Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz for the day will be.
Friday, the Dow Jones industrial average lost 140.19 points, or 0.9%, to close at 16,361.46. The Standard & Poor’s 500 fell 15.21 points, or 0.8%, to 1,863.40. The NASADQ composite lost 72.78 points, or 1.8%, to 4,075.56. Benchmark U.S. crude for June delivery shed $1.07 to $100.87 on the New York Mercantile Exchange.
STARBUCKS PERKS UP IN Q2
Seattle – Starbucks Coffee Company reported generally strong performance in the second quarter of fiscal 2014, compared to the same period a year earlier. Earnings per share rose 10% to $0.56, from $0.51. Consolidated net revenues grew 9% to $3.87 billion from $3.55 billion, while consolidated same-store sales increased 6%. The retailer cited its Teavana business, partnership with Oprah Winfrey, and new payment and loyalty technology as all contributing to overall fiscal growth. For fiscal 2014, Starbucks expects earnings per share in the range of $2.62 to $2.68, revenue growth of 10% or greater, and global same-store sales growth in the mid-single digits. Earnings per share in the third quarter are expected to range from $0.64 to $0.66.
WALMART CUT CEO DUKE’S PAY 73% LAST YEAR
Bentonville, Ark. -- WalMart Stores Inc. cut some stock awards and reduced outgoing CEO Mike Duke’s compensation package 73% to $5.6 million in 2013, according to a report by the Associated Press. Last year, Duke didn't get stock awards that are given in anticipation of future performance, and his performance-based bonus was reduced, resulting in a compensation package worth about $5.6 million including a base salary of $1.4 million and a performance-based bonus of $2.8 million for the fiscal year ended Jan. 31. Other compensation totaled $490,090, including retirement contributions and $144,586 for personal use of company aircraft, according to the AP.
WALGREENS TEAMS UP WITH COUPON.COM ON RETAILER iQ ROLLOUT
Mountain View, Calif. -- Coupons.com Inc. announced that Walgreens has rolled out its Retailer iQ targeting and analytics platform in all 8,000 stores, designed to make the promotions and checkout experience digital, mobile and personalized. According to Coupons.com, Retailer iQ combines several components into one omnichannel platform that is designed to drive consumer engagement, activation and shopping behavior. The components include: digital e-receipt via SMS and email, personalized recommendations for products and coupons, integrated shopping lists, extensive targeting capabilities, real time analytics and a wide range of integrated digital media experiences. The platform integrates into the retailer point-of-sale system to manage the entire flow of digital couponing, including creation, issuance, activation, redemption, validation and clearing. “This technology pushes crumpled, indecipherable receipts and irrelevant coupons into the digital era,” said Steven Boal, CEO and founder of Coupons.com. “It’s an incredibly powerful tool. We spent three years building it and we’re proud to be working with Walgreens and our other brand and retailer partners to lead the future of promotions.” Walgreens’ more than 100 million Balance Rewards members can now access Paperless Coupons and digital receipts, with the ability to clip digital offers from walgreens.com/coupons and within its mobile app. Users can redeem offers at point-of-sale by swiping their Balance Rewards cards.
SAFEWAY SWINGS TO Q1 LOSS; EXPECTS MERGER IN Q4
Pleasanton, Calif. – Safeway reported a net loss of $76.5 million in the first quarter of fiscal 2014, compared to net earnings of $118.9 million in the same period a year earlier. The company is working toward closing its $9.4 billion merger with Albertson’s by the fourth quarter of the current fiscal year. Safeway cited the impact of inflation in some goods that it did not fully pass on to consumers as partially driving its net loss. In addition, translating Canadian dollars to U.S. dollars for financial reporting purposes in the sale of its Safeway Canada Limited business also negatively affected income. Sales and other revenue increased 1.0% to $8.3 billion in the first quarter of 2014 from $8.2 billion in the first quarter of 2013, primarily due to an identical-store sales (excluding fuel) increase of 1.8%, partly offset by lower fuel sales in 2014.
DUNKIN’ BRANDS POSTS TOUGH Q1; ON TRACK FOR 800 OPENINGS WORLDWIDE IN 2014
Canton, Mass. -- Dunkin’ Brands Group, parent to Dunkin' Donuts and Baskin-Robbins, said its banners were impacted by tough weather in the first quarter, with U.S. comparable store sales growth of just 1.2%. Net income for the quarter dipped 3.5% from $23.8 million to $23 million. Revenue rose 6.2%. "We had a difficult first quarter with our comparable store sales growth in the U.S. significantly impacted by severe weather in the regions of the country where most of our Dunkin' Donuts restaurants are located. However, we remain confident that we will hit our targets for the full year," said Nigel Travis, chairman and CEO, Dunkin' Brands Group, Inc. The company added 96 net new restaurants worldwide during the quarter, including 69 net new Dunkin' Donuts in the U.S., 52 net new Baskin-Robbins International locations, one net new Baskin-Robbins U.S. location, and 26 net closures for Dunkin' Donuts International. Additionally, Dunkin' Donuts U.S. franchisees remodeled 94 restaurants during the quarter. For fiscal 2014, the company expects that Dunkin' Donuts U.S. will add between 380 and 410 net new restaurants representing greater than 5% net restaurant growth and expects Baskin-Robbins U.S. will add between 5 and 10 net new restaurants. Internationally, the company is targeting opening 300 to 400 net new restaurants across the two brands. Globally, the company expects to open between 685 and 800 net new units.
REPORT: CONSUMERS SPEND $21 BILLION ON VIDEO GAMES
Washington, D.C. – U.S. consumers spent more than $21 billion on video game content, hardware and accessories in 2013. According to a new report from the Entertainment Software Association (ESA), the trade association representing the U.S. video game industry, called “2014 Essential Facts about the Computer and Video Game Industry,” 181.3 million Americans play video games. Other findings from the report include:
• 51% of U.S. households own a game console, and those that do own an average of two;
• The average game player is 31 years old, and 39% of game players – the largest age segment – are 36 or older;
• 44% of gamers play on smartphones, and 33% play on wireless devices; and
• Casual and social game play on mobile devices and online increased in popularity by 55% from 2012 to 2013.
LOWE’S NAMES CUSTOMER EXPERIENCE EXECUTIVES
Mooresville, N.C. -- Lowe’s Cos. has named Joseph M. (Mike) Mabry as strategy and experience design executive, replacing Robert J. Gfeller who left the company last month. Michael P. McDermott has been promoted to chief merchandising officer, replacing Michael A. Jones, who will assume the role of chief customer officer, effective April 30. In his new role, Mabry will focus on developing U.S. strategy, aligning experience design and building a capabilities roadmap that delivers omni-channel customer experiences across the company's U.S. business. He will retain responsibility for digital interfaces, including Lowes.com and ATGstores.com. Mabry joined Lowe's in 2003 and led the company's supply chain organization until 2012 when he was named digital interfaces executive. McDermott will be responsible for the merchandising offering for Lowe's U.S. business, pricing and promotion, and all global sourcing activities. He joined Lowe's in 2013 as senior VP, general merchandising manager-building and maintenance.
HERRICK ACQUIRES 44 CVS-LEASED RETAIL PROPERTIES FOR $190 MILLION
Boca Raton, Fla. – Real estate investment firm The Herrick Company Inc., has acquired 44 retail/pharmacy properties located throughout the U.S. The properties, all of which are occupied under long-term triple net leases with CVS Caremark, were acquired for approximately $190 million. The transaction reflects The Herrick Company's continued strategy of investing in single-tenant, long-term net leased assets that are occupied by credit tenants. The CVS leases in the recently acquired portfolio each have 25 years remaining on the term. Affiliates of The Herrick Company purchased the CVS portfolio from private equity firm Fortress Investment Group LLC, with debt financing for the acquisition provided by a consortium of capital sources under a private placement arrangement. "In real estate, there are few investment opportunities as desirable as properties that are leased on a triple net basis by creditworthy tenants such as CVS," said Norton Herrick, chairman of The Herrick Company. "As we actively seek out additional investment opportunities that fit our requirements, we're intently focused on acquiring this type of stable, low-management-intensive property in the retail, industrial and office sectors."
RUSSIA’S LAVROV: WEST PLOTTING TO CONTROL UKRAINE
Russia’s economy felt the sting of the Ukrainian crisis Friday after Standard & Poor’s cut its credit rating to near junk and Moscow hiked interest rates to keep its sliding ruble from fueling inflation. The impact could get harder as the West threatens additional sanctions. Still, Russia is showing no signs of backing down, saying Friday that pro-Russian insurgents in Ukraine’s southeast will lay down their arms only if the Ukrainian government clears out nationalist protesters in Kyiv.
A FADING MIDDLE-CLASS PERK: LOWER MORTGAGE RATES
WASHINGTON (AP) — For three decades, the U.S. middle class enjoyed a rare financial advantage over the wealthy: lower mortgage rates. Now, even that perk is fading away. Most ordinary homebuyers are paying the same or higher rates than the fortunate few who can afford much more. Rates for a conventional 30-year fixed mortgage are averaging 4.48%, according to Bankrate. For “jumbo” mortgages — those above $417,000 in much of the country — the average is 4.47%. This trend reflects the widening wealth gap between the richest Americans and everyone else. Bankers now view jumbo borrowers as safer and shrewder bets even though conventional borrowers put less capital at risk.
RETAILERS GET CREATIVE WITH PINTEREST
NEW YORK (AP) — Target, Nordstrom and other big chains are pinning their hopes of attracting shoppers on social media. Retailers increasingly are using Pinterest, a social media site that allows users to create collections of photos, articles, recipes and more as “pins”, to draw business to their own sites. Target, the nation’s No. 2 discounter, is creating exclusive party-planning collections with top Pinterest users. Shoes, handbags and other popular items on Pinterest are being prominently displayed in Nordstrom stores with special tags. And Caribou created a coffee blend that was inspired by the coffee chain’s Pinterest fans.
HK BANKERS ADD TO CALLS FOR DEMOCRACY FROM BEIJING
HONG KONG (AP) — A group of Hong Kong finance industry professionals are pledging to join an Occupy-style movement to protest growing influence from Beijing that they say is undermining the Asian financial hub’s economy. The bankers, traders and stockbrokers who make up Hong Kong’s financial-worker class are notoriously apolitical. But the group, which currently numbers about 70 people, added their voices to wider calls for full democracy in an open letter to China’s President Xi Jinping. Worried that Hong Kong’s high degree of autonomy is being eroded, they urged China’s Communist leaders to stop interfering in the city’s administrative affairs. They also expressed fears about growing threats to the city’s freedom of speech and the press, rule of law and strong anti-corruption culture.
US CONSUMER CONFIDENCE JUMPS TO 9-MONTH HIGH
WASHINGTON (AP) — U.S. consumer confidence surged in April, approaching the highest level since the recession began in 2007 as Americans reported greater optimism about their financial situation and the economy. The University of Michigan says its index of consumer sentiment rose to 84.1 in April from 80 in March. Americans have cut back on debt and benefited from steady hiring and rising stock and home prices. Just 28 per cent said this month that their finances were getting worse, down from 37 per cent in March and the lowest level since April 2007. Americans were also slightly more optimistic about future hiring, the survey found, though the gains were slight.
FORD’S PROFIT FALLS 39 PER CENT IN Q1
DEARBORN, Mich. (AP) — Ford Motor Co.’s worldwide sales rose in the first quarter, propelled by growing strength in Asia and Europe. But weakness in North America dragged down the company’s profit. Its earnings missed Wall Street’s expectations, while revenue beat them. Also Friday, CEO Alan Mulally said that there is no change in the plan for him to stay with the company at least through the end of this year. In 2012, Ford named former North America chief Mark Fields as chief operating officer to handle day-to-day duties, and Fields became the heir apparent to take over for Mulally. Recent reports suggested that Mulally plans to leave the company sooner than expected and that Fields would become CEO.
BURGER KING’S PROFIT RISES ON COST CUTS
NEW YORK (AP) — Burger King reported a higher first-quarter profit on Friday as new restaurant openings overseas and lower costs offset weak sales in the U.S. The Miami-based chain on Friday said sales at established U.S. locations edged up just 0.1%, dampened by bad weather. McDonald’s and Taco Bell also reported underwhelming domestic sales for the first three months of the year, citing the severe weather. Chipotle and Starbucks, which charge higher prices, saw healthy sales gains under the same conditions.
UAW OFFICIAL NOMINATED FOR SEAT ON GM BOARD
DETROIT (AP) — General Motors Co. could, for the first time, have an official of the United Auto Workers union on its board of directors. UAW Vice-President Joe Ashton was nominated to a board seat controlled by a UAW trust fund that pays retiree health care bills. He plans to retire from his union post in June. The move is a first for General Motors, and a sign of how the relationship between the company and the union has changed in the past decade. If elected at the company’s annual meeting in Detroit in June, Ashton would replace former GM Vice Chairman Steve Girsky as the trust’s voice on the board. Girsky has been nominated to stay on with a different seat.
NOKIA, MICROSOFT COMPLETE $7.5B CELLPHONE DEAL
HELSINKI (AP) — Nokia says it has completed the 5.44 billion-euro ($7.5 billion) sale of its troubled cellphone and services division to Microsoft Corp., ending a chapter in the former world leading cellphone maker’s history. The Friday closure of the deal follows delays in global regulatory approvals and ends the production of mobile phones by the Finnish company. Nokia said the total transaction price would be “slightly higher” than originally thought because of adjustments made for net working capital and cash earnings. The deal was to have closed during the first quarter but was held up because of delays in approvals, including from China.
WHERE WILL CALORIE LABELS APPEAR? NOT JUST MENUS
WASHINGTON (AP) — Diners could soon see calorie counts on the menus of chain restaurants. But will they be able to get that same clear information at grocery stores, convenience stores, movie theatres or airplanes? The food industry is closely watching the Food and Drug Administration to see what establishments are included in the final menu labeling rules, which are expected this year. Non-restaurant establishments have lobbied hard for exemption, and the rules have been delayed. FDA Commissioner Margaret Hamburg told Congress earlier this month that writing the rules has been “much more challenging than expected.” The agency has sent the rules to the White House, meaning they could be released soon.