Valspar sees dip in third-quarter earnings
Paint and coatings giant Valspar, which sells an exclusive line of interior and exterior paints in Lowe’s stores, saw net earnings drop 23.8 percent from the year-ago quarter, to $47 million from $58.2 million in the same period last year. Sales rose 7.1 percent to $957.7 million from $893.5 million in the prior-year period.
“Results for the quarter were in line with our expectations,” said William Mansfield, Valspar chairman and CEO. “Strong results from our international businesses, new business and pricing helped to partially offset the impact of substantially higher raw material costs and the weak U.S. economy.”
Looking ahead, the company anticipates ongoing pressure on raw material costs and continued weakness in the U.S. economy.
“We remain focused on improving our competitive position,” said Mansfield. “We are moving forward with restructuring actions to further improve the efficiency of our business, implementing additional price increases and continuing to invest in our brands.”
Valspar is based in Minneapolis.
Taylor Do it Centers opens first Express location
Taylor Do it Centers, a chain of nine Do it Best hardware stores in Virginia and North Carolina, has opened its first “Express” location in Virginia Beach, Va.
Aimed at weekend projects and yard maintenance, Taylor “Do it Express” is 4,500 square feet, about one-third the size of the average Taylor Do it Center. The store, which opened July 14, is in a densely populated area with many hi-rise condominiums.
“I saw this as an opportunity to do a smaller, high-margin store with no building materials — just basic hardware and lawn and garden, which are our strengths,” said Joe Taylor, president and CEO of Taylor Do it Centers, in an interview with Home Channel News. “It’s kind of like a 7-11 convenience store.”
Whereas a typical Taylor Do it Center has seven to nine employees on the floor at any given time, the Express format has three or four. And while the larger stores are all at least 3.5 to 4 miles from the closest big box, Express stores can be within a two-mile radius, Taylor said.
“If this is successful, we’ll go back into our region and fill in where we see opportunities in dense, higher-income areas,” he said.
ICSC: July chain store sales rose 2.6 percent
The International Council of Shopping Centers (ICSC) has reported a 2.6 percent gain in chain store sales in July, compared with the prior-year period.
The ICSC noted sales in July were “softer” than the 4.2 percent gain seen in June. The July performance still was in line with a year-to-date average of 2.5 percent year-over-year growth, said Michael Niemira, chief economist and director of research for the ICSC.
“Value and convenience retailers performed better in July than the industry as a whole as sales at discount stores, wholesale clubs and drug stores led the industry,” he said. “Although July captured some early back-to-school shopping, the month was dominated by clearance sales and discounts.”
The group predicted that in August, as demand for back-to-school and fall merchandise kicks in, industry sales will post a 2 percent increase.
Some of the country’s largest retailers reported mixed results in the period. At Wal-Mart, which accounts for the third highest sales volume of home channel merchandise in the country, same-store sales rose 3 percent. That figure was off slightly from Wall Street estimates of 3.4 percent.
Same-store sales at Target fell 1.2 percent in the period, deeper than a forecasted 0.3 percent drop.
Issaquah, Wash.-based Costco Wholesale said July same-store sales increased 10 percent. That figure is higher than Wall Street estimates of a 7.9 percent gain.
In related news, the ICSC released results from a survey indicating consumers plan to start back-to-school shopping earlier this year. About 78.5 percent of respondents surveyed said they expect to complete their back-to-school shopping before the end of August, up from 72.7 percent in 2007 and 69.5 percent in 2006.
Roughly one-third, or 34 percent, of the households surveyed reported having already started their back-to-school shopping, while 7 percent said they were already finished.
The ICSC, through Opinion Research Corp., surveyed 1,012 U.S. households from July 17 through July 20 for the survey.