CEO Comments: September

Barnes & Noble on in-store music sales, online sales growth, and offering e-commerce exclusive items (weren't we supposed to have the exact same experience across all channels?).

PetSmart profit was down --- and there was a comment about the customer database, at least twice. Notice the comment about using the database to focus on profitable promotions, ugh.

Kenneth Cole takes a bath, will shift focus from fashion items to basics. Isn't this a classic trend that repeats (upswing = fashion, downturn = basics).

Zales drives a 6% comp store increase, but with a margin reduction, sees a huge drop in profitability. Clearance represented 20% of sales. Wow. Direct marketing and catalogs reflect the "brand position", with less density (always an interesting strategy --- less density). E-commerce is +30% for the year.

Blue Nile, Chicos, PetSmart and NASCAR

A few tidbits from recent investor conference calls, courtesy of 123Jump.

At Blue Nile, management states that it measures market productivity by summing sales in a market (San Francisco), and dividing sales by the number of people living in the market. In markets like San Francisco, they claim to generate $2.00 sales per person. In rural markets, they claim to drive maybe $0.30 per person.

At Chicos, management discussed a change in advertising strategy, yet another one that benefits compiled databases, and spells doom for television and magazines. A quote, "the company was not able to quantify any real positive effect from television advertising". Management also states that coupons are the number one driver of sales for the company.

At PetSmart, the business generated 5.5% EBIT on sales of just over $3 billion dollars, through nine months. Management stated that they spend 2.4% of sales on marketing. That sounds small until you realize that, though nine months, the total is over $60 million dollars.

Ever wonder if NASCAR is a cash cow? International Motorsports, which owns many of the tracks NASCAR races at, earned $182.4 million in operating income on net sales of $544.9 million, through nine fiscal months. My goodness. How do I get a job there? That's simply stunning.