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Safeway Announces Sales Increase in First-Quarter 2008
Safeway reported net income of $193.4 million for the first
quarter of 2008 compared to net income of $174.4 million in
the first quarter of 2007.
Total sales increased 7.3% to $10.0 billion in the first
quarter of 2008 compared to $9.3 billion in the first quarter
of 2007. Contributions from Lifestyle stores, an increase
in the Canadian dollar exchange rate and higher fuel sales
drove this increase. Identical-store sales increased 4.5%
in the first quarter of 2008. Excluding fuel, identical-store
sales increased 2.9%. Easter holiday sales occurred in the
first quarter of this year compared to the second quarter
of last year. When adjusted for the estimated impact of the
Easter holiday shift, non-fuel, identical-store sales increased
2.0%.
“We are pleased with our earnings performance in the
first quarter of 2008,” said Steve Burd, Chairman, President
and CEO. “Our earnings per share grew by 13% compared
to the first quarter of 2007. Part of this growth was due
to the shift in the Easter holiday. In addition, our efforts
to reduce and control costs contributed to operating margin
improvement. At the same time, we invested in lower prices
to improve our competitiveness and enhance our consumer offering.
We remain confident in our ability to deliver earnings per
share growth in the 13-18% range for this 53-week year.”
Gross Profit
Gross profit declined 50 basis points to 28.79% of sales in
the first quarter of 2008 compared to 29.29% of sales in the
first quarter of 2007. Higher fuel sales (which have a lower
gross margin) reduced gross profit by 38 basis points. The
remaining 12 basis- point decline is the result of investments
in price, partly offset by improved shrink and lower advertising
expense.
Operating and Administrative Expense
Operating and administrative expense improved 65 basis points
to 24.77% of sales in the first quarter of 2008 from 25.42%
of sales in the first quarter of 2007. Higher fuel sales in
2008 reduced operating and administrative expense by 29 basis
points. The remaining 36 basis point decline was the result
of reduced employee costs, partly offset by a labor settlement
in Alberta, Canada, and higher utility and occupancy costs.
Interest Expense
Interest expense declined slightly to $84.5 million in the
first quarter of 2008 from $89.6 million in the first quarter
of 2007 due to a combination of lower interest rates and lower
average borrowings.
Other (Loss) Income, Net
Other income declined to a loss of $0.4 million in the first
quarter of 2008 from $6.8 million income in the first quarter
of 2007 due primarily to lower results at Casa Ley, Safeway’s
unconsolidated affiliate.
Income Tax Expense
Income tax expense was $123.6 million, or 39.0% of pre-tax
income in the first quarter of 2008. Income tax expense in
the first quarter of 2007 was $103.8 million, or 37.3% of
pre-tax income.
Stock Repurchases
During the first quarter of 2008, Safeway purchased 2.5 million
shares of its common stock at an average price of $29.70 per
share and a total cost of $74.1 million (including commissions).
The remaining board authorization for stock repurchases at
quarter-end was $447.0 million.
Capital Expenditures
Safeway invested $373.1 million in capital expenditures in
the first quarter of 2008. The company opened one new Lifestyle
store, completed 22 Lifestyle remodels and closed four stores.
For the year, the company expects to spend $1.70 to $1.75
billion in capital expenditures, open 20 to 25 new Lifestyle
stores and complete 250 to 255 Lifestyle remodels.
Cash Flow
Net cash flow used by operating activities was $41.2 million
in the first quarter of 2008 compared to net cash flow from
operating activities of $19.1 million in the first quarter
of 2007.
Net cash flow used by investing activities was $370.7 million
in the first quarter of 2008 compared to $391.7 million in
the first quarter of 2007.
Net cash flow provided by financing activities was $352.9
million in the first quarter of 2008 compared to $305.7 million
in the first quarter of 2007 primarily due to increased borrowings,
partly offset by stock repurchases.
ARTS Announces International XML Standard
Retailer costs associated with calculation, collection, reporting
and remission of local and national transaction taxes are
estimated at several billion dollars annually and multinational
retailers face staggering complexity at the point of sale.
The Association for Retail Technology Standards, a division
of the National Retail Federation, is helping retailers navigate
these challenges with the new Transaction Tax Schema.
ARTS today announced the release of this new standard that
will link information from transaction tax providers to a
retailer’s POS system. The benefits will be harmonization
of the download and publication of transaction tax rules to
a retailer’s POS and/or tax calculation systems, improved
accuracy of tax liability calculations and streamlined communication
between the POS and tax calculation systems.
“This standard will help retailers by reducing the cost
and difficulty associated with tax management,” said
Richard Mader, Executive Director of ARTS. “We specifically
targeted this work to greatly or even eliminate the effort
associated with sales tax audits and we strongly believe the
work team succeeded.”
The new standard was developed by a diverse ARTS work team
which included retailers such as BJ’s Wholesale Club,
El Cortes Inglés and Reebok, and suppliers such as
ADP Taxware, ARS eCommerce, Clicks & Mortar, Micros Retail,
NSB, Oracle, Retail Anywhere and Vertex.
“Retailers have long been challenged with meeting the
requirements of national, state and local tax authorities,”
said Scott Gamel, chair of the Transaction Tax work team and
Sr. Associate, Tax Compliance at ADP Taxware. “An ARTS
standard that connects retailers’ POS and ERP systems
to transaction tax software through XML messaging will go
a long way toward making their lives easier.”
ARTS Board Member and work team contributor Perry Kramer,
VP, Sales Operations, Corporate and Logistics Solutions at
BJ’s Wholesale Club, agreed. “Multiple compliance
burdens, placed upon large transaction tax remitters like
retailers, will be simplified by this robust standard,”
he said. “Additionally, the standard will dramatically
enhance retailers’ ability to quickly and accurately
react to the ever-changing complexity of overlapping tax jurisdictions
and of cross jurisdictional sale and return transactions.”
The standard is specified in XML, the data language of the
internet. Anyone involved in the retail business that operates
in multiple tax jurisdictions will benefit from this specification.
Transaction Tax offers seamless integration with other ARTS
standards such as POSlog and Price and as well as other global
standards such as GS1.
The Association for Retail Technology Standards is an international
membership organization dedicated to reducing the costs of
technology through standards. Since 1993, ARTS has been delivering
application standards exclusively to the retail industry.
ARTS has four standards: The Standard Relational Data Model,
UnifiedPOS, ARTS XML and Standard Requests for Proposal. Membership
is open to all members of the international technology community-
retailers from all industry segments, application developers
and hardware companies. www.nrf-arts.org.
The National Retail Federation is the world's largest retail
trade association, with membership that comprises all retail
formats and channels of distribution including department,
specialty, discount, catalog, Internet, independent stores,
chain restaurants, drug stores and grocery stores as well
as the industry's key trading partners of retail goods and
services. NRF represents an industry with more than 1.6 million
U.S. retail companies, more than 25 million employees - about
one in five American workers - and 2007 sales of $4.5 trillion.
As the industry umbrella group, NRF also represents over 100
state, national and international retail associations. www.nrf.com
Superdrug Streamlines Planning Operations and Optimize
Profitability with JDA Software
Superdrug, a U.K. beauty and health retailer, selects several
of JDA Software's Space and Category Management solutions,
powered by Intactix, to optimize item assortment and store
planning decision-making throughout the retailer's 913 stores.
Superdrug opted to replace its existing space planning technology.
The retailer selected JDA's Space and Category Management
solutions. Superdrug also implemented JDA's Efficient Item
Assortment, Space Planning, Floor Planning and Intactix Knowledge
Base solutions to support its strategic business objectives
as the company opens additional stores throughout the U.K.
Superdrug recently licensed JDA's Space and Category Management
solutions and expects implementation to be complete in six
months. In addition to supporting its strategic expansion
plans, Superdrug anticipates additional benefits upon deployment,
including:
-Increase in overall efficiency due to reduction in manual
data processing and redeployment of resources to value-added
sales growth activities
-Increase in company sales through improved category management
and space utilization
-Increase in sales through speed to market via support for
new brand launches, new store openings and store remodels
-Reduction in inventory costs through targeted item assortment
that adjusts to local demand
All Aboard Toys and Ty's Toy Box Merge
Ty's Toy Box and All Aboard Toys announce that the two companies
will merge, creating a large independent toy destination for
licensed character merchandise available online.
AllAboardToys.com and TysToyBox.com are responsible for launching
entertainment brands and classic characters online via their
toy and merchandise stores. Combined, the companies work with
over 400 suppliers and more than 25 licensors and licensing
agents, selling over 10,000 unique products consisting of
children's licensed branded toys and toy-related products
that include apparel, school supplies, home decor, DVDs, costumes,
party supplies and video games.
The companies plan to continue to operate AllAboardToys.com
and TysToyBox.com independently, maintaining their business
operations while growing and expanding the combined entity.
Colorado-based AllAboardToys.com and Northern Kentucky-based
TysToyBox.com have been two of the fastest growing character
based independent online toy stores over the past five years
and the companies' operations will continue at their current
locations.
Metro Group Grows Its Platform for Strategic Reporting
and Data Analysis
Metro Group continues to expand its Teradata platform to
generate analytical business intelligence. The system continuously
captures and integrates detailed data from a growing number
of business programs and subsidiaries across Europe, Asia
and Africa. The system includes software and hardware and
is supported by Teradata professional services.
For more than a decade, the Teradata platform has supported
Metro's thought leadership in managing and leveraging complex
information for deep business visibility and enterprise-class
insight. Metro relies on it to collect and analyze a wide
variety of detailed data to create powerful intelligence for
decision support as well as financial reporting and customer
management.
"Our international data warehouse, built on the Teradata
platform, is an integral part of our corporate strategy to
generate more value with targeted customer relationship management
and category management in Europe and beyond," said Heinz-Josef
Boeck, CEO of Metro Group Information Technology GmbH. "As
our international data warehouse has been growing country
by country, Teradata's highly scalable technology has proven
to be of great business value, providing high performance
under very demanding business circumstances. Teradata reliably
handles growing data volumes while supporting mixed workloads
and many concurrent users."
Presently, the international data warehouse integrates data
from Metro's subsidiaries in 30 countries across Europe.
Teradata recently enhanced its customer management portfolio,
adding new features and capabilities. These new features include
complex offer optimization; extended access to marketing automation;
simplified data import capabilities; improved reusability
of campaign components and expanded Web compatibility. These
new capabilities leverage Teradata's global leadership in
advanced, data warehouse-driven customer management and deep
expertise in marketing automation.
Lord & Taylor Selects E-Commerce Platform to Drive
New Online Channel
Lord & Taylor selects iCongo's powerful e-commerce platform
to drive the company's new online storefront and Internet
marketing systems.
Lord & Taylor will re-launch their Internet storefront
using the full e-commerce suite offered by iCongo. iCongo's
e-commerce platform provides a comprehensive set of capabilities
enabling retailers to operate a full featured online retail
storefront. This includes streamlined order management and
shipments, extensive content management capabilities, as well
as sophisticated personalization and marketing tools.
iCongo's e-commerce solution will allow Lord & Taylor
to enhance their merchandising capabilities, improve inventory
and order tracking as well as enhance their customer's overall
online shopping experience. Through the use of iCongo's advanced
personalization tools, Lord & Taylor will deliver a sophisticated
personalized customer experience. iCongo's easy-to-use marketing
systems will also allow Lord & Taylor to simplify content
creation enabling quick site updates and notifications to
their large customer base.
By streamlining operations through iCongo's e-commerce system,
Lord & Taylor can efficiently scale their business as
the company increases its integrated marketing campaigns and
focuses on strategically increasing online sales revenue.
"In searching for a new e-commerce solution partner,
we looked for a proven, mature system that will enable us
to effectively display our fashions, enhance both our customer's
shopping experience and our overall customer service,"said
Mark Weikel, Chief Operating Officer of Lord & Taylor.
"iCongo's proven comprehensive e-commerce solution will
allow Lord & Taylor to achieve our e-commerce objectives."
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