May 28, 2020
Yesterday, Tuesday Morning filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the Northern District of Texas. The proceedings have been designated as case number 20-31476. Management said the goal is to “reduce outstanding liabilities and strengthen the overall financial position to provide an opportunity to continue navigating the COVID-19 pandemic and emerge as a stronger company by early fall 2020.” The Company has obtained a commitment from its existing lender group to provide $100.0 million of DIP financing. As required by the DIP agreement, the Company must also obtain a commitment for up to $25.0 million of additional financing, which it is negotiating.
Following the temporary closure of all stores as a result of COVID-19, Tuesday Morning has reopened more than 80% of its existing footprint to date, and it expects to continue store re-openings and bringing back associates to work over the coming weeks. Since it began reopening its stores on April 24, comps for the reopened stores have been 10% higher than sales during the same period in FY19.
The Company anticipates permanently closing approximately 230 of its 687 stores (identified as underperforming or in oversaturated markets) to focus on high-performing locations; it will do this with a phased approach over the summer. It has requested Court approval to close at least 132 locations in a first phase and, eventually, the distribution center in Phoenix, AZ that supports these stores. Tuesday Morning said it plans to attempt to renegotiate a significant number of leases during this process. Of the remaining 555 stores, the Company plans to exit 100 additional locations, leaving a go-forward footprint of approximately 450 stores. Click here for a list of future closings.
Eight potential buyers are interested in acquiring Stage Stores as a going concern, opening the door to a possible reorganization of the business, according to a lawyer for the Company. The remarks were made during a status conference as part of the bankruptcy proceedings. He said that the potential buyers are interested in keeping about 200 to 500 of the Company’s more than 700 stores, as well as some distribution centers and possibly even the headquarters. He added that another four parties are interested in buying certain assets, such as the intellectual property, customer data, and specific real estate. When the Company filed for bankruptcy its stated goal was to simultaneously: (i) solicit bids for a going concern sale of the business or any of its assets, and (ii) initiate an orderly wind-down of operations. The wind-down will terminate at certain locations if the Company receives a viable going-concern bid.
The Debtors filed a motion to set July 17 as the last date to file proofs of claim, including requests for payment under Section 503(b)(9). The U.S. Trustee appointed the Committee of Unsecured Creditors, which includes the following members: Seven Apparel Group, Inc.; Nike USA, Inc.; Specialty Store Services, Inc.; Adobe Systems, Inc.; Enchante Accessories, Inc.; Skechers USA Inc.; and Regency Commercial Associates LLC.
On May 22, the Debtors filed a Disclosure Statement and Plan of Reorganization. Holders of general unsecured claims will receive a pro rata share of cash remaining after senior classes of claims are paid. The recovery for allowed general unsecured claims is projected to be “less than 1%.” A hearing to consider approval of the Disclosure Statement is scheduled for June 30. However, considering the ongoing bidding and potential reorganization, a revised Plan will likely be filed. Click here for a list of closures.
J.C. Penney Company, Inc. said it has reopened another 150 stores in 27 states following the temporary nationwide closures prompted by the coronavirus pandemic. This brings the total stores reopened to 304, or about one-third of its fleet in the U.S. The Company plans to have nearly 500 stores reopened by June 3.
In a May 20 SEC filing, Village Super Market (a Wakefern member) stated that it completed its acquisition of five supermarkets, a distribution center, and the intellectual property of Fairway Group Holdings Corp. including the names “Fairway” and “Fairway Markets” on May 14. Village paid $73.2 million for the assets, net of adjustments identified in the asset purchase agreement; it also assumed liabilities arising from acquired leases. Village said the purchase price was funded with borrowings under its unsecured revolving line of credit and an unsecured term loan.
According to published reports, Amazon is in advanced talks to buy self-driving startup Zoox Inc. The deal under discussion reportedly puts Zoox lower than the $3.20 billion valuation it last achieved in a funding round in 2018. In a recent statement, Zoox said that it “has been receiving interest in a strategic transaction from multiple parties and has been working with Qatalyst Partners to evaluate such interest.”
In February 2019, Amazon participated in a $530.0 million funding round for Aurora and led a $700.0 million funding for Rivian, both working on developing self-driving technology.
On May 22, Bed Bath & Beyond announced plans to reopen approximately 600 additional stores by June 13, including 500 Bed Bath & Beyond, 50 Christmas Tree Shops, and 50 Cost Plus World Market stores. This is in addition to the buybuy Baby and Harmon Face Value stores that remained open as essential retailers during the pandemic. In total, 50% of the Company’s fleet is expected to be open by June 13. The Company now provides contactless curbside pickup services at 90% of its stores in the U.S. and Canada, and it is bringing back 11,000 associates from furlough. Online sales remain robust, with website and mobile traffic rising 30% in recent weeks. Click here to request a list of closures.
Walmart accelerated the planned integration of its flagship mobile app and the Walmart Grocery app. The combined app is now live, providing a one-stop app experience for shoppers looking to purchase both consumables and general merchandise. Initially, plans called for the integrated app to roll out in phases and for the Walmart Grocery app to be deactivated this summer. The Company commented that the change in shopping behavior during COVID-19 has moved up that timetable.
In other news, Walmart entered into a partnership with thredUP, an online resale platform for fashion and accessories. The partnership will provide Walmart customers access to 750,000 pre-owned items across women’s and children’s clothing, accessories, footwear and handbags. Financial terms of the partnership were not disclosed. Click here to request a list of future openings and closings.
Wawa’s estimated sales were up about 2% in 2019, reflecting the benefits of an increased store count (up 50 net to a total of 880 at the end of fiscal 2019), offset somewhat by lower average retail prices for gasoline ($2.57 in 2019 vs. $2.70 in 2018) and fewer average miles driven. However, the COVID-19 pandemic has negatively impacted the Company’s in-store traffic, as consumers are abiding by stay-at-home orders in most states. Plans are to open about 60 new stores and remodel roughly 50 existing units in 2020, though the impact of COVID-19 may delay or postpone some of those projects. In November, Wawa announced plans for expansion in Maryland, noting five sites in Baltimore County. The Company entered Florida in 2012, currently operates about 205 stores there, and is opening additional stores in the state at a rate of roughly 30 per year.
Macy’s expects 1Q20 sales (for the period ended May 2) to be $3.00 billion – $3.03 billion, down from $5.50 billion in 1Q19. The Company projects an operating loss of $905.0 million – $1.11 billion, compared to an operating profit of $203.0 million in 1Q19. It ended the quarter with $1.50 billion of cash (revolver availability was drawn down in April to provide flexibility during the pandemic) compared to total liquidity of $2.24 billion at the end of 1Q19. Total debt increased to $5.66 billion from $4.72 billion in the same period last year.
In other news, Macy’s is offering $1.10 billion of Senior Secured Notes due 2025 in a private offering. The Company intends to use the proceeds, along with cash on hand, to repay all amounts outstanding under its revolving credit facility ($1.50 billion as of May 2). The Notes will be secured on a first-priority basis by (i) a first mortgage/deed of trust in certain real property of subsidiaries of Macy’s that has been or will be transferred to subsidiaries of Macy’s Propco Holdings, LLC, a newly created direct, wholly owned subsidiary of Macy’s, and (ii) a pledge by Propco of the equity interests in its subsidiaries that own or will own such transferred real property. The Notes will be unconditionally guaranteed on an unsecured basis by Macy’s Retail Holdings, Inc., a direct, wholly owned subsidiary of Macy’s, Inc. The closing of this offering is conditioned upon the closing of a new asset-based credit agreement (expected to occur shortly). The Company reported that as of May 2 it had approximately $1.50 billion of cash.
Macy’s began reopening stores on May 4 and, as of last week, had approximately 190 Macy’s and Bloomingdale’s stores open in their full formats (28% of the store base). Another 80 Macy’s stores opened over Memorial Day weekend.
Macy’s also announced that Felicia Williams, who currently serves as SVP, controller and enterprise risk officer, will become interim CFO until a permanent replacement is named. As previously announced, CFO Paula Price made the decision to leave the Company at the end of the month. She will remain as an advisor through November. Ms. Williams has served in her current role since 2016. Previously, Ms. Williams was a VP, responsible for enterprise risk and internal audit.
Wegmans said it would now give a targeted timeframe for when a new location will open. The Company has announced plans to open three stores this year, in Harrison, NY; West Cary, NC; and Tysons Corner, VA. In late March, Wegmans said it was postponing the opening of the 121,000 square-foot Harrison store from June 7 to a future date. The opening date for the 103,000 square-foot West Cary store continues to be set for August 2, while the 80,000 square-foot Tysons Corner store is expected to open this fall. Click here to request a list of future openings.
J.Jill plans to reopen stores, as guidance from government and health authorities permits. As a first step, the Company reopened 10 stores in Texas for curbside pickup on May 15. J.Jill will also offer services including virtual shopping and styling advice, and in-store personal shopping by appointment in select locations. To create a safer shopping experience, the Company will also be sanitizing its stores with increased frequency throughout the day. J.Jill has 287 stores.
On May 11, Boscov’s announced it would begin reopening some of the 50 department stores it temporarily closed on March 17. As of May 26, 14 stores in Connecticut, Maryland, Ohio and Pennsylvania are open, and another nine in Delaware, Maryland and Pennsylvania are due to open in the next week; 27 locations in New York, New Jersey, Pennsylvania, Maryland and Rhode Island remain closed.
Meanwhile, Boscov’s is using Moxie’s customer engagement platform with returning online customers, in an effort to create an online version of human greeters at brick-and-mortar big-box stores. Moxie’s analytics is used to determine if a visitor to its e-commerce site has added an item to their cart on a previous visit but did not purchase. When the customer returns to the site, they are greeted with a conversational offer and a link to take them back to their cart to continue their journey. The Company reported that conversational offers to returning customers boosted its conversion rate of store customers buying online.
Schnuck Markets is introducing a new store format in Columbia, MO, focused on health and wellness as well as natural foods, dubbed EatWell, A Natural Food Store by Schnucks. The 42,000 square-foot store will open in the coming weeks in a former Lucky’s Market that Schnucks purchased during a bankruptcy auction earlier this year.
The Buckle began reopening certain stores during the week of April 26. There were 37 stores reopened as of May 2, and as of May 22, 331 stores (almost 75% of the fleet) were reopened. The Company expects to have 90% of its fleet open by June 1. The Buckle operates 446 locations.
Nordstrom announced it would permanently close its three Jeffrey designer apparel stores in Atlanta, GA; New York, NY; and Palo Alto, CA. The Company bought a majority interest in Jeffrey in 2005 and hired founder Jeffrey Kalinsky as director of designer merchandising. Mr. Kalinsky is retiring as designer fashion director. Click here for a list of future closures.
Last Thursday, Grocery Outlet opened a new Bargain Market store in North Napa, CA, in a former Vallerga’s grocery store. Click here for a list of future openings.
PGA Tour Superstore opened its 43rd location on May 19 in Palm Beach Gardens, FL in a 38,000 square-foot space previously occupied by Toys “R” Us. President and CEO Dick Sullivan reportedly said the Company might further capitalize on shuttered stores, citing major retailers Nordstrom and J.C. Penney, DIP, which have announced hundreds of store closures. The Company continues to work toward its goal of opening at least 50 locations by the end of 2021. The next store due to open is in Columbus, OH in mid-July, with a couple more expected before year end.
After being temporarily closed for about a month and a half, PGA Tour has reopened roughly 80% of its stores. Mr. Sullivan said the Company’s sales trend has been strong this month and that “with 20% less stores, we’re almost doing the same amount of business that we did last year.” Two stores in Myrtle Beach, SC were the first to reopen in April, and business at the time was down 50%. The Company instituted a new position at each opened store called a “starter,” responsible for directing customers under the new modifications, which include hand sanitizer, masks, gloves, plexiglass, etc. Mr. Sullivan indicated that “people want to touch and feel our products,” and therefore extra precautions are necessary.
Lidl is held a soft opening yesterday (May 27) at its new supermarket in Suwanee, GA, marking its 100th U.S. store. Including Suwanee, Lidl US has a total of six stores in Georgia and is building a regional distribution center in Covington, GA. Click here to request a list of future openings.
JackRabbit has reopened 41 of its 63 stores to date, and it continues to offer concierge services (curbside pickup where available, as well as phone orders and virtual fittings) at most locations. The Company has warned customers about processing and shipping delays due to COVID-19. With stores closed, the chain experienced a significant increase in online orders, and it has been using its stores as distribution centers to fulfill these orders. Because it is currently operating at much less capacity in all locations, the speed at which it can process orders has slowed. In addition, the Company warned that it may be temporarily out of stock on certain items.
On May 21, lululemon athletica inc. announced that it would reopen stores in select locations where it is permitted to do so. Store re-openings will be reviewed on a week-by-week and market-by-market basis. As of May 21, over 150 locations across North America, Europe, Asia, New Zealand, and Australia were reopened, with approximately 200 additional locations set to reopen in the next two weeks. The Company will conduct a phased reopening approach and incorporate key learnings from its successful reopening in Greater China. Lululemon operates 478 stores.
BJ’s Wholesale Clubs remained open during the pandemic. The Company turned in a strong 1Q, fueled by the early buying during the crisis; revenue was up 20.8% on 27% comp growth (excluding fuel). Membership revenue jumped 8.4%, with consumers looking to buy in bulk to eliminate unnecessary trips to stores. The digital channel grew 375%, as BJ’s expanded its BOPIS and delivery options. The Company estimates it spent an additional $51.0 million during the quarter on COVID-19-related expenses, including wages and preventative measures. Click here for a list of future openings.
Raley’s opened a new 35,000 square-foot store in Bel Air, CA on May 20. The store offers online ordering, personal shopping, and pickup service.
Earning Reports
Target announced strong 1Q results (period ending May 2), including revenue growth of 11.3% and a 10.8% comp improvement. The Company’s stores remained open during the quarter, with grocery and other essentials driving the growth. The comps reflected consumer concerns; average ticket jumped 12.5%, while traffic fell 1.5%. Most of the comp growth was driven by the digital channel, which contributed 9.9% of the improvement, with brick and mortar contributing 0.9%. Target stores fulfilled 80% of digital orders. Click here to request a copy of the 1Q Sales Report.
Like other essential retailers, margins were stressed due to the higher sales of lower margin grocery and other essentials; gross margin compressed 450 bps. This reflected not only higher sales of lower-margin items, but higher digital fulfillment and supply chain costs as well as inventory impairments on discretionary items such as apparel and accessories due to the sudden slowdown. Target, like many other retailers, took advantage of low interest rates and shored up liquidity with $2.50 billion in new bonds and a new $900.0 million, 364-day revolver.
In other news, Target has become the first mass retailer to make products available through Instagram Checkout. This allows customers to buy products displayed in @Target and @TargetStyle posts directly through Instagram, without having to leave the social media site.
Ross Stores’ 1Q20 sales (for the period ended May 2) dropped 51.5% to $1.84 billion. The Company temporarily closed all 1,566 stores on March 20, and they remained shuttered through the end of the quarter. Ross began to reopen stores on May 14, and now has about 700 locations open (the remaining stores are expected to open in the coming weeks). Ross does not have an online business. The Company took a $313.0 million inventory valuation charge as a result of the store closures. However, the Company expects to sell the inventory in the 2Q. As a result, EBITDA fell deep into negative territory at $372.0 million. In response to the COVID-19 pandemic, the Company drew down the full $800.0 million available from its revolving credit facility, entered into a new $500.0 million unsecured 364-day credit agreement, issued $2.00 billion of senior notes, and aggressively cut costs. Management is currently negotiating with landlords regarding rent mitigation. The Company burned $1.20 billion in 1Q20 but ended the quarter with $2.67 billion of cash and full availability under its $500.0 million 364-day credit facility. Click here to request a copy of the 1Q Sales Report.
Shoe Carnival’s 1Q sales (for the period ended May 2) dropped 41.9% to $147.5 million, and comps plummeted 42.3%. Comps had been up 3.9% through March 12, prior to when the Company began experiencing the effects of COVID-19. E-commerce sales increased more than 160% during the quarter and 250% while the stores were closed (Shoe Carnival did not provide percentage of total sales). Gross margin fell 830 basis points to 21.3%. Merchandise margin decreased 1.9% due to higher shipping costs associated with e-commerce sales, and buying, distribution and occupancy expenses, which are generally fixed costs, increased 6.4% due to the deleveraging effect of lower sales. The Company recorded an operating loss of $23.3 million, compared to a profit of $15.6 million in the prior-year period. As of May 2, cash and cash equivalents were $13.1 million and no cash borrowings were outstanding on the Company’s recently amended $100.0 million line of credit.
Shoe Carnival temporarily closed all 390 of its stores on March 19, and between late April and May 5, more than 50% of stores reopened in states where restrictions were lifted. No employees were furloughed during the quarter. As of May 20, 318 stores were open, representing 82% of store locations. The Company expects to have more than 95% of its stores open by the second week of June.
Hibbett Sports’ 1Q sales (for the period ended May 2) decreased 21.4% to $269.8 million, and comps fell 19.5%, compared to a 5.1% increase last year. The Company’s store fleet was open for approximately 60% of total available selling days in the quarter. The Company said a large number of stores were closed or limited to curbside pickup, which began in March. Hibbett Sports and City Gear stores began to reopen to customer traffic towards the end of April. E-commerce sales jumped 110.5% and represented 22.3% of total sales. More than 40% of online sales in the second half of the quarter were new customers. Gross margin fell 700 basis points to 27.5%, driven by the significant mix shift toward e-commerce sales, which carry a lower margin due to incremental shipping costs. As a result, the Company recorded an operating loss of $2.4 million, excluding a $19.7 million goodwill impairment charge, compared to a profit of $37.3 million last year. At the end of the quarter, nearly 700 stores had reopened; as of May 26, more than 1,000 of its 1,078 stores are open. Hibbett indicated that many stores reported significant comp increases upon reopening. Click here to request a copy of the 1Q Sales Report.
The Cato Corporation’s 1Q sales (for the period ended May 2) decreased 56.3% to $100.7 million. Comps dropped 56%. Gross margin decreased 24.9% to 15.4%, and SG&A margin increased 24.2% to 53.1%, due to a reduction in merchandise contribution, combined with the effects of deleveraging resulting from the sales decline. Loss before income taxes was $37.5 million, compared to EBIT of $25.6 million last year. The Company’s 1,300 stores temporarily closed on March 19, and 700 of those stores reopened by May 1. As of May 21, 1,175 reopened, with the remaining 124 units expected to open by early June. During the quarter, Cato opened 24 new stores and permanently closed five underperforming locations.
Urban Outfitters’ 1Q sales (for the period ended April 30) decreased 31.9% to $588.5 million, and comps were down 28%, as stores were closed for half of the 1Q. E-commerce sales grew in the low double-digit range. By brand, comps decreased 19% at Free People (18.3% of total sales), 24% at Urban Outfitters (40.3% of total sales), and 33% at Anthropologie (39.8% of total sales). Gross margin decreased to 2% from 31.1% due to significant store occupancy deleverage, an inventory reserves increase, higher delivery expenses, and higher merchandise markdowns. Loss before income taxes was $198.6 million, compared to EBIT of $42.7 million last year. The Company recorded a $14.5 million provisional store impairment charge and a $43.3 million year-over-year increase in inventory obsolescence reserves. The Company opened four new stores and permanently closed one underperforming location. As of April 30, there were 254 Urban Outfitters stores, 234 Anthropologie stores, 145 Free People stores, and 11 restaurants. Click here to request a copy of the 1Q Sales Report.
Urban Outfitters is projecting a 60% decline in same-store sales in the 2Q ending July 31 due to the disruptions caused by COVID-19 and tepid demand recovery. The Company has reopened about 40% of its 634 stores worldwide but said initial customer traffic has been sluggish. It expects to open 100 more stores by the first week of June. CEO Richard Hayne stated, “We believe a return to near pre-virus levels will take many quarters and a medical vaccine or cure.”
Foot Locker’s 1Q sales (for the period ended May 2) decreased 43.4% to $1.18 billion, and comps dropped 42.8%. Gross margin decreased to 23% from 33.2%, and SG&A margin eroded to 26.9% from 20%. The Company recorded a loss of $90.0 million, compared to a profit of $228.0 million last year. As of May 2, merchandise inventories were 20.4% higher than at the end of 1Q19. Cash and cash equivalents totaled $1.01 billion, while debt was $451.0 million (including $330.0 million borrowed from its $400.0 million credit facility). Foot Locker opened five new stores, remodeled or relocated nine existing stores, and permanently closed 21 underperforming units, ending the quarter with 3,113 stores in 27 countries. The Company indicated that its phased reopening of stores is underway but did not specify the number of stores open.
The TJX Companies reported a 5% comparable sales increase in February, but sales for 1Q21 (period ended May 2) fell 52.5%. During the quarter, the Company wrote down inventory by approximately $500.0 million as a result of its COVID-19-related store closures. EBITDA dropped deep into negative territory at $1.10 billion. TJX burned $3.37 billion of cash in the period, ending the quarter with $4.29 billion of liquidity.
As of March 19, TJX temporarily closed all stores, distribution centers and offices, as well as its U.S. e-commerce sites. The Company began reopening stores as of May 2. TJX currently has approximately 1,600 stores open worldwide. The Company believes that most of its stores could be reopened by the end of June, based on current government guidance.
The abrupt COVID-19 related change in consumer behavior, particularly the shift to work from home and online schooling, cushioned Best Buy’s 1Q sales, which only fell 6.3% to $8.56 billion, despite all of its stores being closed since mid-March. The top line was aided by strength in computing and gaming. The Company retained 81% of last year’s sales, with quarter-to-date trends in the 95% range. Domestic online sales rose 155%, with the last six weeks of the quarter increasing 300%. Best Buy has begun reopening stores for appointments for more complex purchases, with 70% of the store base running this program. The Company resumed in-home visits and services, including large appliance delivery and home repair. Gross margin slid 70 bps, while adjusted operating income fell nearly 30%. Similar to other retailers, Best Buy furloughed most of its employees, suspended its share buyback program, reduced salaries and compensation, and cut other operating expenses to preserve liquidity during the period. Due to the uncertainty around the duration of the pandemic, the Company did not provide updated guidance. Best Buy ended 1Q with more than $2.50 billion in debt and cash of nearly $4.00 billion.
L Brands’ 1Q sales (for the period ended May 2) fell 37.1% to $1.65 billion, led by a 13% drop in Victoria’s Secret’s same-store sales, offsetting the 41% gain at Bath & Body Works (BBW). The Company’s stores are typically mall-based and have been closed since March 17. Online sales partially tempered in-store losses, with BBW digital sales up 85%. Gross margin was cut in half and reached 17.5%, while operating expense rose 1,340 bps. During the quarter, the Company took an impairment charge on Victoria’s Secret’s store assets of $96.8 million. Given the uncertainty around COVID-19, the Company did not provide updated guidance, nor did it provide its balance sheet or cash flow statements. During the quarter, the Company opened five new stores and permanently closed 28 underperforming stores, ending with 2,897 units. As we previously reported, CEO Les Wexner resigned and was replaced by Andrew Meslow on May 14. At the same time, Stuart Burgdoerfer, the current CFO, took on the additional role of interim CEO for Victoria’s Secret. The Company’s planned deal to sell 55% of Victoria’s Secret to Sycamore Partners fell through on May 4.
As part of its 1Q earnings release and conference call, L Brands confirmed its plans to separate Victoria’s Secret and Bath & Body Works and is already working to decentralize certain back-office tasks. Victoria’s Secret is over-indexed to mall locations and has struggled to drive sales and traffic in recent years. These trends have been exacerbated by the COVID-19-related store closures, leading to at least 250 store closures this year in the U.S. and Canada, with more to follow in 2021 and 2022, as management works to right-size and reposition the business. The Company is also evaluating strategic options to minimize or eliminate its losses in the U.K. and China. In 2020, the Company is projecting the completion of 55 real estate projects (remodels and new stores) versus its usual plan of 200 projects. Click here to request a copy of the 1Q Sales Report.
Boot Barn’s 4Q sales (for the period ended March 28) decreased 2.1% to $188.6 million, and comps were down 4.7%. Retail comps declined 7.1%, while e-commerce sales were up 7.5%. Sales and comp growth were solid during the first ten weeks of the quarter, before declining significantly during the last three weeks as a result of the COVID-19 crisis. Gross margin dropped 220 basis points to 30.7%, driven primarily by deleverage in buying and occupancy costs. Adjusted EBITDA fell 24.4% to $16.8 million. The Company opened 20 new stores during the year, including eight in the 4Q, ending with 260 stores.
As of May 19, 242 of the Company’s 260 stores had reopened. April sales declined 53%, with retail comps plummeting 64% and e-commerce comps (46% of total sales) up 45%. For the first three weeks of May, sales fell 22%, with retail comps down 31% and e-commerce comps (31% of total sales) up 72%.
Management indicated that it has remerchandised stores to prioritize essential product for critical workers, streamlined the stores to enable customers to get in and out more quickly, and augmented the assortment. The board waived the current quarter’s payment of their cash retainer fee, and the CEO and other senior leadership members have significantly reduced their salaries. As of March 28, Boot Barn had $35.1 million remaining on its $165.0 million line of credit and $69.6 million in cash on hand. Click here to request a copy of the 4Q Sales Report.
Lowe’s Companies’ 1Q sales (for the period ended May 1) jumped 10.9% to $19.68 billion, and U.S. comps were up 12.3%. U.S. comps increased 5.1%, 8.9% and 20.4% in February, March and April, respectively. Comparable transactions increased 1.6%, and comparable average ticket was up 9.6%. Online sales rose 80%. Gross margin improved 164 basis points to 33.1%. Operating income rose 40.5% to $1.99 billion, and operating margin was up 213 basis points to 10.1%.
In response to COVID-19, the Company made two special payments of $300 for full-time hourly associates and $150 for part-time hourly associates, totaling $145.0 million. It also increased pay by $2 per hour for April and hired more than 100,000 associates for the spring season. Given the uncertain economic outlook, Lowe’s raised $4.00 billion in senior unsecured notes and increased the capacity of its revolving credit facilities by $770.0 million. After repaying $500.0 million of fixed rate notes due April 15, the Company now has $6.00 billion of cash and cash equivalents as well as $3.00 billion in undrawn capacity on its revolving credit facilities. As of May 1, Lowe’s operated 1,970 stores in the U.S. and Canada. Click here to request a copy of the 1Q Sales Report.
