PPG posts third-quarter gains
Natural disasters affected PPG’s third quarter performance, both emotionally and operationally, says CEO Michael McGarry. Still, the company saw gains in third-quarter sales and income from continuing operations.
The company reported net sales of $3.8 billion, up 3.2% from the same quarter last year. Third quarter net income from continuing operations was $392 million, swinging from a loss of $211 million in the third quarter of 2016.
“While the third quarter was challenging emotionally and operationally due to the natural disasters, we achieved solid overall financial results and, more importantly, made some progress in our initial operating margin recovery efforts,” said McGarry. “Additionally, we were tracking toward volume growth of about 1.5 percent prior to the disasters, which was an improvement versus our sales volume growth for the first half of the year.
Architectural coatings – Americas and Asia Pacific sales volumes were flat year-over-year with differences by channel and region. U.S. and Canada company-owned architectural stores grew sales volumes by a mid-single-digit percentage year-over year including the unfavorable impact from the hurricanes. This increase in sales was more than offset by lower sales volumes in national retail (DIY) accounts and independent dealer networks as both of these distribution channels continue to experience soft demand.
The company sold its glass business in the third quarter a “transformational milestone for the company, he said.
“Looking ahead to the fourth quarter, we expect moderate global economic growth to continue. Given the after-effects from the natural disasters, we no longer expect any notable decline in the level of raw material cost inflation for the remainder of this year,” McGarry said.
Year-to-date, PPG has completed business acquisitions totaling more than $300 million, including The Crown Group which was finalized on Oct. 2.
Eye on Retail: Walmart’s virtual reality vision
Virtual reality was the star of Walmart’s Store No. 8 inaugural innovation gala — an event that exhibited how the technology will shape retail shopping.
Store No. 8, Walmart’s technology incubator focused on ideas that will transform the future of commerce, held its first innovation gala on Wednesday. Store No. 8 works with startups that specialize in areas that include robotics, virtual and augmented reality, machine learning and artificial intelligence. However, this event put the spotlight on the value of VR.
The gala, which took place at a private residence in Hollywood Hills, Calif., invited top brands, technology companies and venture capitalists to see how VR will impact how customers shop in the future. Each exhibit encompassed Store No. 8, Thrive Global and Accenture’s vision for the future of VR.
The concepts came from five early-stage VR developers that Store No. 8 chose from an open call it hosted over the summer. These winners received funding to develop a proof of concept for an immersive retail experience. Guided by executives from Store No. 8, and brands like Modcloth, Bonobos and Rebecca Minkoff, their ideas were brought to life at the gala.
“Innov8 is our opportunity to support and elevate the incredible pioneers of virtual reality who share our mission to explore nascent innovations that will emerge not in coming years but over the next decade,” said Katie Finnegan, principal of Store No 8. “During this process, our five Innov8ers have uncovered radical new technologies, approaches and applications across the virtual retail experience, that we know will play a major role in driving commerce forward at a time when technology influences all aspects of consumers’ lives.”
Among the winners highlighted at the event were a 3-D image solution from 8i that enables customers to interact with a Bonobos Guide, select virtual shirts from a rack and understand fit on a hologram model. A 3-D image solution from Fyusion created curated Modcloth products in a manner that gives shoppers more insight into merchandise before they make a purchase. A company called Obsess recreated a virtual Rebecca Minkoff store.
Innov8’s board of judges included Arianna Huffington, founder and CEO of Thrive Global; Marc Carrel-Billiard, senior managing director of Accenture Labs; Jason Welsh, managing director of Accenture Interactive; Kirsten Green, general partner of Forerunner Ventures; Tipatat Chennavasin, general partner of the Virtual Reality Fund; Jeremy Welt, president of Invisible Robot Corp.; Store No 8’s Finnegan; and Marc Lore, president and CEO of Walmart U.S. eCommerce and founder of Jet.com.
The event was sponsored by key brands and organizations in the technology and retail industries, including HP, Silicon Valley Bank and Microsoft.
To read more details about the highlighted VR innovations, click here.
Poll Results: touched by disaster impact
A minority of respondents to a recent HBSDealer poll question report they their business was completely unscathed by recent natural disasters. The rest were either hit, their communities were hit, or they know someone who was hit.
The recent weeks have seen devastating natural disasters in the form of hurricanes Havey, Irma and Maria, in the South and deadly wildfires in the West.
We asked: “Fires, floods, hurricanes: How has your business been affected by recent natural disasters.” Here are the results:
• 34% — “Completely unscathed.”
• 32% — “Unscathed. But we know others who suffered losses.”
• 21% — “Indirect hit. Our facilities were OK, but our community was hit.”
• 13% — “Direct hit. Our facilities were damaged.”
The total vote count for the poll was 38. Readers can continue to take the poll here.
Also, tell us about your businesses disaster experience here.