November 19, 2012, Volume xviii, #44
“All I ask is the chance to prove that money can't make me happy.”
— Spike Milligan (British comedian, actor, and author, 1918-2002)
Home Depot posts positive third-quarter results
ATLANTA — Sales for The Home Depot were up 4.6% to $18.1 billion in its third quarter. Same-store sales were positive 4.2%. Net earnings for the third quarter were $947 million, up from $934 million, reflecting a charge of about $165 million due to its closing of its last seven stores in China.
Sales for the nine months year-to-date were up 3.9% to $56.1 billion, while net earnings for the period reached $3.5 billion, up 13.0%.
Based on its third-quarter performance, the company has updated its fiscal 2012 guidance and expects sales to be up approximately 5.2% for the year. Home Depot has been buying back shares and intends to repurchase an additional $700 million in shares in the fourth quarter. This will bring the total dollar amount of shares repurchased to $4 billion for the year.
At the end of the third quarter, Home Depot operated 2,250 retail stores in the U.S., Canada, and Mexico.
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Activist shareholder wants RONA board ousted
MONTREAL — RONA inc. is facing a coup from its second-largest shareholder, which is calling for a brand new slate of directors to replace the company’s current board after disappointing third-quarter results precipitated the departure of long-time CEO Robert Dutton. Invesco, a Toronto investment firm, welcomed Dutton’s ouster but wants to take the transition further in a shareholders’ meeting.
RONA’s board of directors announced the date for its May annual general meeting six months out, as a response to Invesco’s intention to seek a new board. Since directors will face re-election at the AGM, the move by law precludes any second meeting for the same purpose, according to RONA.
Despite the manoeuvring by RONA, this issue continues to pit the company’s ambitions as a public company against its popularity with its merchants, who remain generally favourable to Dutton’s leadership and supportive of the existing board. Invesco is still outflanked in shares by Caisse de depot, Quebec’s public pension group, which has around 15% of the company’s stake, while member merchants more or less match Invesco for shares at just over 10%.
The dark horse for now is the Caisse, which remains as guarded about its options as it did during the Lowe’s takeover bid. Invesco will have to submit any proposal for a new slate before notice of the next AGM is given in March.
(What’s the real reason Robert Dutton left RONA? Check out Hardlines TV for Michael’s take on this!)
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Chalifour beefs up operations, expands LBM
LONDON, ON ― Chalifour Canada continues to build its teams both here and in other locations. A number of recruitment ads have appeared in recent weeks for everyone from buyers to IT people. A web developer and a logistics co-ordinator were recently sought to beef up the hardware distributor’s London head office. That role rounds out a search back in the summer for an operations manager in-house.
Both the London head office and the Surrey, BC, location of Chalifour Vancouver (formerly IRLY Distributors) were recently looking for a territory manager to maintain sales levels with existing customers and prospect for business with new dealers. (The latter position replaces Shannon Cupskey, who is relocating with TIM-BR MARTS at the end of this year to Southwestern Ontario.)
Much of the hiring activity comes from the fact that Chalifour moved its category management office from Montreal to London last spring, combining it with the full category management team there. “The category management team can now effectively work with sales, inventory planning, operations and merchandising at the London facility,” says Tim Urquhart, president and CEO of TIM-BR MARTS Ltd., which owns Chalifour Canada.
Chalifour appears to be expanding its LBM reach, as well. It just closed applications for commodity traders in Surrey, London, and in its Dartmouth, NS, office. It is also adding building materials to the London facility. London had historically supplied the Maritime and Newfoundland markets, but those are now being supplied out of Victoriaville, QC. The addition of select building materials in London is seen as a way for that DC to make up for the volumes turned over to the Victoriaville warehouse.
“Chalifour has seen strong growth in 2012 and with that growth comes the need to augment our team,” says Urquhart. “In expanding our team, we ensure that our growth does not lead to a deterioration of service to our customers.”
He adds many team members have multiple roles. “Our sales team, for instance, is not only responsible for managing customer relationships and sales through TIM-BR MART and Chalifour Canada, but they are also charged with promoting marketing programs to support our banners.”
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Sears cuts loss in third quarter despite revenue drop
TORONTO — Despite a drop in sales, Sears Canada Inc. did manage to cut its loss in half for the first three quarters of 2012. The mass merchant reported total revenues for the third quarter of $1.04 billion, down 6.8% from $1.11 billion a year earlier.
Same-store sales dropped by 5.7%. But it did manage to cut its net loss for the quarter in half, to $21.9 million, compared with a net loss of $44.1 million in 3Q 2011. Included in the net loss for the quarter last year is a $45.6 million pre-tax charge relating to the disposition of excess inventory and internal restructuring costs.
Total revenues for the 39-week year-to-date were $3.00 billion, down 7.7% from $3.25 billion. Same-store sales decreased by 6.4%. Net earnings for the nine months reached $61.3 million, a turnaround from a net loss of $91.3 million.
“Our decrease in revenue was primarily due to a significant reduction in promotional and clearance sales in apparel, declines in pre-season sales of snow blowers, and the planned exiting of certain product lines and reduced sales of televisions in electronics,” said Calvin McDonald, president and CEO of Sears Canada. The company did well, however, in baby clothing and accessories, and back-to-school.
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Quebecers plan to spend a little more for Christmas
MONTREAL — Quebecers plan to spend an average of $676 per household for the 2012 holiday season. Moreover, 80% of Quebecers who plan to make holiday purchases intend to spend as much as last year, if not more.
These are some of the findings of a survey on Quebecers’ buying behaviours for the 2012 holiday season, conducted by the Altus Group for the Retail Council of Quebec.
Excluding the automotive sector, the association estimates that Quebec consumers’ holiday spending will total $2.34 billion, up 1.7% from last year.
The survey indicated some improved consumer confidence. For example, 66% of Quebecers believe that the current economic situation will have little or no influence on their holiday buying intentions; this represents an increase of 7% compared with 2011 and a return to the 2010 level. And 27% of Quebecers planning to make holiday purchases have already started their shopping in October or earlier, vs. just 22% in 2011.
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