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1335 Morningside Ave.
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     Volume 14, Issue 44, November 20, 2014   


Inside This Issue:

• Join Us in Montreal at the Industry Cocktail – December 9th 
• Target Q3 Results Beat Market Expectations, Canada Shows Improvement 
• Lowe’s Beats Street 3Q Forecasts, Raises Full-Year Outlook
• Home Depot Exceeds Q3 Profit and Revenue Expectations
• Sears Canada Loss More Than Doubles in Q3, While Sales Fall 10% 
• Sears Canada In It for the Long-Run, Says New CEO
• Walmart Canada Reports Gains in Q3; Announces Head Office Cuts
• Wal-Mart Reports Higher Than Expected Q3 Profit But Anticipates Competitive Q4
• Hudson's Bay Takes a Chance on a New Voice to Sell Its Brand
• Nordstrom Reports Higher Q3 Sales and Profit; Calgary Store Exceeding Expectations
• Canadian Home Resales Edge Higher, Strongest October Since 2009 Led by Major Cities
• Nearly 9 in 10 Canadians Shopping North of the Border This Holiday Season 
• Latest U.S. Economic News 
                         

Follow us on Twitter @theCHHMA    


                              Association News

                           

Join Us in Montreal at the Industry Cocktail – December 9th      
  
A number of personnel from BMR and RONA among other retailers will be attending this year’s Industry Cocktail on Tuesday, December 9, from 5:30 p.m. to 8:30 p.m., at the Bar Dame de Coeur at the Casino de Montreal.


So join your industry colleagues and customers for the annual industry year-end celebration.

The location offers a fun and relaxing atmosphere where you can enjoy some wonderful food, drinks and conversation with friends from the industry while enjoying the festive season together.

We look forward to seeing you there.
 
Click here for further details and to register.   
                                                 



                                 Industry News

Target 3Q Results Beat Market Expectations But Canadian Division Still Needs to Improve   
 
Target Corp. posted third-quarter earnings that beat analysts’ estimates after U.S. sales grew faster than expected. However, although the Canadian division showed progress, results still remain unacceptable according to senior management.  

“We’re encouraged by the improving trend we’ve seen in our U.S. business throughout the year, and our fourth-quarter plans are designed to sustain this momentum,” CEO Brian Cornell said in the statement. “In Canada, we’ve made improvements to our operations, pricing and assortment in time for the holiday season, and we’re eager to measure how our guests respond.”

“The results in Canada remain unacceptable,” John Mulligan, chief financial officer of Target, told a Canadian media conference call on Wednesday morning. “We need to see a step-change in performance there. We still have a lot of work to do.”  Mr. Mulligan would not predict when the 133 stores in Canada would turn a profit, even though the discount retailer reported that its third quarter operating loss narrowed from a year earlier while sales at existing stores rose.

“All the stores in Canada are performing well below our expectations – well below,” Mr. Mulligan said.  Read More >> 
  


                                                                          
Lowe’s Beats Street 3Q Forecasts, Raises Full-Year Outlook         
 
Lowe's Companies, Inc. reported on Wednesday net earnings of $585 million for the third quarter ended Oct. 31, a 17.3% increase over the same period a year ago. Diluted earnings per share increased 25.5% to $0.59 from $0.47 in the third quarter of 2013. The results exceeded Wall Street expectations. The average estimate of analysts surveyed by Zacks Investment Research was for earnings of 58 cents per share.  The company raised its full-year profit and sales forecast as an improving job market encourages home owners to increase spending on renovations. Read More >>
                       


Home Depot Exceeds Q3 Profit and Revenue Expectations

Home Depot Inc. reported a better-than-expected quarterly profit on Tuesday as an improving job market encouraged Americans to spend more on renovations.  The company reaffirmed its 2014 sales growth forecast of about 4.8% and profit forecast of $4.54 per share but said that it could not account for all possible losses from a massive data breach it revealed in September that affected 56 million debit and credit cards. For now, the company is putting those costs at $34-million as it pertains to its guidance for 2014. The company said it may face other breach-related costs, including legal action that could have a material impact on results for the fourth quarter and future periods. 

The retailer is facing at least 44 civil lawsuits related to the breach in the United States and Canada.  Read More >>
    


Sears Canada Loss More Than Doubles in Q3, While Sales Fall 10%

Sears Canada Inc. reported on Tuesday that the company had a $118.7 million net loss in its fiscal third quarter, more than double the national retailer’s comparable loss last year, as same-store sales and total revenue dropped and the bottom line felt a bigger impact from income taxes and asset write-downs.  The loss for the 3 months ended Nov. 1 amounted to $1.16 per share, compared with 2013 third-quarter net loss of $48.8 million or 48 cents per share.  

It’s the first financial report from Sears Canada since the appointment of Ronald Boire as acting chief executive officer. He stepped in after Douglas Campbell announced in September that he would leave the company and return to the U.S. by the end of the year for personal reasons.  Boire said the third-quarter results were disappointing but the Sears Canada management team is focused on building its relationship with consumers by providing “great fashionable product made of high quality at affordable prices.”

“The company has done well at managing expenses year to date and maintaining a strong balance sheet, and we are now working at growing our top line to have our sales match the high level of loyalty and support that Canadians have for the Sears brand,” Boire said in a statement.   Read More >>
  
          


Sears Canada In It for the Long-Run, Says New CEO

The new CEO of Sears Canada wants to make it clear: the department store chain is not dead, and rumours about its inevitable demise are baseless. Ronald Boire was named acting chief executive of the struggling Canadian chain a month ago after Douglas Campbell announced his departure from Sears Canada after a one-year tenure, citing family reasons.

The fourth CEO in three years, Mr. Boire’s move into the top Canadian seat comes at a turbulent time for cash-strapped U.S.-based Sears Holdings, which had just announced it would offer up its stake in Sears Canada to its own shareholders in a rights offering aimed at raising US$380-million.

The deal, completed last week, means that the U.S. retailer is no longer a majority owner of the Canadian operation, but Sears Holdings’ majority owner and CEO, controversial hedge fund owner Edward Lampert, now is, with about 47% of the company’s shares. 

“We aren’t going anywhere,” Mr. Boire said in an interview with The Financial Post at the retailer’s head office last Wednesday, but the former head merchant at Sears and Kmart was not surprised by the question. “I think there is some of that [fear] out there, but by and large — and I get letters every day, the good and the bad — the Canadian consumer loves this brand, and loves this company.”   Read More >>   
      



Walmart Canada Reports Gains in Q3; Announces Head Office Cuts
 
Expanding grocery departments at stores has paid off well for Walmart Canada, boosting performance in the latest quarter.

“I’m especially pleased by the sales and profit improvements this quarter in Canada, both sequentially and over last year. The investments we’ve made to remodel our stores and drive supercentre expansion are resonating with customers,” said Doug McMillon, Wal-Mart Stores Inc. president and chief executive officer, during the firm’s third-quarter report.  

As reported last week by the Globe and Mail, Walmart Canada has indeed announced this week that the company has cut 210 jobs as it moves to streamline its operations in an increasingly crowded retail landscape. The retailer on Tuesday confirmed it made some “organizational changes” to its Mississauga head office and other management structures, resulting in the cuts. In all it has about 1,400 employees at its headquarters.   Read More >>


                                                                        
Wal-Mart Reports Higher Than Expected Q3 Profit But Anticipates Competitive Q4

Wal-Mart Stores Inc. reported last Thursday a higher-than-expected profit as same-store sales at its U.S. stores rose for the first time in seven quarters, helped by its small-format 'Neighborhood Market' stores and higher prices. The world's largest retailer said overall U.S. same-store sales rose 0.5% in the third quarter.  

Wal-Mart has been facing sluggish sales in the United States as its core low-income customers struggle with stagnant wage growth and higher taxes. A cut in government food stamp benefits has also reduced their spending power.  Net profit attributable to Wal-Mart fell marginally to $3.71 billion, or $1.15 per share, for the quarter ended Oct. 31, from $3.74 billion, or $1.14 per share, a year earlier. 

The retailer’s fourth-quarter profit outlook missed Wall Street expectations because of  expected fierce holiday discounting.   Read More >>


  

Hudson's Bay Takes a Chance on a New Voice to Sell Its Brand

For five years, Bonnie Brooks was the Voice.  During her time as CEO of the Hudson’s Bay Company, Ms. Brooks’ low, smoky voice became intimately associated with the Bay brand. In a series of radio ads, she intoned about fragrances, housewares and designer threads at The Room. Though she was unseen, she helped to build the Bay’s image as she oversaw major changes at the retailer. 

President Liz Rodbell made her debut last week in ads for the Bay’s seasonal “one-day sale” campaign. More than 16 million Canadians were expected to hear her American accent on 115 stations across the country. As Ms. Brooks did before her, Ms. Rodbell will tout a different promotion every day until Dec. 23, attempting to lure customers to the stores during the crucial holiday shopping season.    Read More >>

  


Nordstrom Reports Higher Q3 Sales and Profit; Calgary Store Exceeding Expectations
               
Sales and profit for Nordstrom rose in the third quarter, a sign that retailers with a more affluent clientele have had greater success navigating tough economic conditions that have hurt some retailers.  Just seven weeks in, the performance of Nordstrom Inc.’s first Canadian store, in the Chinook Centre in Calgary, has “significantly exceeded expectations,” according to company president Blake Nordstrom.  

“The warm reception we’ve received from the customers in Calgary is encouraging,” said the executive in an earnings call last Thursday. “We believe we’re going in the right direction.’’

The American retail chain is on track to open a second store in Ottawa (requiring the hiring of 400 local employees) in March, followed by four more in Canada by 2017.    Read More >>    
                 


  

                                 Economic News

  Canadian Home Resales Edge Higher, Strongest October Since 2009 Led by Major Cities 
 
According to statistics released on Monday by the Canadian Real Estate Association (CREA), national home sales activity edged higher on a month-over-month basis in October 2014.  The latest numbers from CREA show, again, that Vancouver, Calgary and Toronto are driving the gains, though they do extend beyond those three hot markets.  

The number of home sales processed through the MLS Systems of Canadian real estate Boards and Associations edged up 0.7% in October 2014 compared to September. This marks the sixth consecutive month of stronger resale housing activity compared to a quiet start to the year, and the strongest activity for the month of October since 2009.

Meanwhile, actual (not seasonally adjusted) sales in October stood 7.0% above levels reported in the same month last year.   Read More >>      


  

 Nearly 9 in 10 Canadians Shopping North of the Border This HolidaySeason

Canadians are taking the classic carol "I'll Be Home for Christmas" to a whole new level this season.  According to the latest consumer trends survey from digital offers website RetailMeNot.ca, 87% of Canadians will shop for most of their holiday gifts in-store at Canadian retailers, and 21% will shop for most gifts online with Canadian e-tailers this holiday season.  

A RetailMeNot.ca survey released last week showed that 44% per cent of shoppers indicated that they do less holiday shopping in the U.S. now that Black Friday and Cyber Monday are in Canada. “Unfortunately, many Canadians don't know how to take full advantage of pre-holiday savings," says Angela Self, co-founder of Smart Cookies, the daily guide to living a sweet life debt-free. "Only 29% of Canadians are planning to shop online during Cyber Monday, which is much lower than our savvy neighbours to the south, where 47% of Americans plan on snagging sales on Cyber Monday."   Read More >> 


   
Latest U.S. Economic News 
 
U.S. housing starts unexpectedly fell in October, but a jump in permits to near a 6-1/2-year high suggested the housing market was steadily regaining strength. 

U.S. retailers reported strong sales in October, a sign American consumers were spending with more gusto and could help keep the economy growing at a brisk pace.  U.S. retail sales rose a higher-than-expected 0.5% last month when stripping out volatile elements like gasoline, autos, building materials and food services, according to the Commerce Department data released last Friday. 

U.S. consumer sentiment rose in November to a more than seven-year high as falling unemployment and lower gasoline prices boosted views on both current conditions and expectations, a survey released last Friday showed.   Read More >>  

Upcoming CHHMA Events 

                              
Industry Cocktail
Tuesday, December 9, 2014
Casino de Montreal, Montreal, Quebec

Canada Night
Held in Conjunction with the International Home+Housewares Show
Sunday, March 8, 2015
InterContinental Hotel, Chicago, Illinois

CHHMA Spring Conference & AGM
Wednesday, April 8, 2015
International Centre (Conference Facility), Mississauga, Ontario

CHHMA Maple Leaf Night
Held in Conjunction with the National Hardware Show
Tuesday, May 5, 2015
The Mirage Hotel & Casino, Las Vegas, Nevada

CHHMA Ontario Golf Tournament
Tuesday, May 26, 2015
Angus Glen Golf Club, Markham, Ontario

CHHMA Quebec Golf Classic
Thursday, May 28, 2015
Club de golf Le Fontainebleau, Blainville, Quebec               
                              
               

To register for all events visit our website at www.chhma.ca or call Pam Winter at (416) 282-0022 Ext. 21

 


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"Eye On Our Industry" is published by the CHHMA as an information resource for our members. Member input regarding content and format is welcomed. Please contact Michael Jorgenson by email: mjorgenson@chhma.ca or call (416) 282-0022, ext. 34.

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Canadian Hardware & Housewares Manufacturers Association | 1335 Morningside Ave., Suite 101, Scarborough, ON M1B 5M4
Telephone: (416) 282-0022   Email: pwinter@chhma.ca