Tough First Quarter 2017 Results Prompts HBC To Take Steps To Adapt

  • First Quarter retail sales decreased 3.0% to $3.2 billion, a decrease of 2.9% on a constant currency comparable basis
  • First Quarter comparable digital sales increased 5.4% on a constant currency basis, increasing 13.2% at HBC’s department store banners
  • First Quarter Adjusted EBITDAR of $168 million; Net Loss of $221 million
  • HBC launches Transformation Plan designed to get ahead of industry developments; expected to generate total annual savings of more than $350 million
  • Sets quarterly dividend at $0.0125 per share

TORONTO & NEW YORK & COLOGNE, Germany, 2017-Jun-12 — /EPR Retail News/ — HBC or the “Company” (TSX: HBC) today (June 8, 2017) announced its first quarter financial results for the thirteen week period ended April 29, 2017, and also launched its Transformation Plan, currently expected to generate total annual savings of more than $350 million. Unless otherwise indicated, all amounts are expressed in Canadian dollars. Certain metrics, including those expressed on an adjusted, normalized, comparable and/or constant currency basis, are non-IFRS financial measures. For more information please refer to the “Supplemental Information” section of this press release and the reconciliation tables further below.

“This was a tough quarter for HBC. While the retail apparel market remains particularly challenging, we are taking steps to adapt, beginning with our Transformation Plan announced today. This initiative will reshape our organization to accelerate delivery of a best-in-class all-channel experience to our customers while improving our cost structure. The Transformation Plan makes us more agile and better able to respond to evolving customer preferences and a rapidly changing retail landscape. We strongly believe that our model of combining world class real estate assets, which are less impacted by short-term trends, with our diverse retail businesses provides long-term value for the Company and our shareholders,” stated Richard Baker, HBC’s Governor and Executive Chairman.

Jerry Storch, HBC’s Chief Executive Officer, added, “We know we can do better and we are taking bold decisive action. Rather than chase the rapid industry changes, our Transformation Plan will reposition HBC to get ahead and stay ahead. This North American based initiative, the result of a process we began more than six months ago, is designed to increase synergies across our portfolio of businesses, sharpen capabilities that give the Company a competitive edge and re-align our expenses to focus on growing our digital business. Savings from the changes we have announced today are required to help mitigate the pressures we are facing in the current environment. As we have developed our plan, we have been determined to become not just a leaner Company but also a better one. These changes include significant improvements to our organizational structure, store operations and procurement strategy, all of which better reflect the Company’s efforts to drive the business forward and deliver a best-in-class all-channel experience. Combined with our prudent management of capital expenditures, we believe that this improved structure will better position HBC for the future.”

Update on Operational Review:

As announced today in a separate press release, HBC has largely completed the comprehensive review of its North American business operations started in late 2016. As part of this review, the Company is implementing changes to drive its business forward and improve the Company’s all-channel business model. This Transformation Plan will increase operational synergies, sharpen capabilities and reduce expenses. Including the $75 million in savings announced in February, annual savings from this Transformation Plan are currently expected to total more than $350 million by the end of Fiscal 2018, with approximately $170 million anticipated to be realized during this fiscal year. Of this $170 million, the actions necessary to secure $125 million are complete as of today. As part of this initiative, the Company will reduce total headcount by approximately 2,000 positions, including those previously announced in February. These savings are required to help offset revenue, margin and cost pressures the Company is facing in the current retail environment. In addition to the severance charges incurred as part of the Company’s actions in February, HBC’s expects one-time charges related to this initiative of approximately $95 million over the next 12 months.

Key Actions of HBC’s Transformation Plan

  • Creating two distinct leadership teams, one focused on Hudson’s Bay and one dedicated to Lord & Taylor, to drive market-specific strategies. The Hudson’s Bay leadership team will focus on accelerating plans to build upon its successful transformation in Canada, while the Lord & Taylor leadership team will focus on increasing the pace of change at that U.S. banner, with an emphasis on driving digital opportunities while operating its stores more efficiently.
  • Integrating digital functions throughout the organization to develop and maximize the impact of all-channel solutions for marketing, operations and technology in order to deliver the most seamless in-store and online experience for HBC’s customers.
  • Realigning resources including IT and Digital, Store Operations & Visual Merchandising, Buying & Planning and Marketing to increase efficiencies and leverage scale, with world-class centers of excellence that support banners while preserving differentiation among the businesses.
  • Optimizing in-store service and enhancing sales training for store associates to better serve HBC’s customers.
  • Reducing our employee base by approximately 2,000 positions, including those previously announced in February, which will flatten the organization by removing layers to make HBC more nimble and streamline the decision making process.
  • Fully leveraging the size and scale of the Company to optimize procurement and generate additional savings.

First Quarter Summary

All comparative figures below are for the thirteen week period ended April 29, 2017 compared to the thirteen week period ended April 30, 2016. DSG refers, collectively, to the Lord & Taylor, Hudson’s Bay and Home Outfitters banners. HBC Europe refers, collectively, to the GALERIA Kaufhof, Galeria INNO and Sportarena banners. HBC Off Price refers, collectively, to the Saks Fifth Avenue OFF 5TH (“Saks OFF 5TH”) and Gilt banners.

Retail sales were $3,203 million, a decrease of $100 million, or 3.0%, from the prior year. The decrease is related primarily to lower overall comparable sales of approximately $94 million. The remainder of the decrease was driven by a negative $31 million foreign exchange impact on the translation of U.S. dollar and Euro denominated sales and a $25 million impact from store closures, partially offset by the opening of four new Saks Fifth Avenue stores and 25 new Saks OFF 5TH stores during the last year, which contributed approximately $50 million in sales.

On a constant currency basis, comparable sales held flat at HBC Europe and declined by 2.4% at DSG, 4.8% at Saks Fifth Avenue and 6.8% at HBC Off Price, resulting in an overall consolidated comparable sales decline of 2.9%. Comparable sales during the quarter were impacted by lower traffic across HBC’s banners, as well as a highly promotional retail environment.

While HBC Europe experienced lower overall traffic, this was offset by an increase in both conversion rate and average basket size as HBC Europe continued to fine tune its marketing activities and introduce new brands. Looking ahead, creative marketing campaigns combined with the roll-out of new “store within store” concepts and further introduction of new brands are expected to drive sales in Europe through the back half of the fiscal year. Additionally, HBC Europe is introducing the Company’s Saks OFF 5TH banner in Germany, with an opportunity for up to 40 stores. The first store opened today in Düsseldorf to large crowds, and the Company has announced the location of four other stores expected to open later this year. In the Netherlands, HBC Europe will be opening the first Hudson’s Bay stores later this summer and expects to open a total of ten stores during Fiscal 2017.

Although overall comparable sales at DSG declined, sales increased at Hudson’s Bay, primarily driven by strong overall digital sales. Active and ladies shoes continued to perform well while handbag sales declined and growth in home was lower year over year. Ongoing initiatives at Hudson’s Bay include an increased focus on key categories such as active, dresses, home and men’s, as well as focused digital marketing designed to drive all-channel sales. At Lord & Taylor, in-store traffic remains challenging, though the Company has seen an improvement in overall conversion. During the quarter, Lord & Taylor expanded The Dress Address initiative, and continues to heighten its focus on key categories such as active, dresses, denim and fine jewelry while investing in value-focused messaging and new and existing partnerships. Lord & Taylor is also dedicating additional resources to its digital business in an effort to drive performance of this channel.

As announced today, the Company is creating dedicated leadership teams for each of Hudson’s Bay and Lord & Taylor. These teams will drive market-specific strategies that support plans for continued growth at Hudson’s Bay in Canada and increase the pace of change at Lord & Taylor, with an emphasis on driving digital opportunities.

Lower comparable sales at Saks Fifth Avenue were primarily driven by lower traffic, a decline in international sales, and a shift in timing of two major promotional events. Saks continues to focus on injecting newness into the customer experience while investing in marketing initiatives in key markets through events, targeted marketing, and continued enhancements to our SaksFirst loyalty program. Saks Fifth Avenue will also roll out several digital initiatives over the coming months and expects to expand its drop ship program in addition to rolling out “buy online, pick up in store” functionality at all stores.

Lower traffic at Saks OFF 5TH and Gilt primarily drove the comparable sales decline at HBC Off Price, though Gilt accounted for an outsized portion of the overall decline. The Company continues to work on elevating the assortment at Saks OFF 5TH, while also growing the amount of exclusive product both in store and online. The integration of Gilt and Saks OFF 5TH is ongoing, with the expectation that Saks OFF 5TH assortments will be available on Gilt by the end of the third fiscal quarter, providing customers with more access to top designers, products, and categories at attractive values.

Digital sales increased by 5.6% from the prior year, with comparable digital sales on a constant currency increasing by 5.4%. Excluding Gilt, comparable digital sales on a constant currency basis increased by 13.2%, reflecting the Company’s continued strategic focus on growing this channel.

For HBC overall, gross profit1 as a percentage of retail sales was 41.7%, a decline of 20 basis points compared to the prior year. The majority of the decrease is the result of lower margins realized at DSG and HBC Off Price due, in part, to increased promotional activity, partially offset by higher margins at Saks Fifth Avenue and HBC Europe.

SG&A expenses were $1,373 million compared to $1,395 million in the prior year. During the quarter the 4th Circuit court affirmed a U.S. $31 million judgment in favour of the Company with respect to its Lord & Taylor store in White Flint, Maryland. This judgment was for damages resulting from changes made to the adjacent White Flint Mall that were undertaken without Lord & Taylor’s consent. Cash proceeds from the judgment were also received during the quarter, and the amount has been recognized as a credit to SG&A in the Company’s statement of loss.

SG&A expenses also benefited from a $22 million dollar impact related to foreign exchange rate movements, a $16 million reduction in lease guarantee provisions, a $15 million reduction in acquisition and integration related expenses, as well as initial savings from the Company’s $75 million cost savings initiative announced earlier in the year. Partially offsetting these benefits was a $10 million increase in restructuring charges as a result of the same cost savings initiative, $21 million in expenses related to HBC’s expansion into the Netherlands, a $7 million increase in rent expense, as well as incremental expenses related to new stores and various other items. Additionally, both the shift to digital sales from traditional in-store sales as well as overall digital sales growth during the quarter continues to have a negative impact on SG&A expenses as a result of higher fulfillment costs associated with this channel. Profit margins on digital sales are expected to improve over time, as the Company continues to invest in its digital supply chain, reduces expenses related to its digital operations and introduces store centric all-channel delivery options.

Adjusted SG&A1 expenses, which exclude certain non-cash items and normalizing adjustments consistent with the Company’s other adjusted non-IFRS metrics, were $1,341 million or 41.9% of retail sales, compared to $1,300 million or 39.4% in the prior year. This increase in SG&A dollars was driven by additional SG&A related to new stores opened during the previous year, additional investment in digital resources combined with an increase in fulfillment expenses related to the sales growth in this channel, and various other items, partially offset by a $19 million benefit as a result of foreign exchange rate movements. These factors, combined with the impacts associated with lower comparable sales, resulted in an increased Adjusted SG&A1 expense rate.

Adjusted EBITDAR1 was $168 million, compared to $250 million in the prior year. The decline in Adjusted EBITDAR1 can be primarily attributed to a decline in gross profit dollars combined with an increase in Adjusted SG&A1 expenses as discussed above.

While rent expenses are spread evenly over the course of the Fiscal year, the Company’s pre-rent earnings are typically highly seasonal, with the majority of earnings generated in the back half of the Fiscal year. The formation of the two real estate joint ventures and the establishment of additional rents payable to these entities significantly increased rental expense as a percentage of the seasonally low pre-rent earnings generated during the first half of the fiscal year. Total rent expense during the first quarter, including net cash rent associated with the Company’s joint ventures, was essentially flat compared to the prior year. Accordingly, Adjusted EBITDA1 was negative $21 million, a decrease of $83 million compared to the prior year and consistent with the decline in Adjusted EBITDAR1.

Net loss was $221 million compared to $97 million in the prior year. The higher net loss is primarily due to lower gross margin dollars combined with higher depreciation and amortization expenses of $15 million, higher finance costs of $12 million and an increased share of net loss from the joint ventures of $25 million. This change in the net loss from joint ventures was driven by the impact of foreign exchange translation of Euro denominated debt at HBS Global Properties. Additionally, prior year results included a net of tax gain of $28 million on the sale of investments in the joint ventures, while the current quarter included a net of tax $25 million SG&A credit related to the White Flint Lord & Taylor judgment. Normalized Net Losses1 were $217 million compared to $91 million in the prior year. This decrease is primarily a result of lower gross profit dollars and higher Adjusted SG&A1, as described above, as well as increased depreciation and amortization expenses.

Finance costs were $57 million compared to $45 million in the prior year. The increase is primarily related to the reduction in non-cash finance income generated from mark-to-market adjustments associated with the valuation of Common Share purchase warrants outstanding compared to the prior year. Additionally, there was an increase in interest costs related to long-term borrowings, partially offset by reductions in interest costs related to short-term borrowings. Interest paid in cash was $45 million compared to $49 million in the prior year.

Note:
1 These performance metrics have been identified by the Company as Non-IFRS measures. For the relevant definitions and reconciliations, please refer to the “Non-IFRS Measures” and “Supplemental Information” sections, respectively, of this release.

Real Estate

Management strongly believes in the value of the Company’s real estate assets, which are predominantly located in high traffic locations including urban high streets and prime retail shopping centres. To date, HBC has structured two joint ventures as REIT ready vehicles, obtained independent appraisals on its two wholly-owned New York City flagships as part of mortgage financings on the properties, and sold equity in HBS Global Properties to third-party investors. To continue to highlight the value of its real estate assets, the Company may take additional actions which could include the sale of additional equity in its joint ventures or real estate assets, and/or a potential public listing of either or both of the joint ventures, in all cases subject to prevailing market conditions.

Inventory

Inventory at the end of the first quarter increased by $299 million compared to the prior year. This increase was driven primarily by foreign exchange rate movements and higher inventory at HBC Europe, largely as a result of the introduction of new brands and upgraded concepts at Galeria Kaufhof. Saks Fifth Avenue and Saks OFF 5TH also experienced a moderate increase in inventory levels, driven by the addition of new stores. These increases were partially offset by lower inventory at DSG.

About HBC

HBC is a diversified global retailer focused on driving the performance of high quality stores and their all-channel offerings, growing through acquisitions, and unlocking the value of real estate holdings. Founded in 1670, HBC is the oldest company in North America. HBC’s portfolio today includes formats ranging from luxury to premium department stores to off price fashion shopping destinations, with more than 480 stores and over 66,000 employees around the world.

HBC’s leading banners across North America and Europe include Hudson’s Bay, Lord & Taylor, Saks Fifth Avenue, Gilt, Saks OFF 5TH, Galeria Kaufhof, the largest department store group in Germany, and Belgium’s only department store group Galeria INNO.

HBC has significant investments in real estate joint ventures. It has partnered with Simon Property Group Inc. in the HBS Global Properties Joint Venture, which owns properties in the United States and Germany. In Canada, it has partnered with RioCan Real Estate Investment Trust in the RioCan-HBC Joint Venture.

Forward-Looking Statements

Certain statements made in this news release, including, but not limited to, the benefits of the Company’s model of combining world class real estate assets with diverse retail businesses, the anticipated benefits and annualized savings from HBC’s Transformation Plan and potential additional productivity enhancements, including the initiative’s ability to increase synergies across the Company’s portfolio of businesses, sharpen capabilities that give the Company a competitive edge and re-align its expenses to focus on growing our digital business and ability to execute key components of the Transformation Plan, including creating dedicated leadership teams for each of Hudson’s Bay and Lord & Taylor, integrating digital functions throughout the organization, realigning Company resources to increase efficiencies and leverage scale, optimizing in-store service and enhanced training to store associates, reducing headcount by approximately 2,000 positions, leveraging the size and scale of the Company to optimize procurement, activities expected to drive sales in Europe, opportunity for Saks OFF 5TH banner stores in Germany, digital initiatives, integration of Gilt and Saks OFF 5TH, and the Company’s strategy with respect to the joint ventures, the Company’s anticipated gross capital investments and capital investments, net of landlord incentives, for Fiscal 2017, and the intended use of such capital investments, including expansion into the Netherlands, ongoing store renovations and the installation of automated fulfillment technology at the Pottsville distribution centre, the intended use of the cash savings from the Company’s change in dividend policy, and other statements that are not historical facts, are forward-looking. Often but not always, forward-looking statements can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “believe”, “estimate”, “plan”, “could”, “should”, “would”, “outlook”, “forecast”, “anticipate”, “foresee”, “continue” or the negative of these terms or variations of them or similar terminology.

Implicit in forward-looking statements in respect of capital investments, including, among others, the Company’s anticipated Fiscal 2017 total capital investments, net of landlord incentives, between $450 million and $550 million, are certain assumptions regarding, among others, the overall retail environment and currency exchange rates for Fiscal 2017. Gross capital investment is expected to be between $1,025 million and $1,125 million, of which approximately $800 million is related to growth initiatives. Specifically, the Company has assumed the following exchange rates for Fiscal 2017: USD:CAD = 1:1.34 and EUR:CAD = 1:1.43. These current assumptions, although considered reasonable by the Company at the time of preparation, may prove to be incorrect. Readers are cautioned that actual capital investments could differ materially from what is currently expected and are subject to a number of risks and uncertainties, including, among others described below, general economic, geo-political, market and business conditions, changes in foreign currency rates from those assumed, the risk of unseasonal weather patterns and the risk that the Company may not achieve overall anticipated financial performance.

Although HBC believes that the forward-looking statements in this news release are based on information and assumptions that are current, reasonable and complete, these statements are by their nature subject to a number of factors that could cause the Company’s actual results, level of activity, performance, achievements, future events or developments to differ materially from management’s expectations and plans as set forth in such forward-looking statements, including, without limitation, the following factors, many of which are beyond HBC’s control and the effects of which can be difficult to predict: ability to execute retailing growth strategies, ability to continue comparable sales growth, changing consumer preferences, marketing and advertising program success, damage to brands, dependence on vendors, ability to realize synergies and growth from strategic acquisitions, ability to make successful acquisitions and investments, successful inventory management, loss or disruption in centralized distribution centres, ability to upgrade and maintain the Company’s information systems to support the organization and protect against cyber-security threats, privacy breach, risks relating to the Company’s size and scale, loss of key personnel, ability to attract and retain qualified employees, deterioration in labour relations, ability to maintain pension plan surplus, funding requirement of Saks’ pension plan, funding requirement of the HBC Europe pension plan, limits on insurance policies, loss of intellectual property rights, insolvency risk of parties which the Company does business with or their unwillingness to perform their obligations, exposure to changes in the real estate market, successful operation of the joint ventures to allow the Company to realize the anticipated benefits, loss of flexibility with respect to properties in the joint ventures, exposure to environmental liabilities, changes in demand for current real estate assets, increased competition, change in spending of consumers including the impact of unfavourable or unstable political conditions and terrorism, international operational risks, fluctuations in the U.S. dollar, Canadian dollar, Euro and other foreign currencies, increase in raw material costs, seasonality of business, extreme weather conditions or natural disasters, ability to manage indebtedness and cash flow, risks related with increasing indebtedness, restrictions of existing credit facilities reducing flexibility, ability to maintain adequate financial processes and controls, ability to maintain dividends, ability of a small number of shareholders to influence the business, uncontrollable sale of the Company’s Common Shares by significant shareholders could affect share price, constating documents discouraging favorable takeover attempts, increase in regulatory liability, increase in product liability or recalls, increase in litigation, developments in the credit card and financial services industries, changes in accounting standards, other risks inherent to the Company’s business and/or factors beyond its control which could have a material adverse effect on the Company.

HBC cautions that the foregoing list of important factors and assumptions is not exhaustive and other factors could also adversely affect its results. For more information on the risks, uncertainties and assumptions that could cause HBC’s actual results to differ from current expectations, please refer to the “Risk Factors” section of HBC’s Annual Information Form dated April 28, 2017, the “Risk Factors” section of HBC’s MD&A dated June 8, 2017, as well as HBC’s other public filings, available at www.sedar.com and at www.hbc.com.

The forward-looking statements contained in this news release describe HBC’s expectations at the date of this news release and, accordingly, are subject to change after such date. Except as may be required by applicable Canadian securities laws, HBC does not undertake any obligation to update or revise any forward-looking statements contained in this news release, whether as a result of new information, future events or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements.

INVESTOR RELATIONS:
Elliot Grundmanis
(646) 802-2469
elliot.grundmanis@hbc.com

MEDIA:
Andrew Blecher
(646) 802-4030
Andrew.blecher@hbc.com

Source: HBC

Ulta Beauty to host first quarter 2017 results conference call on Thursday, May 25, 2017

BOLINGBROOK, Ill., 2017-May-15 — /EPR Retail News/ — Ulta Beauty (NASDAQ: ULTA) today (May 11, 2017) announced that the Company will conduct a conference call to discuss its first quarter 2017 results on Thursday, May 25, 2017 at 5:00 p.m. Eastern Time / 4:00 p.m. Central Time. A press release detailing the Company’s first quarter 2017 results will be issued after the market closes and prior to the call. The conference call will be hosted by Mary Dillon, Chief Executive Officer, and Scott Settersten, Chief Financial Officer.

Investors and analysts interested in participating in the call are invited to dial (877) 705-6003. The conference call will also be webcast live at http://ir.ulta.com. A replay of the webcast will remain available for 90 days. A replay of the conference call will be available until 11:59 p.m. ET on June 8, 2017 and can be accessed by dialing (844) 512-2921 and entering conference ID number 13661770.

About Ulta Beauty

Ulta Beauty (NASDAQ: ULTA) is the largest beauty retailer in the United States and the premier beauty destination for cosmetics, fragrance, skin, hair care products and salon services. Since opening its first store in 1990, Ulta Beauty has grown to become the top national retailer providing All Things Beauty. All in One Place™. The Company offers more than 20,000 products from over 500 well-established and emerging beauty brands across all categories and price points, including Ulta Beauty’s own private label. Ulta Beauty also offers a full-service salon in every store featuring hair, skin and brow services. Ulta Beauty is recognized for its commitment to personalized service, fun and inviting stores and its industry-leading Ultamate Rewards loyalty program. As of April 29, 2017, Ulta Beauty operates 990 retail stores across 48 states and the District of Columbia and also distributes its products through its website, which includes a collection of tips, tutorials and social content. For more information, visit www.ulta.com.

Contact:
Scott Settersten
Chief Financial Officer
(630) 410-4807

Laurel Lefebvre
Vice President, Investor Relations
(630) 410-5230

Karen May
Director, Public Relations
(630) 410-5457

Source: Ulta Beauty

Staples, Inc. to hold its 1Q 2017 results conference call on Tuesday, May 16, 2017

FRAMINGHAM, Mass., 2017-May-11 — /EPR Retail News/ — Staples, Inc. (Nasdaq: SPLS) will hold its quarterly conference call to discuss first quarter 2017 results on Tuesday, May 16, 2017 at 8:00 a.m. Eastern Time. To listen to the conference call via webcast, please visit Staples’ Investor Relations website at http://investor.staples.com.

About Staples, Inc.
Staples brings technology and people together in innovative ways to consistently deliver products, services and expertise that elevate and delight customers. Staples is in business with businesses and is passionate about empowering people to become true professionals at work. Headquartered outside of Boston, Mass., Staples, Inc. operates primarily in North America, with additional offices in South America and Asia. More information about Staples (NASDAQ: SPLS) is available at www.staples.com.

SOURCE: Staples, Inc.

Contacts

Staples, Inc.
Media Contact:
Bill Durling
508-253-2882

Investor Contact:
Chris Powers/Scott Tilghman
508-253-4632/1487

Shopify Shows Excellent Start to the Year With First Quarter 2017 Results

  • First-Quarter Revenue Grows 75% Year on Year
  • First-Quarter Gross Merchandise Volume Grows 81% Year on Year
  • Shopify reports in U.S. dollars and in accordance with U.S. GAAP

Ottawa, Canada, 2017-May-08 — /EPR Retail News/ — Shopify Inc. (NYSE:SHOP)(TSX:SHOP), the leading cloud-based, multi-channel commerce platform designed for small and medium-sized businesses, today (May 2, 2017) announced strong financial results for the quarter ended March 31, 2017.

“With our excellent start to the year, it is clear we are becoming the de facto platform for sellers,” stated Russ Jones, Shopify’s CFO. “In addition to merchant growth and their adoption of both new channels and merchant solutions, we also continue to see expansion of merchants’ GMV.  Retail is shifting headlong toward the vision we laid out two years ago — of inspiring entrepreneurship with multi-channel commerce — and we fully expect to continue leading this industry transition for years to come.”

First-Quarter Financial Highlights

  • Total revenue in the first quarter was $127.4 million, a 75% increase from the comparable quarter in 2016. Within this, Subscription Solutions revenue grew 60% to $62.1 million.  This increase was driven by the continued rapid growth in Monthly Recurring Revenue (“MRR”) as a record number of merchants joined the platform in the period.  Merchant Solutions revenue grew 92% to $65.3 million, driven primarily by the growth of Gross Merchandise Volume (“GMV”).
  • MRR as of March 31, 2017 was $20.7 million, up 62% compared with $12.8 million as of March 31, 2016.  Shopify Plus contributed $3.5 million, or 17%, of MRR compared with 11% of MRR as of March 31, 2016.
  • GMV for the first quarter was $4.8 billion, an increase of 81% over the first quarter of 2016.  Gross Payments Volume (“GPV”) grew to $1.8 billion, which accounted for 38% of GMV processed in the quarter, versus $1.0 billion, or 37%, for the first quarter of 2016.
  • Gross profit dollars grew 80% to $72.2 million as compared with the $40.1 million recorded for the first quarter of 2016.
  • Operating loss for the first quarter of 2017 was $14.5 million, or 11% of revenue, versus $9.7 million, or 13% of revenue, for the comparable period a year ago.
  • Adjusted operating loss4 for the first quarter of 2017 was 3.4% of revenue, or $4.3 million; adjusted operating loss for the first quarter of 2016 was 8.1% of revenue, or $5.9 million.
  • Net loss for the first quarter of 2017 was $13.6 million, or $0.15 per share, compared with $8.9 million, or $0.11 per share, for the first quarter of 2016.
  • Adjusted net loss4 for the first quarter of 2017 was $3.5 million, or $0.04 per share, compared with an adjusted net loss of $5.1 million, or $0.06 per share, for the first quarter of 2016.
  • At March 31, 2017, Shopify had $395.7 million in cash, cash equivalents and marketable securities, compared with $392.4 million on December 31, 2016, and compared with $189.5 million on March 31, 2016.

Business Highlights

  • Over one thousand Shopify Partners and Developers from around the world gathered in San Francisco in April to discuss the future of Shopify, commerce, and technology at our partner conference, Shopify Unite. New product development discussions included several announcements scheduled for availability in the second quarter, such as:
    • Shopify Point-of-Sale Card Reader. The first piece of hardware designed in-house by Shopify, the new chip-and-swipe reader offers portability and EMV support to merchants looking to sell at markets, pop-up shops or permanent retail locations. Emblazoned with the Shopify logo, the new reader seamlessly connects a merchant’s in-person sales with those made on their online store and other channels.
    • Shopify Pay. Shopify Pay allows merchants to offer their customers the option to securely save their shipping and credit card information for future purchases from any participating Shopify store. Shopify Pay is designed to increase conversion by reducing checkout to a simple 2-step entry: an email address and a unique 6-digit order notification via SMS.
    • Wholesale Channel for Plus. Using this channel, Shopify Plus merchants can create a separate, password-protected storefront, managed within their existing store. Merchants can invite buyers to purchase products at assigned wholesale prices, creating a more efficient way to manage customer bulk ordering in one place, without two systems or workarounds.
    • New Application Programming Interfaces (“APIs”) for partners.  Shopify Partners can now leverage  new APIs across a number of areas to build useful apps that integrate more directly with Shopify.  These include the Custom Storefront API, which enables partners to build for specific audiences, experiences and opportunities; the Marketing Events API, which allows developers to automatically add tracking to their marketing apps, helping merchants understand the impact of their marketing efforts; and the Draft Orders API, which lets developers expand how orders are created and completed.
  • Mobile traffic to merchants’ stores continued to grow, reaching 69% of traffic and 59% of orders at the end of March 2017 versus 62% and 51%, respectively, at the end of March 2016.
  • Shopify Capital reached $49 million in aggregate cash advances to U.S. merchants using Shopify Payments by the end of the first quarter. By April 30, 2017, aggregate cash advances had reached more than $60 million.

Financial Outlook

The financial outlook that follows constitutes forward-looking information within the meaning of applicable securities laws and is based on a number of assumptions and subject to a number of risks. Actual results could vary materially as a result of numerous factors, including certain risk factors, many of which are beyond Shopify’s control. Please see “Forward-looking Statements” below.

In addition to the other assumptions and factors described in this press release, Shopify’s outlook assumes the continuation of growth trends in our industry, our ability to manage our growth effectively and the absence of material changes in our industry or the global economy. The following statements supersede all prior statements made by Shopify and are based on current expectations.  As these statements are forward-looking, actual results may differ materially.

These statements do not give effect to the potential impact of mergers, acquisitions, divestitures or business combinations that may be announced or closed after the date hereof.  All numbers provided in this section are approximate.

For the full year 2017, Shopify currently expects:

  • Revenues in the range of $615 million to $630 million
  • GAAP operating loss in the range of $69 million to $73 million
  • Adjusted operating loss in the range of $14 million to $18 million, which excludes stock-based compensation expenses and related payroll taxes of $55 million

For the second quarter of 2017, Shopify currently expects:

  • Revenues in the range of $142 million to $144 million
  • GAAP operating loss in the range of $18 million to $20 million
  • Adjusted operating loss4 in the range of $6 million to $8 million, which excludes stock-based compensation expenses and related payroll taxes of $12 million

Quarterly Conference Call

Shopify’s management team will hold a conference call to discuss its first-quarter results today, May 2, 2017, at 8:30 a.m. ET.  The conference call will be webcast on the investor relations section of Shopify’s website at https://investors.shopify.com/events/Events-Presentations/default.aspx.  An archived replay of the webcast will be available following the conclusion of the call.

Shopify’s First-Quarter 2017 Interim Unaudited Condensed Consolidated Financial Statements and Notes and its First-Quarter 2017 Management’s Discussion and Analysis are available on Shopify’s website at www.shopify.com, and will be filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

About Shopify

Shopify is the leading cloud-based, multi-channel commerce platform designed for small and medium-sized businesses. Merchants can use the software to design, set up, and manage their stores across multiple sales channels, including web, mobile, social media, marketplaces and physical retail locations. The platform also provides merchants with a powerful back-office and a single view of their business. The Shopify platform was engineered for reliability and scale, making enterprise-level technology available to businesses of all sizes. Shopify currently powers hundreds of thousands of businesses in approximately 175 countries and is trusted by brands such as Tesla, Nestle, GE, Red Bull, Kylie Cosmetics, and many more.

Non-GAAP Financial Measures

To supplement its consolidated financial statements, which are prepared and presented in accordance with United States generally accepted accounting principles (GAAP), Shopify uses certain non-GAAP financial measures to provide additional information in order to assist investors in understanding its financial and operating performance.

Adjusted operating loss, non-GAAP operating expenses, adjusted net loss and adjusted net loss per share are non-GAAP financial measures that exclude the effect of share-based compensation expenses and related payroll taxes.

Management uses non-GAAP financial measures internally for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Shopify believes that these non-GAAP measures provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.  Non-GAAP financial measures are not recognized measures for financial statement presentation under U.S. GAAP and do not have standardized meanings, and may not be comparable to similar measures presented by other public companies. Such non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. See the financial tables below for a reconciliation of the non-GAAP measures.

Forward-looking Statements

This press release contains certain forward-looking statements within the meaning of applicable securities laws, including statements regarding Shopify’s financial outlook and future financial performance. Words such as “expects”, “anticipates” and “intends” or similar expressions are intended to identify forward-looking statements.

These forward-looking statements are based on Shopify’s current projections and expectations about future events and financial trends that management believes might affect its financial condition, results of operations, business strategy and financial needs, and on certain assumptions and analysis made by Shopify in light of the experience and perception of historical trends, current conditions and expected future developments and other factors management believes are appropriate. These projections, expectations, assumptions and analyses are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause actual results, performance, events and achievements to differ materially from those anticipated in these forward-looking statements. Although Shopify believes that the assumptions underlying these forward-looking statements are reasonable, they may prove to be incorrect, and readers cannot be assured that actual results will be consistent with these forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements as a result of numerous factors, including certain risk factors, many of which are beyond Shopify’s control, including but not limited to: (i) merchant acquisition and retention; (ii) managing our growth; (iii) our history of losses; (iv) our limited operating history; (v) our ability to innovate; (vi) a disruption of service or security breach; (vii) payments processed through Shopify Payments; (viii) our reliance on a single supplier to provide the technology we offer through Shopify Payments; (ix) a breach involving personally identifiable information; (x) serious software errors or defects; (xi) exchange rate fluctuations; (xii) achieving or maintaining data transmission capacity; and (xiii) other one-time events and other important factors disclosed previously and from time to time in Shopify’s filings with the U.S. Securities and Exchange Commission and the securities commissions or similar securities regulatory authorities in each of the provinces or territories of Canada. The forward-looking statements contained in this news release represent Shopify’s expectations as of the date of this news release, or as of the date they are otherwise stated to be made, and subsequent events may cause these expectations to change. Shopify undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

CONTACT:

INVESTORS:
Katie Keita
Director, Investor Relations
613-241-2828
IR@shopify.com

MEDIA:
Erin Hochstein
Public Relations Manager
226-972-1767
press@shopify.com

Source: Shopify

Sequential Brands Group Starts Year Strong With First Quarter 2017 Results

Company Announces New Multi-Year Agreement with QVC for Martha Stewart Brand

  • Q1 Revenue increased 16% to $39.4 million
     
  • Q1 GAAP diluted EPS of $(0.02); Q1 non-GAAP diluted EPS of $0.09
     
  • Q1 GAAP net loss of $(1.2) million; Q1 non-GAAP net income of $5.9 million
  • Q1 Adjusted EBITDA increased 38% to $23.0 million

NEW YORK, 2017-May-08 — /EPR Retail News/ — Sequential Brands Group, Inc. (“Sequential” or the “Company”) (Nasdaq:SQBG) today (May 04, 2017) announced financial results for the first quarter ended March 31, 2017.

First Quarter 2017 Results:
Total revenue for the first quarter ended March 31, 2017 increased 16% to $39.4 million, compared to $34.0 million in the prior year quarter.  On a GAAP basis, net loss for the first quarter 2017 was $(1.2) million or $(0.02) per diluted share compared to a net loss for the first quarter 2016 of $(1.1) million or $(0.02) per diluted share. Included in the first quarter 2017 was a charge of $(0.11) or $6.7 million related to costs associated with the departure of our former CEO. The charge included $3.2 million in severance expense and $3.5 million in non-cash stock-based compensation expense, which represents the accelerated vesting of previously granted stock awards, and was calculated based on the fair value on the stock’s grant date in April 2015 of $14.33 per share in accordance with GAAP. The fair value of the shares on the termination date was $3.95 per share, or approximately $1.1 million total.  Taking this and other small items into consideration, Non-GAAP income for the first quarter 2017 was $5.9 million, or $0.09 per diluted share, compared to $2.5 million, or $0.04 per diluted share, in the prior year period. Adjusted EBITDA (defined in the accompanying Non-GAAP Financial Measures) for the first quarter of 2017 was $23.0 million, compared to $16.7 million in the prior year quarter.  See Non-GAAP Financial Measure Reconciliation tables below for a reconciliation of GAAP to non-GAAP measures.

“We started the year off strong with solid results in the first quarter and several new organic growth initiatives underway,” said Karen Murray, CEO of Sequential Brands Group. “Going forward, our top priority is implementing new revenue initiatives across all of our brands, while maintaining a disciplined approach to expense management. At the same time, we are focused on taking the steps needed to improve our balance sheet.”

Financial Update:
For the year ending December 31, 2017, the Company is reiterating guidance of $170 million to $175 million in revenue and $98 million to $102 million of Adjusted EBITDA.  The Company’s GAAP net income is now expected to be $15.5 million to $18.1 million due to costs associated with the departure of the Company’s CEO as mentioned above.  The Company’s contractual guaranteed minimum royalties for 2017 are approximately $120 million.  Consistent with the Company’s historical quarterly results, the Company expects revenue for 2017 to be weighted to the third and fourth quarters due to seasonality in the businesses of many of the Company’s licensees.

Business Update:
This morning the Company announced a new multi-year agreement with QVC for the Martha Stewart brand. The partnership is expected to launch in the second half of this year and will include categories such as fashion apparel, skincare and food and beverage. The collaboration will also feature appearances on QVC by Martha Stewart and a select team of Martha’s lifestyle experts.

Investor Call and Webcast:
Management will provide further commentary today, May 4, 2017, on the Company’s financial results via a conference call and webcast beginning at approximately 8:30 am ET.  To join the conference call, please dial (877) 407-0789 or visit the investor relations page on the Company’s website www.sequentialbrandsgroup.com.

Non-GAAP Financial Measures:
This press release contains historical and projected measures of Adjusted EBITDA, non-GAAP net income and non-GAAP net income per diluted share.  The Company defines Adjusted EBITDA as net loss attributable to Sequential Brands Group, Inc. and Subsidiaries, excluding interest income or expense, income taxes, depreciation and amortization, acquisition-related costs, non-cash compensation, MSLO Shareholder and pre-acquisition litigation costs, restructuring costs and costs incurred in connection with CEO transition.  Non-GAAP net income and non-GAAP earnings per share are non-GAAP financial measures which represent net loss attributable to Sequential Brands Group, Inc. and Subsidiaries, excluding acquisition-related costs, non-cash mark-to-market adjustments to stock-based compensation provided to non-employees, restructuring costs, costs incurred in connection with CEO transition, MSLO Shareholder and pre-acquisition litigation costs and adjustment to taxes.  These non-GAAP metrics are an alternative to the information calculated under U.S. generally accepted accounting principles (“GAAP”), as provided in the reports the Company files with the Securities and Exchange Commission, may be inconsistent with similar measures presented by other companies and should only be used in conjunction with the Company’s results reported according to GAAP.  Any financial measure other than those prepared in accordance with GAAP should not be considered a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP.  We consider these measures to be useful measures of our ongoing financial performance because they adjust for certain costs and other events that the Company believes are not representative of its ongoing business.  See below for a reconciliation of these non-GAAP metrics from the most directly comparable GAAP measure.

About Sequential Brands Group, Inc.

Sequential Brands Group, Inc. (Nasdaq:SQBG) owns, promotes, markets, and licenses a portfolio of consumer brands in the home, active and fashion categories.  Sequential seeks to ensure that its brands continue to thrive and grow by employing strong brand management, design and marketing teams.  Sequential has licensed and intends to license its brands in a variety of consumer categories to retailers, wholesalers and distributors in the United States and around the world.  For more information, please visit Sequential’s website at: www.sequentialbrandsgroup.com.  To inquire about licensing opportunities, please email: newbusiness@sbg-ny.com.

Forward-Looking Statements
Certain statements in this press release and oral statements made from time to time by representatives of the Company are forward-looking statements (“forward-looking statements”) within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are made as of the date hereof and are based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. The Company’s actual results could differ materially from those stated or implied in forward-looking statements. Forward-looking statements include statements concerning estimates of GAAP net income, Adjusted EBITDA, revenue (including guaranteed minimum royalties), and margins, guidance, plans, objectives, goals, strategies, expectations, intentions, projections, developments, future events, performance or products, underlying assumptions and other statements that are not historical in nature, including those that include the words “subject to,” “believes,” “anticipates,” “plans,” “expects,” “intends,” “estimates,” “forecasts,” “projects,” “aims,” “targets,” “may,” “will,” “should,” “can,” “future,” “seek,” “could,” “predict,” the negatives thereof, variations thereon and similar expressions.  Such forward-looking statements reflect the Company’s current views with respect to future events, based on what the Company believes are reasonable assumptions. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including: (i) risks and uncertainties discussed in the reports that the Company has filed with the Securities and Exchange Commission (the  “SEC”); (ii) general economic, market or business conditions; (iii) the Company’s ability to identify suitable targets for acquisitions and to obtain financing for such acquisitions on commercially reasonable terms; (iv) the Company’s ability to timely achieve the anticipated results of recent acquisitions and any potential future acquisitions; (v) the Company’s ability to successfully integrate acquisitions into its ongoing business; (vi) the potential impact of the consummation of recent acquisitions or any potential future acquisitions on the Company’s relationships, including with employees, licensees, customers and competitors; (vii) the Company’s ability to achieve and/or manage growth and to meet target metrics associated with such growth; (viii) the Company’s ability to successfully attract new brands and to identify suitable licensees for its existing and newly acquired brands; (ix) the Company’s substantial level of indebtedness, including the possibility that such indebtedness and related restrictive covenants may adversely affect the Company’s future cash flows, results of operations and financial condition and decrease its operating flexibility; (x) the Company’s ability to achieve its guidance; (xi) continued market acceptance of the Company’s brands; (xii) changes in the Company’s competitive position or competitive actions by other companies; (xiii) licensees’ ability to fulfill their financial obligations to the Company; (xiv) concentrations of the Company’s licensing revenues with a limited number of licensees and retail partners; and (xv) other circumstances beyond the Company’s control.  Refer to the section entitled “Risk Factors” set forth in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q for a discussion of important risks, uncertainties and other factors that may affect the Company’s business, results of operations and financial condition.  The Company’s stockholders are urged to consider such risks, uncertainties and factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved.  As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements.  The Company is not under any obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.  Readers should understand that it is not possible to predict or identify all risks and uncertainties to which the Company may be subject.  Consequently, readers should not consider such disclosures to be a complete discussion of all potential risks or uncertainties.

For media inquiries, contact:
Jaime Cassavechia
T:  +1 212-518-4771 x108
E:  jcassavechia@sbg-ny.com

For Investor Relations inquiries, contact:
Katherine Nash
T:  +1 512-757-2566
E:  knash@sbg-ny.com

Source: Sequential Brands Group, Inc. /globenewswire

Cabela’s Inc Experienced Challenging Traffic Patterns In Release of First Quarter 2017 Results

  • First Quarter GAAP Diluted EPS of $0.28 and Non-GAAP Diluted EPS of $0.40
  • Cabela’s CLUB® Avg. Receivables Grew 11.0%
  • Consolidated Retail Comparable Store Sales Decreased 8.9%
  • SD&A Expenses Decreased $1.3 Million to $327.9 Million on a GAAP Basis and Decreased $3.1 Million to $318.6 Million on a Non-GAAP Basis

SIDNEY, Neb., 2017-May-08 — /EPR Retail News/ — Cabela’s Incorporated (NYSE:CAB) today (May 4, 2017) reported financial results for the first quarter fiscal 2017.

For the quarter, on a GAAP basis, total revenue decreased 3.4% to $834.9 million, revenue from retail store sales decreased 3.9% to $542.0 million, Internet and catalog sales decreased 12.6% to $136.1 million, and Financial Services revenue increased 6.5% to $150.0 million. For the quarter, U.S. comparable store sales decreased 9.1% and consolidated comparable store sales decreased 8.9%.

For the quarter, net income decreased 16.7% to $19.1 million compared to $22.9 million in the year ago quarter, and earnings per diluted share were $0.28 compared to $0.33 in the year ago quarter. Adjusted for certain items, the Company reported first quarter net income of $27.6 million and earnings per diluted share of $0.40 as compared to net income of $29.5 million and earnings per diluted share of $0.43 in the year ago quarter. First quarter 2017 GAAP results included impairment and restructuring charges and other items totaling a $0.12 reduction in earnings per diluted share. See the supporting schedules to this earnings release labeled “Reconciliation of GAAP Reported to Non-GAAP Adjusted Financial Measures” for a reconciliation of the GAAP to non-GAAP financial measures.

“While we were disappointed with our merchandise sales in the first quarter, we were very pleased with the excellent performance of our Cabela’s CLUB Visa program and our focus on expense management, which continued to provide meaningful contributions to profitability,” said Tommy Millner, Cabela’s Chief Executive Officer. “Similar to broader retail industry trends, we continued to experience challenging traffic patterns in the first quarter. Our growth in average ticket was more than offset by continued decreases in transactions.”

For the quarter, consolidated comparable store sales decreased 8.9% and U.S. comparable store sales decreased 9.1% as compared to the same quarter a year ago. The decrease in comparable store sales was attributable to several specific events. Firearms and ammunition have faced several headwinds including the election and the tough comparisons from the San Bernardino tragedy a year ago. The home and gifts category was challenged by difficult comparisons related to a significant spike in demand for specific items in the first quarter a year ago. While apparel categories comped negatively for the quarter, they have shown signs of improvement and were down less than the consolidated comp.

Merchandise gross margin decreased by 80 basis points in the quarter to 31.4% compared to 32.2% in the same quarter a year ago. This decrease was primarily attributable to the impacts of increased sales discounts and promotional activity as well as merchandise mix. Sales discounts and promotional activity were responsible for approximately 70 basis points of the decrease and the merchandise mix impact was approximately 10 basis points of the overall decrease for the quarter.

Expense management initiatives continued to generate meaningful contributions to profitability. For the quarter, GAAP basis SD&A expenses decreased by $1.3 million to $327.9 million as compared to $329.2 million in the same quarter a year ago. On a non-GAAP basis, SD&A expenses decreased $3.1 million to $318.6 million as compared to $321.7 millionin the same quarter a year ago. Expense reductions were primarily related to efficiencies in labor and a decrease in certain marketing expenses.

“We continue to be very pleased with the results of our expense and process improvement initiatives,” Millner said. “We are particularly encouraged by the sustainable impact of these initiatives from their implementation in 2015 through the first quarter. I commend our teams for executing these profitability enhancing improvements throughout the business.”

The Cabela’s CLUB Visa program had another excellent quarter. For the quarter, growth in the average number of active credit card accounts was 2.4% and growth in average balance per active credit card account was 8.3% as compared to the same period a year ago. The average balance of credit card loans grew 11.0% to approximately $5.4 billion as compared to $4.9 billion in the year ago quarter. For the quarter, net charge-offs were 3.18%. First quarter Financial Services revenue increased 6.5% over the year ago quarter. This increase was primarily driven by increases in interest and fee income, which was largely offset by increases in the provision for loan losses as well as interest expense. During the quarter, the allowance for loan losses was reduced by $6.2 million as compared to a reduction of $1.2 million in the same quarter a year ago. For the quarter, the reduction in the allowance for loan losses was due to improvements in the roll rates for early stage delinquencies from the end of the fourth quarter of 2016 to the end of the first quarter of 2017.

As a reminder, Cabela’s will not host a conference call with analysts and investors or provide guidance in connection with the results and does not plan to do so for future quarters while the acquisition of the Company by Bass Pro Shops is pending.

About Cabela’s Incorporated

Cabela’s Incorporated, headquartered in Sidney, Nebraska, is a leading specialty omni-channel retailer of hunting, fishing, camping, shooting sports, and related outdoor merchandise. Since the Company’s founding in 1961, Cabela’s® has grown to become one of the most well-known outdoor recreation brands in the world, and has long been recognized as the World’s Foremost Outfitter®. Cabela’s offers a wide and distinctive selection of high-quality outdoor products at competitive prices while providing superior customer service. Cabela’s also issues the Cabela’s CLUB® Visa credit card, which serves as its primary customer loyalty rewards program. Cabela’s stock is traded on the New York Stock Exchangeunder the symbol “CAB”.

Caution Concerning Forward-Looking Statements

This press release contains “forward-looking statements” that are based on the Company’s beliefs, assumptions, and expectations of future events, taking into account the information currently available to the Company. All statements other than statements of current or historical fact contained in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act. The words “believe,” “may,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “plan,” “confident,” and similar statements are intended to identify forward-looking statements. Forward-looking statements involve risks and uncertainties that may cause the Company’s actual results, performance, or financial condition to differ materially from the expectations of future results, performance, or financial condition that the Company expresses or implies in any forward-looking statements. These risks and uncertainties include, but are not limited to: the satisfaction of the conditions precedent to the consummation of the proposed merger by and among Bass Pro Group, LLC, Prairie Merger Sub, Inc., a wholly owned subsidiary of Bass Pro Group, LLC, and the Company, including, without limitation, the receipt of stockholder and regulatory approvals, including as a result of the inability of Synovus Bank to timely obtain regulatory approvals for its consummation of its purchase of the assets of World’s Foremost Bank; unanticipated difficulties or expenditures relating to the proposed merger; legal proceedings, judgments, or settlements, including those that may be instituted against the Company, the Company’s board of directors, executive officers, and others following the announcement of the proposed merger; disruptions of current plans and operations caused by the announcement and pendency of the proposed merger; potential difficulties in employee retention due to the announcement and pendency of the proposed merger; the response of customers, suppliers, business partners, and regulators to the announcement of the proposed merger; the state of the economy and the level of discretionary consumer spending, including changes in consumer preferences, demand for firearms and ammunition, and demographic trends; adverse changes in the capital and credit markets or the availability of capital and credit; the Company’s ability to successfully execute its omni-channel strategy; increasing competition in the outdoor sporting goods industry and for credit card products and reward programs; the cost of the Company’s products, including increases in fuel prices; the availability of the Company’s products due to political or financial instability in countries where the goods the Company sells are manufactured; supply and delivery shortages or interruptions, and other interruptions or disruptions to the Company’s systems, processes, or controls, caused by system changes or other factors; increased or adverse government regulations, including regulations relating to firearms and ammunition; the Company’s ability to protect its brand, intellectual property, and reputation; the Company’s ability to prevent cybersecurity breaches and mitigate cybersecurity risks; the outcome of litigation, administrative, and/or regulatory matters (including the ongoing audits by tax authorities and compliance examinations by the Federal Deposit Insurance Corporation); the Company’s ability to manage credit, liquidity, interest rate, operational, legal, regulatory capital, and compliance risks; the Company’s ability to increase credit card receivables while managing credit quality; the Company’s ability to securitize its credit card receivables at acceptable rates or access the deposits market at acceptable rates; the impact of legislation, regulation, and supervisory regulatory actions in the financial services industry; and other risks, relevant factors, and uncertainties identified in the Company’s filings with the SEC (including the information set forth in the “Risk Factors” section of the Company’s Form 10-K for the fiscal year ended December 31, 2016), which filings are available at the Company’s website at www.cabelas.com and the SEC’s website at www.sec.gov. Given the risks and uncertainties surrounding forward-looking statements, you should not place undue reliance on these statements. The Company’s forward-looking statements speak only as of the date they are made. Other than as required by law, the Company undertakes no obligation to update or revise forward-looking statements, whether as a result of new information, future events, or otherwise.

Investors:
Cabela’s Incorporated
Andrew Weingardt
308-255-7428

Media:
Cabela’s Incorporated
Nathan Borowski
308-255-2861

Source: Cabela’s Incorporated

Chipotle Off To A Good Start With First Quarter 2017 Results

DENVER, 2017-Apr-29 — /EPR Retail News/ — Chipotle Mexican Grill, Inc. (NYSE: CMG) today (Apr. 25, 2017) reported financial results for its first quarter ended March 31, 2017.

Overview for the first quarter of 2017 as compared to the first quarter of 2016:

  • Revenue increased 28.1% to $1.07 billion
  • Comparable restaurant sales increased 17.8% (including 0.6% from recognized revenue previously deferred related to Chiptopia)
  • Restaurant level operating margin increased to 17.7% from 6.8%
  • Net income was $46.1 million, improved from a net loss of $26.4 million
  • Diluted earnings per share was $1.60, improved from a diluted net loss per share of $0.88
  • Opened 57 new restaurants

“2017 is off to a strong start, as our restaurant managers and teams are energized by our renewed focus on the customer,” said Steve Ells, Founder, Chairman and CEO of Chipotle. “By simplifying the focus in our restaurants to only those elements that lead to a great guest experience, our operations have improved every single month, which gives us confidence that we are on our way to achieve our mission to ensure that great food made with whole unprocessed ingredients is accessible to everyone.”

First quarter 2017 results

Revenue for the quarter was $1.07 billion, up 28.1% from the first quarter of 2016. The increase in revenue was driven by comparable restaurant sales increases and to a lesser extent by new restaurant openings. Comparable restaurant sales increased due to improved customer traffic, reduced promotional activity, and increased average check. Comparable restaurant sales increased 17.8%, which included a benefit of 0.6% due to previously deferred revenue related to Chiptopia recognized during the quarter. We opened 57 new restaurants during the quarter and closed 15 ShopHouse Southeast Asian Kitchen restaurants and one Chipotle restaurant. Our total restaurant count as of the end of the quarter was 2,291.

Food costs were 33.8% of revenue, a decrease of 150 basis points compared to the first quarter of 2016. The decrease was primarily driven by lower food waste and testing costs, and bringing the preparation of lettuce and bell peppers back to our restaurants. This decrease was partially offset by higher avocado prices.

Restaurant level operating margin was 17.7% in the quarter, an increase from 6.8% in the first quarter of 2016. The increase was primarily driven by sales leverage, lower marketing and promotional spend, efficiencies in labor, and lower food costs. The restaurant level operating margin also benefited by 0.15% from sales leverage related to recognizing revenue previously deferred from Chiptopia, slightly offset by free catering discounts for Chiptopia.

General and administrative expenses were 6.5% of revenue for the first quarter of 2017, a decrease of 90 basis points from the first quarter of 2016. In dollar terms, general and administrative expenses increased $7.4 million compared to the first quarter of 2016 due to increased non-cash stock based compensation and bonus expense, partially offset by lower legal and travel costs. Excluding stock based compensation, general and administrative expenses during the quarter were flat in dollar terms compared to last year. Stock compensation expense was higher during the first quarter of 2017 because the first quarter of 2016 included a reduction in expense for performance awards that were no longer expected to vest against performance criteria. Without this reduction, stock compensation expense was consistent in both years.

Net income for the first quarter of 2017 was $46.1 million, or $1.60 per diluted share, compared to net loss of $26.4 million, or a loss of $0.88 per diluted share, in the first quarter of 2016.

Outlook

For the full year of 2017, management is targeting the following:

  • Comparable restaurant sales increases in the high-single digits
  • 195 – 210 new restaurant openings
  • An estimated effective full year tax rate of approximately 39.0%

Definitions

The following definitions apply to these terms as used throughout this release:

Comparable restaurant sales, or sales comps, represent the change in period-over-period sales for restaurants in operation for at least 13 full calendar months.

Comparable restaurant transactions represent the change in period-over-period transactions, including transactions with no sales dollars due to promotional discounts, for restaurants in operation for at least 13 full calendar months.

Restaurant level operating margin represents total revenue less restaurant operating costs, expressed as a percent of total revenue.

Conference Call

Chipotle will host a conference call to discuss the first quarter 2017 financial results on Tuesday, April 25, 2017 at 4:30 PM Eastern time.

The conference call can be accessed live over the phone by dialing 1-877-451-6152 or for international callers by dialing 1-201-389-0879. The call will be webcast live from the company’s website on the investor relations page at ir.chipotle.com. An archived webcast will be available approximately one hour after the end of the call.

About Chipotle

Steve Ells, founder, chairman and CEO, started Chipotle with the idea that food served fast did not have to be a typical fast food experience. Today, Chipotle continues to offer a focused menu of burritos, tacos, burrito bowls, and salads made from fresh, high-quality raw ingredients, prepared using classic cooking methods and served in an interactive style allowing people to get exactly what they want. Chipotle seeks out extraordinary ingredients that are not only fresh, but that are raised responsibly, with respect for the animals, the land, and the people who produce them. Chipotle prepares its food without the use of added colors, flavors or preservatives typically found in fast food. Chipotle opened with a single restaurant in Denver in 1993 and operates more than 2,300 restaurants. For more information, visit chipotle.com.

Forward-Looking Statements

Certain statements in this press release, including statements under the heading “Outlook” of our expected comparable restaurant sales increases, number of new restaurant openings, and effective tax rate for 2017 are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. We use words such as “anticipate,” “believe,” “could,” “continue,” “should,” “estimate,” “expect,” “intend,” “may,” “predict,” “project,” “target,” and similar terms and phrases, including references to assumptions, to identify forward-looking statements. The forward-looking statements in this press release are based on information available to us as of the date any such statements are made and we assume no obligation to update these forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those described in the statements. These risks and uncertainties include, but are not limited to, the following: the uncertainty of our ability to achieve expected levels of comparable restaurant sales due to factors such as changes in consumers’ perceptions of our brand, including as a result of food-borne illness incidents beginning in late 2015, the impact of competition, including from sources outside the restaurant industry, decreased overall consumer spending, or our possible inability to increase menu prices or realize the benefits of menu price increases; the risk of food-borne illnesses and other health concerns about our food or dining out generally; factors that could affect our ability to achieve and manage our planned expansion, such as the availability of a sufficient number of suitable new restaurant sites and the availability of qualified employees; the performance of new restaurants and their impact on existing restaurant sales; increases in the cost of food ingredients and other key supplies or higher food costs due to new supply chain protocols; the potential for increased labor costs or difficulty retaining qualified employees, including as a result of market pressures, enhanced food safety procedures in our restaurants, or new regulatory requirements; risks related to our marketing and advertising strategies, which may not be successful and may expose us to liabilities; security risks associated with the acceptance of electronic payment cards or electronic storage and processing of confidential customer or employee information; risks relating to our expansion into new markets; the impact of federal, state or local government regulations relating to our employees, our restaurant design, or the sale of food or alcoholic beverages; risks associated with our Food With Integrity philosophy, including supply shortages and potential liabilities from advertising claims and other marketing activities related to Food With Integrity; risks relating to litigation, including possible governmental actions related to food-borne illness incidents, as well as class action litigation regarding employment laws, advertising claims or other matters; risks relating to our insurance coverage and self-insurance; our dependence on key personnel and uncertainties arising from recent changes in our leadership; risks regarding our ability to protect our brand and reputation; risks associated with our ability to effectively manage our growth; and other risk factors described from time to time in our SEC reports, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, all of which are available on the investor relations page of our website at ir.chipotle.com.

Contact:
Mark Alexee
303-605-1042
malexee@chipotle.com

Source: Chipotle Mexican Grill, Inc.