LL Bean Sales Rise After Two Year Slump
Freeport, ME—After two years of sales declines, LL Bean reported Monday that its sales grew nearly 6% increase in 2010.
The company reported annual net sales of $1.44 billion for the fiscal year that ended Feb. 27, a 5.7% jump over the $1.37 billion recorded in 2009.
Noting the reverse from a nearly 6% drop in sales from 2008 to 2009, Chris McCormick, LLBean’s president/ceo said, “The initiatives we put in place and the significant investments we made in our business have paid off, even in the midst of a slow economic recovery.” As a result, the company gave 5% bonuses to its 5,000 year-round employees, spokeswoman Carolyn Beem told The Associated Press.
While revenues have yet to rebound to pre-recession levels, the company reported strong growth in online sales, which outpaced catalog sales for the first time in 2009, and increased 29% in 2010.
McCormick added: “We will have future announcements of new store openings, and significant new marketing initiatives. We’re looking forward to another successful year leading into 2012, which marks the 100th anniversary of the founding of our company in 1912 in Freeport, Maine.” As a privately held company, LL Bean does not publicly disclose its full financials.
Frederick’s Narrows Q2 Net Loss Despite Sales Dip
Los Angeles–Frederick’s of Hollywood Group reported Monday a decline in its second quarter sales, after late deliveries affected inventory levels.
Net loss for the quarter ended Jan. 29 was $3.3 million, or 8 cents a share, down from a $4.9 million loss, 18 cents a share, a year ago. Net sales in the second quarter also fell 11.3% to $32.6 million compared with $36.7 million a year ago. Comparable store sales fell 16.5%. The company’s direct sales division posted an increase of 2.2%.
Commenting on the loss, Thomas Lynch, chairman and chief executive officer, said: “Although we are disappointed with our lower retail store sales, we continue to make significant progress in improving our overall retail business. We primarily attribute these lower sales to late deliveries of merchandise, which resulted from credit limits imposed by certain of our vendors prior to the sale of our wholesale division. These late deliveries, coupled with our conservative expectations for the holiday season, resulted in lower than optimal inventory levels.”
Lynch said that since the company’s finances had improved following the sale of the wholesale division, “our vendors have increased the credit limits that they offer us, which we believe will result in timely product deliveries going forward.”
Middle East Expansion
In other news, Frederick’s announced today that it has entered into an exclusive multi-year licensing agreement with Abu Dhabi-based Emirates Associated Business Group (EABG) to build and operate Frederick’s of Hollywood retail stores in the Middle East.
The agreement provides for EABG to open at least 10 Frederick’s of Hollywood retail stores in six Middle Eastern countries over the next three years, with additional store openings based on a mutually agreed upon expansion plan. In addition, a flagship store in Abu Dhabi is scheduled to open in April 2011.
Family Dollar Lifts Q2 Earnings Outlook
Matthews, NC–Family Dollar Stores has lifted its earnings outlook for the second quarter after sales increased by 8.3% during the period.
The company said Monday that sales for the three months ended Feb. 26 increased to $2.26 billion, up from $2.09 billion last year. The discount dollar chain also booked a 5.1% jump in same store sales generated at stores open at least a year or more. Year-to-date same-store sales were up 6%, the group added.
“Family Dollar continues to execute well against our strategic plan to accelerate revenue growth, expand operating margins and optimize our capital structure,” said Howard Levine, chairman and ceo. “Our investments to improve the shopping experience for our customers while enhancing our operational capabilities continue to deliver strong returns.”
Trian Criticizes Dollar General’s Board for “Poor Corporate Governance”
The company said that it now expects second-quarter EPS to fall in a range of 97 to 98 cents, up from 81 cents per diluted share for the second quarter of fiscal 2010 and ahead of its previous guidance range of 92 to 97 cents. Analysts’ average estimates forecast 95 cents a share in profit.
Meanwhile, following Family Dollar’s recent rejection of a $7.8 billion takeover approach from billionaire Nelson Pelz’ hedge fund Trian Group, Edward Garden, Trian’s chief investment officer, fired off a letter Monday afternoon to Family Dollar’s board that criticized Family Dollar’s poison pill defense against the takeover bid and accuses the board of “poor corporate governance.”
The board had argued that Trian’s offer undervalued Family Dollar and adopted a new shareholder policy–its “poison pill” that would flood the market with shares if any one investor’s stake reaches greater than 10%. Trian holds an almost 8% stake in Family Dollar.
Trian also reiterated its interest in Family dollar and claims it has been working with financial institutions that are willing to organize $5 billion in debt financing for a deal that would total in the range of $7 billion to $8 billion, the remainder in cash.
Family Dollar said last Friday it was laying off more than 100 workers, with all of its corporate divisions suffering losses. It has about 30,000 full-time employees and 20,000 part-time workers in its 6,888 stores.
DSW Lifts Outlook as 2010 Profit Doubles
Columbus,OH–DSW Inc. has raised its earnings outlook for the year ahead after booking a 38% jump in fourth quarter profit on higher sales of footwear and handbags.
Net income for the three months ending Jan. 29 rose to $18.5 million or $0.41 a share, up from $13.4 million or $0.30 a share last year. Net sales surged 16.4% to $468.5 million, from $402.6 a year ago. Same store sales rose 14.9% vs. the 12.9% a year ago.
While the quarterly earnings fell short of analysts’ average estimate of 44 cents,DSW saw its sales lift higher than analysts’ forecast of $445 million.
For the year, net income nearly doubled to $107.6 million or $2.40 per share, up from $54.7 million or $1.23 per share the year before. Total sales were up 13.7% to $1.82 billion and same store sales climbed 13.2%.
Looking ahead, the company sees earnings per share in the range of $2.60 to $2.75, on a 3% to 5% rise in comparable store sales.
DSW, which operates 312 stores, is in the process of buying its largest shareholder, Retail Ventures Inc, in a tax-free stock swop.