Filed under: Competitive strategy, Wal-Mart (WMT)

In an interesting eco-twist with the world’s largest retailer, Wal-Mart Stores, Inc. (NYSE: WMT) stated yesterday that it will eliminate all laundry detergents from its shelves that are not packaged and sold in ‘concentrated’ form. In an effort to reduce waste and conserve natural resources, the company said that all U.S. Wal-Mart stores and Sam’s Clubs would only sell concentrated detergent going forward, although a drop-dead date was not reported with the announcement.

After having strolled through Wal-Mart in the last 24 hours, I can say that much of the laundry detergent already sold by the retailer comes in concentrated form — but then, there are many brands that are not. Procter & Gamble Co. (NYSE: PG) stated that they will start distributing smaller detergent containers for concentrated liquid detergent this year. P&G’s larger brands are Tide and Downy, among many others.

The move is not really a surprise by Wal-Mart, which has been on a green warpath this year. This summer, the retailer announced that it would only accept smaller packaging from many of its vendors, and created a complete set of guidelines to help those vendors get packaging to where there would be minimal waste after purchase.

In addition to selling and promoting a huge assortment of energy-saving compact fluorescent light bulbs (CFLs), the company is taking steps to cut back (or even eliminate) high gas usage by its trucking fleet. All of these measures are part of the company’s “Sustainability 360″ plan. The plan includes these initiatives: saving more than 400 million gallons of water, 95 million pounds of plastic and 125 million pounds of cardboard over the course of every year. Now, those are some large numbers.

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Filed under: Earnings reports, Bad news, Walgreen Co (WAG), CVS Corp (CVS), Rite Aid Corp (RAD)

Rite Aid (NYSE: RAD), the third-largest operator of drug stores in the U.S., said earlier today that its second-quarter loss was wider than expected.

In the retailer’s latest reporting period, the company swallowed a loss of $78.2 million, or 10 cents per share, wider than the year-ago loss of $8.2 million (two cents per share) and four cents below Wall Street’s consensus view of six cents per share. While cash flow and tax benefits improved during the quarter, Rite Aid spent more on interest and integration, as well as other items. RAD also absorbed a one-time financing commitment charge of $12.9 million. On the plus side, revenue rose 54% to $6.6 billion; on the minus side, analysts were expecting sales of $6.8 billion. Same-store sales edged 1.1% higher during the quarter.

RAD chairman and CEO, Mary Sammons, participated in a post-earnings conference call and was quoted by Forbes as taking a cheerful view: “The good news is we’ve seen the margin rate improve and expect sales to do the same.”

Continue reading Rite Aid (RAD) reports increased second-quarter loss

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Filed under: Apple Inc (AAPL), Amazon.com (AMZN)

Apple, Inc. (Nasdaq: AAPL) and Amazon.com, Inc. (Nasdaq: AMZN) have been hot companies and, yes, hot stocks. But the two companies are taking shots at each other.

Of course, as was expected, Amazon.com launched its digital music store, which has about 2.3 million songs. But as the company is wont to do, it has engaged in some price cutting. For example, a song costs between 89 cents to 99 cents. An album goes for $5.99 to $9.99.

Well, to get some analysis on this, I turned to Rafi Mohammed, who is an expert on pricing. He operates Pricing for Profit and is also the author of the book, the Art of Pricing. According to him:

“Amazon’s entry into the digital music market will significantly affect Apple. Drawn by steep discounts, many music aficionados will switch to Amazon’s service. This will inject some much needed competition into the digital music market, which will help music companies gain negotiating power. Additionally, a strong iTunes competitor may offer co-branding opportunities for music device makers. My prediction: this is the catalyst to music companies moving to their beloved variable pricing (some prices higher than others) model and new digital music players that will successfully challenge Apple’s iPod.”

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: Press releases, Products and services, Launches, Conventions and conferences

Today, iRobot Corporation (NASDAQ: IRBT) CEO and co-founder Colin Angle spoke as the keynote at the Digital Life expo in New York City’s Jacob Javits Center. He announced not one, but two new robotic products: the Looj, a gutter cleaning robot, and the ConnectR, a virtual visiting robot.

He first warmed up the crowd by reminding them of the television cartoon The Jetsons, which was once a vision of futuristic household robots. He said that although his robots were not humanoids, they are “fantastically useful.” He said, “Goodbye Jetsons, goodbye Hollywood robots.” And hello new product announcements.

After running through the company’s current product line — which features the Roomba, a vacuuming robot, the Scooba, a floor washing robot, the Dirt Dog, a shop sweeping robot, and the Verro, a pool cleaning robot — Angle detailed the two new robots.

First, he introduced the gutter cleaning Looj, which he described as a “mini tank.” It is low profile, meaning it can drive under gutter straps, as well as water proof, making for easy cleaning. The Looj is remote controlled and drives in forward and reverse, meaning you only need to climb a ladder once to drop it and retrieve it. It even comes with an optional belt attachment carrying case, making for safe ladder climbing. It retails for $99 ($129 with the belt attachment carrying case), starting today on iRobot.com, and will be at “select retailers shortly.”

Continue reading iRobot (IRBT) announces two new robots at Digital Life

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Filed under: Analyst reports, Deals, Private equity, Wendy’s Intl (WEN)

As BloggingStock’s Douglas McIntyre wrote earlier today, the Wendy’s Intl (NYSE:WEN) hamburger chain has attracted the attention of more than one group of investors interested in taking it private. Monique Curet, of Wendy’s hometown paper, The Columbus Dispatch, had some interesting insights into the landscape of a possible purchase, including the news that a full dozen parties are believed to have signed confidentiality agreements in order to study the financials.

A point of debate among industry experts is the corporation’s worth. Most agree that its current stock price already reflects a pre-sale bump. One group of franchisees considering the purchase is led by J. David Karam of Cedar Enterprises, Inc., who considers the current stock price, in the mid 30’s, a problem in light of its trading at 12 times core income.

Continue reading More news about Wendy’s (WEN) possible sale

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Filed under: Private equity, Canada, First Data (FDC), Blackstone Group L.P (BX)

On its prior conference call, The Blackstone Group LP (NYSE: BX) said it’s planning to scoop up distressed buyout bonds. With its cash hoard, it seems like a good bet. Besides, there are signs that the debt markets are picking up, especially in light of the financing of the First Data deal.

According to news reports, some other firms now are seeing dollar signs from the same strategy. Take Onex, which is a top private equity firm in Canada.

But there’s a hitch: Onex does not have the right staff to pull it off. Just like many other private equity firms, Onex focused on putting deals together. Onex said it is talking to a two-person group to help out. Hmmm….does seem kind of flimsy, huh?

Basically, this is yet another indication of why big firms, like KKR, TPG, and Blackstone, have big advantages. With their scale and resources, they certainly are nicely positioned when markets have sudden changes.

But, the distressed debt opportunity might be big enough for many firms. After all, as Onex’s CEO, Gerald Schwartz, said: “there are opportunities that are just staggering.”

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: Bad news, Target Corp. (TGT)

Target Corp.’s (NYSE: TGT) is now warning the market of a slower September sales month after coming off several months of better-than-expected same-store sales. The nation’s second-largest discount retailer seemed to set a scary precedent for other retailers as well, with the market thinking that a slow holiday season could set in as October approaches and the holiday shopping season begins in November.

But alas, retailers (and other companies) are known to downgrade guidance only to then beat expectations by a long shot. It’s a standard tactic with many public companies, although Target’s volume of housewares equipment and cheap but fashionable clothing could suffer from the housing market downturn and uncertainty about gas prices. Umm, hello? These factors have existed at the front of the line for quarters now, so why attribute possible holiday season shopping slowdowns to the most oft-mentioned causes?

On one level, it makes sense. Discretionary spending becomes tight when mounds of gift purchases are at stake, and the housing market tumble could cause skittishness in the buying public in terms of how much it spends this year for holiday gifts. This week, Target, cut its forecast for September same-store sales (sales from stores open at least a year) to 1.5% to 2.5% — quite a drop from the previous 4% to 6%. In a sign that maybe the housing market was playing a factor, the retailer stated that sales in Florida was particularly sluggish. The state is sharing the top spot with California in terms of housing foreclosures and mortgage flops.

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Filed under: Google (GOOG), Options

Google (NASDAQ: GOOG) is expected to report EPS on 10/18. GOOG October at the money 570 straddle is priced at $35. GOOG October option implied volatility of 28 is near its 26-week average according to Track Data, suggesting non-directional risk.

Wyeth (NASDAQ: WYE) implied volatility Flat into $5 billion stock buyback. WYE, is engaged in the discovery, development, manufacture, distribution, and sales of products in pharmaceutical, healthcare and animal health. WYE announced a $5 billion share repurchase program. WYE has a market cap of $60 billion. WYE October option implied volatility of 27 is near its 26-week average of 25 according to Track Data, suggesting non-directional risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.

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Filed under: Earnings reports, Bad news, Competitive strategy, D.R.Horton (DHI), KB HOME (KBH), Lennar Corp’A’ (LEN), Housing

No matter how one tries, there’s virtually no way to sugar-coat KB Home’s Q3 earnings report.

Los Angeles-based KB Home (NYSE: KBH) Thursday posted a Q3 EPS loss of $6.19 compared to the Reuters consensus estimate of a loss of 71 cents.

The company said Q3 revenue totaled $1.53B, down 33% from a year ago, and below the $1.59B Reuters consensus estimate.

Continue reading KB Home’s gory Q3 report

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Filed under: Newsletters, Bargain stocks, Chasing Value, Stocks to Buy

“Since the first ‘one-armed bandit’ was introduced in the late 1800s, slot machines have become a thriving multi-billion dollar global industry,” says says Nathan Slaughter. “And International Game Technology (NYSE: IGT) is the ‘800-pound gorilla’ in the slot machine industry” he explains in his Half-Priced Stocks.

And while he notes that the earliest slot machines were crude mechanical devices, the latest are “technological marvels,” equipped with rich high-resolution plasma monitors, stereo surround sound speakers, live streaming video, and other features.

And looking ahead, Slaughter explains, there are other exciting developments on the horizon to look forward to — such as server-based gaming, where entire banks of slot machines connected to a central server can be reconfigured instantly.

In Nevada, he notes, slot revenues surpassed those generated by blackjack and other table games in 1981 and never looked back. Last year, he observes, they accounted for 66% of total casino revenues statewide.

Continue reading International Game (IGT): Slot maker hits the jackpot

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