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Globe and Mail
11 hours ago
- Business
- Globe and Mail
Can Costco's Affirm Tie-Up Accelerate Digital Sales in Q4?
Costco Wholesale Corporation 's COST partnership with Affirm to offer "Buy Now, Pay Later" (BNPL) financing has the potential to boost digital sales, particularly for big-ticket items such as appliances, furniture and consumer electronics. The strategy is a direct investment in improving the digital member experience. With inflation still pressuring discretionary spending, BNPL can lower psychological purchase barriers, especially for budget-conscious households. The timing of this initiative aligns well with Costco's rapidly expanding digital ecosystem. E-commerce comparable sales jumped 14.8% in the third quarter of fiscal 2025. Website traffic surged 20%, while average order values ticked up 3%. Costco Logistics saw a 31% year-over-year increase in big and bulky e-commerce deliveries in the last reported quarter, an area where BNPL may further accelerate adoption. The Affirm partnership is a significant component of Costco's broader effort to enhance its digital and technology capabilities, aiming to drive future sales growth. By offering flexible monthly payment options, Costco is making its higher-value products more accessible, potentially broadening its customer base and deepening member loyalty. The success of this initiative is crucial for sustaining the strong digital sales growth into the fourth quarter and beyond. As members become more familiar with this financing option, it could notably boost average order values and enhance e-commerce performance. We note that e-commerce comparable sales increased 15.1% in July. This growth builds on June's 11.5% and May's 11.6% gains, underscoring ongoing strength in Costco's digital channel. How Are Costco Rivals WMT & AMZN Approaching? While Costco's BNPL rollout is in its nascent stage, competitors like Walmart Inc. WMT and Inc. AMZN have already embedded installment options into their ecosystems. Walmart offers BNPL both online and in-store, with a particular focus on seasonal items and electronics. This move aligns with Walmart's broader strategy to boost its e-commerce presence and cater to a growing base of price-sensitive consumers. Amazon has introduced Amazon Pay Later, allowing shoppers to break up their purchases into convenient monthly payments. The service aims to reduce the burden of paying the full amount upfront, giving customers easier access to higher-priced items while helping them manage their budgets more effectively. What Latest Metrics Say About Costco Costco stock has been a standout performer, with shares rallying 11.4% over the past year, outpacing the industry 's growth of 7.7%. From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 48.96, higher than the industry's ratio of 32.67. COST carries a Value Score of D. The Zacks Consensus Estimate for Costco's current financial-year sales and earnings per share implies year-over-year growth of 8.1% and 11.6%, respectively. Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Free Report: Profiting from the 2nd Wave of AI Explosion The next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives. Investors who bought shares like Nvidia at the right time have had a shot at huge gains. But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies. Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI's next leap forward. Access AI Boom 2.0 now, absolutely free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Walmart Inc. (WMT): Free Stock Analysis Report
Yahoo
3 days ago
- Business
- Yahoo
SBH's E-Commerce Sales Hit 11% of Net Sales: Can it Keep Rising?
Sally Beauty Holdings, Inc.'s (SBH) digital channel continues to solidify its role as a key revenue driver. In the third quarter of fiscal 2025, global e-commerce sales reached $99 million, representing 10.6% of net sales, up from 9.7% reported in the prior-year levels and showing solid momentum despite overall sales dipping 1%. Segment trends highlight the shift. Sally Beauty Supply generated $43 million in e-commerce sales, or 8.2% of segment revenues, while Beauty Systems Group posted $56 million, representing 13.7%. The expansion indicates both higher marketplace activity, on platforms like Amazon, Walmart and Uber Eats, and the company's direct site traffic. Growth is being fueled by strategic digital initiatives such as marketplace integration, expanded fulfillment capabilities and the Licensed Colorist OnDemand service, which encourages online engagement and boosts basket size. Sally Beauty has also leaned on targeted promotions and product innovation to bring first-time customers into its e-commerce ecosystem. Yet, sustaining momentum would not be without challenges. Consumers remain value-focused, with selective trade-down in certain categories. Still, the combination of marketplace expansion, targeted marketing and personalized experiences positions e-commerce to capture a growing share of total sales. With continued investment in customer engagement and operational efficiency, Sally Beauty's digital channel appears well-placed to drive incremental growth in traffic, conversion and market share. Strategic investment in customer engagement and operational efficiency should support growth in digital traffic and conversion rates. How SBH's E-Commerce Growth Compares With ULTA, EL & COTY Ulta Beauty, Inc. (ULTA) continues to enhance its digital capabilities, with e-commerce sales climbing about 10% in the first quarter of fiscal 2025. The retailer's focus on personalization, real-time content delivery and new features like 'Shop My Store' has strengthened online engagement and conversion. Ulta Beauty's integration of major promotional events, such as 21 Days of Beauty, across both physical and digital channels demonstrates its strength in merging experiential retail with e-commerce. These efforts, alongside marketplace expansion planned for later this year, are expected to further lift Ulta Beauty's online sales share. The Estée Lauder Companies Inc. (EL) is deepening its online presence through brand-owned sites and third-party platforms, including Amazon Premium Beauty, TikTok Shop and Shopee. In the third quarter of fiscal 2025, Estée Lauder achieved organic online sales growth, fueled by product innovation and targeted digital marketing. Estée Lauder's investment in influencer-driven campaigns and region-specific digital activations reinforces its strategy to capture a greater share of e-commerce in key global markets. Coty Inc. (COTY) is leveraging digital channels to drive brand visibility and sales, particularly in mass fragrances and select prestige categories. Online activations on Amazon and TikTok Shop, coupled with targeted promotions and digital-first product launches, are helping Coty expand its e-commerce footprint. The company's focus on innovation and marketing efficiency aids in further growing its share of online beauty sales in the coming years. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report Ulta Beauty Inc. (ULTA) : Free Stock Analysis Report Sally Beauty Holdings, Inc. (SBH) : Free Stock Analysis Report Coty (COTY) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Wall Street Journal
04-08-2025
- Business
- Wall Street Journal
Tractor Supply Beefs Up Last-Mile Delivery to Grow Sales
Tractor Supply is revving up its final-mile fulfillment operation as part of a push to grow digital and business-to-business sales. The Brentwood, Tenn.-based company is hiring drivers and renting fleets of vehicles such as pickup trucks and trailers to handle more customer deliveries itself, including for bulky goods like 50-pound bags of cattle feed and chicken coops.
Globe and Mail
30-07-2025
- Business
- Globe and Mail
FAT BRANDS INC. REPORTS SECOND QUARTER 2025 FINANCIAL RESULTS
Conference call and webcast today at 4:30 p.m. ET LOS ANGELES, July 30, 2025 (GLOBE NEWSWIRE) -- FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) ('FAT Brands' or the 'Company') today reported financial results for the fiscal second quarter ended June 29, 2025. Andy Wiederhorn, Chairman of FAT Brands, said: 'Backed by a robust pipeline of roughly 1,000 signed deals, we opened 18 new locations during the second quarter, including three co-branded Marble Slab Creamery and Great American Cookies stores, and are well positioned to meet our goal of more than 100 restaurant openings this year. In Florida, we've signed a development deal to open 40 additional Fatburger locations over the next decade, growing our state presence to approximately 50 locations. Our diversified portfolio strategy is paying dividends, led by a strong performance in our snacks segment. We are also seeing meaningful impact from our digital initiatives. At Great American Cookies, digital sales now account for 25% of total revenue with loyalty-driven sales up 40% while Round Table Pizza is experiencing 21% loyalty-driven sales growth and 18% higher customer engagement.' Ken Kuick, Co-Chief Executive Officer and Chief Financial Officer of FAT Brands said: 'We continue to take decisive steps to strengthen our financial position, including securing a bondholder agreement to convert amortizing bonds to interest-only, which will generate an additional $30 to $40 million in annual cash flow savings. Our indenture-related dividend pause remains in effect until we reach the $25 million principal reduction threshold, preserving $36 to $40 million annually. We have also implemented over $5 million in annual G&A reductions while actively working toward refinancing our three remaining securitization silos well ahead of their July 2026 maturity. These combined actions position us to achieve cash flow positive status in the coming quarters." Taylor Wiederhorn, Co-Chief Executive Officer of FAT Brands, said: 'A key strategic priority for us is expanding our manufacturing capacity. To support this, we are actively pursuing strategic partnerships that broaden our brand reach and strengthen our manufacturing capabilities, reinforcing our commitment to growing our market presence and delivering exceptional products to our customers.' Fiscal Second Quarter 2025 Highlights Total revenue declined 3.4% to $146.8 million compared to $152.0 million in the fiscal second quarter of 2024 System-wide sales declined 3.7% System-wide same-store sales declined 3.9% 18 new store openings during the fiscal second quarter of 2025 Net loss of $54.2 million, or $3.17 per diluted share, compared to $39.4 million, or $2.43 per diluted share, in the fiscal second quarter of 2024 Negative EBITDA (1) of $6.0 million compared to EBITDA (1) of $6.8 million in the fiscal second quarter of 2024 Adjusted EBITDA (1) of $15.7 million in the fiscal second quarter of 2025 and 2024 Adjusted net loss (1) of $49.0 million, or $2.88 per diluted share, compared to adjusted net loss (1) of $30.9 million, or $1.93 per diluted share, in the fiscal second quarter of 2024 (1) EBITDA, adjusted EBITDA and adjusted net loss are non-GAAP measures defined below, under 'Non-GAAP Measures'. Reconciliation of GAAP net loss to EBITDA, adjusted EBITDA and adjusted net loss are included in the accompanying financial tables. Summary of Fiscal Second Quarter 2025 Financial Results Total revenue decreased $5.2 million, or 3.4%, in the second quarter of 2025 to $146.8 million compared to $152.0 million in the year-ago quarter, primarily driven by a decrease in restaurant revenue resulting from the closure of five underperforming Smokey Bones locations, the temporary closure of one Smokey Bones location for conversion into a Twin Peaks lodge and lower same-store sales, partially offset by the opening of new Twin Peaks lodges. General and administrative expense increased $14.8 million, or 50.3%, in the second quarter of 2025 to $44.4 million compared to $29.6 million in the same period in the prior year, primarily due to increased share-based compensation expense related to Twin Hospitality Group Inc. and the recognition of $2.1 million in Employee Retention Credits during the prior year quarter. Cost of restaurant and factory revenues was related to the operations of the company-owned restaurant locations and dough factory and decreased $2.1 million, or 2.1%, in the second quarter of 2025 to $98.1 million compared to $100.1 million in the year-ago quarter, primarily due to the decreased costs at company-owned restaurants and factory revenue. Advertising expenses decreased $3.1 million in the second quarter of 2025 to $11.5 million compared to $14.7 million in the same period in the prior year. These expenses vary in relation to advertising revenues. Total other expense, net, for the second quarter of 2025 and 2024 was $39.4 million and $34.8 million, respectively, which is inclusive of interest expense of $39.4 million and $34.0 million, respectively. Adjusted net loss (1) was $49.0 million, or $2.88 per diluted share, compared to adjusted net loss (1) of $30.9 million, or $1.93 per diluted share, in the fiscal second quarter of 2024. Key Financial Definitions New store openings - The number of new store openings reflects the number of stores opened during a particular reporting period. The total number of new stores per reporting period and the timing of store openings has, and will continue to have, an impact on our results. Same-store sales growth - Same-store sales growth reflects the change in year-over-year sales for the comparable store base, which we define as the number of stores open and in the FAT Brands system for at least one full fiscal year. For stores that were temporarily closed, sales in the current and prior period are adjusted accordingly. Given our focused marketing efforts and public excitement surrounding each opening, new stores often experience an initial start-up period with considerably higher than average sales volumes, which subsequently decrease to stabilized levels after three to six months. Additionally, when we acquire a brand, it may take several months to integrate fully each location of said brand into the FAT Brands platform. Thus, we do not include stores in the comparable base until they have been open and in the FAT Brands system for at least one full fiscal year. System-wide sales growth - System-wide sales growth reflects the percentage change in sales in any given fiscal period compared to the prior fiscal period for all stores in that brand only when the brand is owned by FAT Brands. Because of acquisitions, new store openings and store closures, the stores open throughout both fiscal periods being compared may be different from period to period. Conference Call and Webcast FAT Brands will host a conference call and webcast to discuss its fiscal second quarter 2025 financial results today at 4:30 PM ET. Hosting the conference call and webcast will be Andy Wiederhorn, Chairman of the Board, and Ken Kuick, Co-Chief Executive Officer and Chief Financial Officer. The conference call can be accessed live over the phone by dialing 1-877-704-4453 from the U.S. or 1-201-389-0920 internationally. A replay will be available after the call until Wednesday, August 20, 2025, and can be accessed by dialing 1-844-512-2921 from the U.S. or 1-412-317-6671 internationally. The passcode is 13754156. The webcast will be available at under the 'Investors' section and will be archived on the site shortly after the call has concluded. About FAT (Fresh. Authentic. Tasty.) Brands FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli's, Twin Peaks, Smokey Bones, Great American Cookies, Hot Dog on a Stick, Buffalo's Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses and franchises and owns approximately 2,300 units worldwide. For more information, please visit Forward-Looking Statements This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the future financial and operating results of the Company, the timing and performance of new store openings, our ability to conduct future accretive acquisitions and our pipeline of new store locations. Forward-looking statements generally use words such as 'expect,' 'foresee,' 'anticipate,' 'believe,' 'project,' 'should,' 'estimate,' 'will,' 'plans,' 'forecast,' and similar expressions, and reflect our expectations concerning the future. Forward-looking statements are subject to significant business, economic and competitive risks, uncertainties and contingencies, many of which are difficult to predict and beyond our control, which could cause our actual results to differ materially from the results expressed or implied in such forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of this press release. Non-GAAP Measures (Unaudited) This press release includes the non-GAAP financial measures of EBITDA, adjusted EBITDA and adjusted net loss. EBITDA is defined as earnings before interest, taxes, and depreciation and amortization. We use the term EBITDA, as opposed to loss from operations, as it is widely used by analysts, investors, and other interested parties to evaluate companies in our industry. We believe that EBITDA is an appropriate measure of operating performance because it eliminates the impact of expenses that do not relate to business performance. EBITDA is not a measure of our financial performance or liquidity that is determined in accordance with generally accepted accounting principles ('GAAP'), and should not be considered as an alternative to net loss as a measure of financial performance or cash flows from operations as measures of liquidity, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA is defined as EBITDA (as defined above), excluding expenses related to acquisitions, refranchising (gain) loss, impairment charges, and certain non-recurring or non-cash items that the Company does not believe directly reflect its core operations and may not be indicative of the Company's recurring business operations. Adjusted net loss is a supplemental measure of financial performance that is not required by or presented in accordance with GAAP. Adjusted net loss is defined as net loss plus the impact of adjustments and the tax effects of such adjustments. Adjusted net loss is presented because we believe it helps convey supplemental information to investors regarding our performance, excluding the impact of special items that affect the comparability of results in past quarters to expected results in future quarters. Adjusted net loss as presented may not be comparable to other similarly titled measures of other companies, and our presentation of adjusted net loss should not be construed as an inference that our future results will be unaffected by excluded or unusual items. Our management uses this non-GAAP financial measure to analyze changes in our underlying business from quarter to quarter based on comparable financial results. Reconciliations of net loss presented in accordance with GAAP to EBITDA, adjusted EBITDA and adjusted net loss are set forth in the tables below. Investor Relations: ICR Michelle Michalski ir-fatbrands@ Media Relations: Erin Mandzik emandzik@ 860-212-6509 FAT Brands Inc. Consolidated Statements of Operations Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands, except share and per share data) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Revenue Royalties $ 22,169 $ 23,318 $ 43,942 $ 45,265 Restaurant sales 102,388 107,410 201,803 213,348 Advertising fees 9,667 10,065 19,431 19,861 Factory revenues 10,250 9,636 19,061 19,110 Franchise fees 1,124 1,113 2,314 2,594 Other revenue 1,238 498 2,304 3,829 Total revenue 146,836 152,040 288,855 304,007 Costs and expenses General and administrative expense 44,415 29,558 77,458 59,563 Cost of restaurant and factory revenues 98,050 100,113 194,147 199,163 Depreciation and amortization 8,382 10,246 18,773 20,440 Refranchising (gain) loss (9) 175 (31) 1,683 Advertising fees 11,548 14,651 22,624 27,243 Total costs and expenses 162,386 154,743 312,971 308,092 Loss from operations (15,550) (2,703) (24,116) (4,085) Other (expense) income, net Interest expense (34,952) (29,586) (66,396) (59,209) Interest expense related to preferred shares (4,417) (4,417) (8,835) (8,835) Net (loss) gain on extinguishment of debt — — (151) 427 Other income (loss), net 7 (752) 44 (548) Total other expense, net (39,362) (34,755) (75,338) (68,165) Loss before income tax provision (54,912) (37,458) (99,454) (72,250) Income tax provision (457) (1,901) (2,226) (5,425) Net loss (55,369) (39,359) (101,680) (77,675) Less: Net loss attributable to non-controlling interest (1,181) — (1,523) — Net loss attributable to FAT Brands Inc. $ (54,188) $ (39,359) $ (1,523) $ (77,675) Net loss attributable to FAT Brands Inc. $ (54,188) $ (39,359) $ (100,157) $ (77,675) Dividends on preferred shares (2,310) (1,920) (4,541) (3,801) $ (56,498) $ (41,279) $ (104,698) $ (81,476) Basic and diluted loss per common share $ (3.17) $ (2.43) $ (5.91) $ (4.80) Basic and diluted weighted average shares outstanding 17,821,815 17,007,352 17,702,122 16,977,376 Cash dividends declared per common share $ — $ 0.14 $ — $ 0.28 FAT Brands Inc. Consolidated EBITDA and Adjusted EBITDA Reconciliation Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Net loss attributable to FAT Brands Inc. $ (54,188) $ (39,359) $ (100,157) $ (77,675) Interest expense, net 39,369 34,003 75,231 68,044 Income tax provision 457 1,901 2,226 5,425 Depreciation and amortization 8,382 10,246 18,773 20,440 EBITDA (5,980) 6,791 (3,927) 16,234 Bad debt expense (recovery) 971 (1,729) 1,201 (1,561) Share-based compensation expenses 12,765 677 13,131 1,422 Non-cash lease expenses 395 758 735 1,388 Refranchising (gain) loss (9) 175 (31) 1,683 Litigation costs 5,198 7,852 12,062 11,660 Severance — 19 — 41 Net loss related to advertising fund deficit 2,178 1,140 2,747 3,422 Net loss (gain) on extinguishment of debt — — 151 (427) Pre-opening expenses 177 63 695 91 Adjusted EBITDA $ 15,695 $ 15,747 $ 26,764 $ 33,953 FAT Brands Inc. Adjusted Net Loss Reconciliation Thirteen Weeks Ended Twenty-Six Weeks Ended (In thousands, except share and per share data) June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024 Net loss attributable to FAT Brands Inc. $ (54,188) $ (39,359) $ (100,157) $ (77,675) Refranchising (gain) loss (9) 175 (31) 1,683 Net loss (gain) on extinguishment of debt — — 151 (427) Litigation costs 5,198 7,852 12,062 11,660 Severance — 19 — 41 Tax adjustments, net (1) 43 408 273 973 Adjusted net loss $ (48,956) $ (30,905) $ (87,702) $ (63,745) Net loss $ (54,188) $ (39,359) $ (100,157) $ (77,675) Dividends on preferred shares (2,310) (1,920) (4,541) (3,801) $ (56,498) $ (41,279) $ (104,698) $ (81,476) Adjusted net loss $ (48,956) $ (30,904) $ (87,702) $ (63,745) Dividends on preferred shares (2,310) (1,920) (4,541) (3,801) $ (51,266) $ (32,824) $ (92,243) $ (67,546) Loss per basic and diluted share $ (3.17) $ (2.43) $ (5.91) $ (4.80) Adjusted net loss per basic and diluted share $ (2.88) $ (1.93) $ (5.21) $ (3.98) Weighted average basic and diluted shares outstanding 17,821,815 17,007,352 17,702,122 16,977,376 (1) Reflects the tax impact of the adjustments using the effective tax rate for the respective periods.
