By Lisa Johnston
New products on display at the American International Toy Fair, held in N
WILKESBORO, N.C. — Home improvement retailer Lowe's boosted net earnings 20.4 percent in the fiscal first quarter ended May 4 to $225.3 million, compared with $187.1 million in the year-ago three months. Sales in the first quarter climbed 18.1 percent to $5.3 billion, compared with $4.5 billion in the same period last year. Comp-store sales dropped 3 percent in the quarter. Looking ahead to the fiscal second quarter, Lowe's expects about a 15 percent increase in sales, compared with the same period last year, along with "flattish" comp-store sales. The retailer expects to open 20 to 25 stores in the second quarter, compared with 37 new units opened in the first three months. For the fiscal year, Lowe's expects its sales will increase by about 17 percent or 18 percent, compared with the previous year, and comp-store sales about 2 percent. The company anticipates opening 115 stores in fiscal 2001.
MINNEAPOLIS — Revenues at locations that make up the Target segment of Target Corp. climbed 10.7 percent during the fiscal first quarter ended May 5, reaching $6.8 billion, compared with $6.1 billion in the year-ago three months. Comp-store sales at Target units increased 2.8 percent during the three months. Pretax profit increased 7.7 percent at the Target segment, to $502 million, up from $467 million in the same quarter in 2000. Total Target Corp. revenue in the first three months rose 7.7 percent to $8.3 billion, compared with $7.7 billion in the year-ago three months. Overall pretax profit increased 5.9 percent to $573 million, compared with $542 million the previous year. In the first quarter, gross margin rate decreased from the prior year, principally due to the mix impact of growth at Target, the retailer's lowest gross margin-rate division.
ISSAQUAH, WASH. — Citing higher energy costs and store-opening expenses for lower earnings during the fiscal third quarter ended May 13, Costco Wholesale reported a 12 percent decrease for the three months, hitting $105.3 million, compared with $120.3 million in the year-ago third quarter. Net sales for the period, however, climbed 12 percent to $7.56 billion, up from $6.77 billion in the year-ago three months. Comp-store sales increased 5 percent. With about 30 percent of its 259 U.S. stores located in California, Costco is more vulnerable to energy price spikes. Store pre-opening expenses nearly doubled in the quarter, to $12.8 million, up from $6.7 million. Net sales for the nine months jumped 10 percent to $23.22 billion, up from $21.21 billion in the same period last year. Comp-store sales increased 4 percent in the nine months. Net income for the nine months dipped 5 percent to $411.4 million, compared with $431.3 million in the year-ago period. Costco plans to open five additional new warehouses prior to the end of the fiscal year on Sept. 2, and an additional 26 to 28 new warehouses, including four to five relocations, before the end of the calendar year.
NATICK, MASS. — Warehouse club operator BJ's Wholesale Club reported a 26.9 percent increase in net income for its fiscal first quarter ended May 5, reaching $23 million, compared with the $18.1 million recorded in the year-ago three months. Net sales for the first quarter climbed 11.1 percent to $1.13 billion, up from $1.02 billion in the same three months last year. BJ's also said it repurchased $15.7 million worth of company stock during the first quarter.
INDIANAPOLIS — Wireless services provider Brightpoint expects a loss in its second quarter, rather than the profit expected by Wall Street. The company blames weak market conditions for sending revenues down, namely lower-than-anticipated demand for the products and services that drive its profitability. Brightpoint said revenues for the second quarter should range from $450 million to $470 million. The company's loss should range from 12 cents to 14 cents per diluted share, compared with analysts' estimates of a gain of 6 cents. Included in this quarter's expected loss is about 14 cents to 16 cents per diluted share related to the write-down of inventories to their estimated net realizable value based on current market conditions.
HONG KONG — Handheld games developer Radica Games' loss increased during the first quarter to $3.7 million, up from $2.2 million in the year-ago three months. Sales for the first quarter ended March 31 dropped 32 percent, to $11.8 million, down from $17.3 million in the same period last year. "In spite of difficult market conditions, our operating results for the quarter were consistent with the range of expectations we announced at the beginning of the year for the first half," said Pat Feely, CEO. "While sales movement at retail of Radica's products met or exceeded our expectations, retailers have been replacing stocks at a significantly reduced rate from prior years." The company reported that gross margin for the quarter was 26.7 percent, 80 basis points lower than the 27.5 percent registered in the same quarter last year. Lower margin was due to a shift in product mix leading to a higher percentage of controller sales vs. fewer sales of higher margin handheld games.
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.