and a streamable file have made up about 25 percent of the movie's sales.
Wednesday, November 10, 2010
Macy's trains associates on new 'MAGIC' sales strategy
Macy's has been training its more than 130,000 sales associates and managers on selling skills before the holiday shopping season.
Naturally, the program needed an acronym in sync with the chain's "Magic of Macy's" ad campaign. It's called MAGIC Selling.
Chief Financial Officer Karen Hoguet explained what it stands for in a call with Wall Street analysts Nov. 10: "The M is for meet and make a connection; the A, ask questions and listen; G, give options and give advice; I, inspire to buy; and C, celebrate the purchase."
Seasonal hires will get a shortened version of the training program.
Naturally, the program needed an acronym in sync with the chain's "Magic of Macy's" ad campaign. It's called MAGIC Selling.
Chief Financial Officer Karen Hoguet explained what it stands for in a call with Wall Street analysts Nov. 10: "The M is for meet and make a connection; the A, ask questions and listen; G, give options and give advice; I, inspire to buy; and C, celebrate the purchase."
Seasonal hires will get a shortened version of the training program.
Tuesday, November 9, 2010
Fossil orders suggest fashion watches could be this year's hottest holiday gift
Timepieces are flying off store shelves as quickly as Fossil Inc. can make them.
In an earnings call Nov. 9, company executives said each of its numerous watch brands saw sales gains of at least 30 percent in the third quarter. Worldwide, watch sales rose by 49 percent.
The trend is the strongest Fossil executives have seen toward fashion watches in at least 10 years and is being driven by a strong lineup of watches with unique designs and mixed materials.
Retailers are taking notice, putting in big orders for the holiday shopping season. North American wholesale shipments jumped 74 percent.
After about five years of flat sales of fashion watches, "there's now a thought process that it's about the 'it' watch and everybody wants to own a watch," said CEO Kosta Kartsotis.
Kartsotis added: "There's a reason to buy a watch, and it's not about telling time."
In an earnings call Nov. 9, company executives said each of its numerous watch brands saw sales gains of at least 30 percent in the third quarter. Worldwide, watch sales rose by 49 percent.
The trend is the strongest Fossil executives have seen toward fashion watches in at least 10 years and is being driven by a strong lineup of watches with unique designs and mixed materials.
Retailers are taking notice, putting in big orders for the holiday shopping season. North American wholesale shipments jumped 74 percent.
After about five years of flat sales of fashion watches, "there's now a thought process that it's about the 'it' watch and everybody wants to own a watch," said CEO Kosta Kartsotis.
Kartsotis added: "There's a reason to buy a watch, and it's not about telling time."
Monday, November 8, 2010
Priceline.com may bid on acquisitions after blowout quarter
Will Priceline.com Inc. take a look at more merger-and-acquisition opportunities after its purchase of international car-rental specialist TravelJigsaw helped it report a blow-out quarter Nov. 8?
Citigroup's Mark Mahaney posed the question at the end of the company's earnings conference call, during which executives detailed a quarter well ahead of expectations thanks to a 54 percent surge in worldwide hotel bookings and a 97 percent rise in car-rental days.
"We think that the rental car business internationally is a very attractive business," responded CEO Jeffery H. Boyd. "Would we potentially be more interested in doing something outside the hotel and the car hire space like air and packages? I think the airline ticket business in Europe is challenging for online travel agents. I would never say never on something like that but we think the rental car business is much more attractive."
Citigroup's Mark Mahaney posed the question at the end of the company's earnings conference call, during which executives detailed a quarter well ahead of expectations thanks to a 54 percent surge in worldwide hotel bookings and a 97 percent rise in car-rental days.
"We think that the rental car business internationally is a very attractive business," responded CEO Jeffery H. Boyd. "Would we potentially be more interested in doing something outside the hotel and the car hire space like air and packages? I think the airline ticket business in Europe is challenging for online travel agents. I would never say never on something like that but we think the rental car business is much more attractive."
Friday, November 5, 2010
Sam Adams parent launches program to deliver fresher beer
Good news for beer drinkers: The parent company of the Samuel Adams brand is working on a way to deliver fresher beer coast to coast by installing a sort of just-in-time system for brewing.
Boston Beer Co. is testing a program called Freshest Beer in Town to reduce the amount of time beer sits in warehouses. The program aims to deliver fresher beer to consumers while taking costs out of the distribution system, company officials said in an earnings call Nov. 4.
Wholesalers typically carry about four to five weeks of packaged inventory and three to four weeks of draft inventory. In tests with two distributors, Boston Beer Co. reduced inventories by about two weeks, allowing the company to respond more quickly to changes in demand.
The company still is evaluating the change for "unexpected effects" but hopes to roll it out for 50 percent of the Sam Adams volume by the end of 2011. BBC executives said it is not clear whether the program will lead to any actual savings for the company, but it should lower expenses for distributors.
"We saw it as an opportunity to improve the quality of the Sam Adams that a drinker gets," CEO C. James Koch said during the call. "By taking weeks out of the wholesale inventory, we could give them a better glass of beer. Certainly the foundation we believe for our success has been the quality of our beer and this was an opportunity to strengthen that foundation."
Boston Beer Co. is testing a program called Freshest Beer in Town to reduce the amount of time beer sits in warehouses. The program aims to deliver fresher beer to consumers while taking costs out of the distribution system, company officials said in an earnings call Nov. 4.
Wholesalers typically carry about four to five weeks of packaged inventory and three to four weeks of draft inventory. In tests with two distributors, Boston Beer Co. reduced inventories by about two weeks, allowing the company to respond more quickly to changes in demand.
The company still is evaluating the change for "unexpected effects" but hopes to roll it out for 50 percent of the Sam Adams volume by the end of 2011. BBC executives said it is not clear whether the program will lead to any actual savings for the company, but it should lower expenses for distributors.
"We saw it as an opportunity to improve the quality of the Sam Adams that a drinker gets," CEO C. James Koch said during the call. "By taking weeks out of the wholesale inventory, we could give them a better glass of beer. Certainly the foundation we believe for our success has been the quality of our beer and this was an opportunity to strengthen that foundation."
Thursday, November 4, 2010
Will Southwest-AirTran deal lead to higher fares?
Plenty of airline executives have been chirping about Southwest Airlines' pending $1.4 billion purchase of AirTran, and some who don't earn paychecks from Southwest or AirTran have suggested the deal will lead to higher fares.
A Raymond James analyst put the question directly to Southwest CEO Gary Kelly in a conference call Oct. 21, saying the "acquisition was characterized on another call as a high-cost airline purchasing a low-cost airline and that the only way synergies could be delivered would be for fares to go up."
"That was a joke," Kelly scoffed. "It was a joke."
"Our strategy is to keep our fares low, continue to be the low-fare leader in the United States, not nickel and dime our customers," he said. "So it is not our plan to convert ourselves from a low-fare carrier to a high-fare carrier. You won't see that happen."
Another analyst came back to the topic a few minutes later, suggesting legacy carriers prefer to compete against Southwest because it is "relatively rational" in its approach when compared to smaller players such as AirTran.
"I don't know, I hope they get their pick there," Kelly responded. "If we get this deal closed, we can give them what they want, which is more competition."
A Raymond James analyst put the question directly to Southwest CEO Gary Kelly in a conference call Oct. 21, saying the "acquisition was characterized on another call as a high-cost airline purchasing a low-cost airline and that the only way synergies could be delivered would be for fares to go up."
"That was a joke," Kelly scoffed. "It was a joke."
"Our strategy is to keep our fares low, continue to be the low-fare leader in the United States, not nickel and dime our customers," he said. "So it is not our plan to convert ourselves from a low-fare carrier to a high-fare carrier. You won't see that happen."
Another analyst came back to the topic a few minutes later, suggesting legacy carriers prefer to compete against Southwest because it is "relatively rational" in its approach when compared to smaller players such as AirTran.
"I don't know, I hope they get their pick there," Kelly responded. "If we get this deal closed, we can give them what they want, which is more competition."
Wednesday, November 3, 2010
Undercover Boss airtime worth $18 million for Great Wolf Resorts
Great Wolf Resorts Inc. spent about $50,000 on gifts and travel for employees featured on the hit CBS show Undercover Boss, an investment the CEO says was well worth it considering the value of 44 minutes of prime airtime.
CEO Kimberly Schaefer said in an earnings call Nov. 3 that the marketing value to Great Wolf Resorts was about $18 million. More than 13 million people watched the episode in October, the highest so far for the hit series. Millions more could see it again in reruns.
"We think it was a great trade-off to have that opportunity to get that awareness and brand equity," Schaefer said.
CEO Kimberly Schaefer said in an earnings call Nov. 3 that the marketing value to Great Wolf Resorts was about $18 million. More than 13 million people watched the episode in October, the highest so far for the hit series. Millions more could see it again in reruns.
"We think it was a great trade-off to have that opportunity to get that awareness and brand equity," Schaefer said.
Friday, October 29, 2010
Chevron looking for entry point for U.S. shale gas resources
"We’re not opposed to shale because it’s shale gas. What we have been trying to do is have a very cost-effective entry point, and we have not found that to be the case in the U.S. market. That’s not to say that that will never be the case, but we haven’t found it to be the case right now."
- Chevron CFO Patricia Yarrington, in a conference call on Oct. 29.
- Chevron CFO Patricia Yarrington, in a conference call on Oct. 29.
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