SEC Digest
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Kroger, Lululemon, RadioShack: Filings Digest September 11, 2014

In today’s SEC filings digest, Kroger profits jump, Lululemon beats expectations, and RadioShack needs more money.

Kroger profits jump

The Kroger Co. (KR) announced its financial results for the second quarter of fiscal year 2014, posting profits that jumped from the year-ago quarter. The grocery chain posted revenues of $25.3B, an 11.6% jump from last year, beating analyst predictions of $24.9B. Earnings rose also, from $317M and $0.60 per share to $347M and $0.70 per share, once again beating analyst expectations at $0.69 per share. Kroger leadership believes consumers are becoming more confident in the economy and are now beginning to purchase items they have done without when the economy was more tumultuous. Kroger’s comparable-store sales grew 4.8%, outperforming its rivals like Wal-Mart and Safeway. Kroger is optimistic about its future and is excited about its near completion of the Harris Teeter acquisition while also announcing plans to hire 20,000 permanent employees for its portfolio of stores.

Lululemon beats expectations

Lululemon Athletica Inc. (LULU) announced its second fiscal quarter financial results for 2014, raising its previously lowered earnings expectations. The yoga and athletic apparel maker saw earnings decline from the year-ago $56.5M and $0.39 per share to $48.7M and $0.33 per share, beating its estimated range between $0.28 and $0.30 per share. Revenue increased 13% to $390.7M, also beating its own projected range between $375M and $380M while gross margin tightened from 54% to 50.5%. Lululemon’s founder Dennis Wilson has disagreed with the direction the company is heading and resigned as Chairman in June and also voted against the new Chairman, Michael Casey. CEO Laurent Potdevin commented that the company is on track and making progress on executing its strategic growth goals.

RadioShack needs more money

RadioShack Corp. (RSH) announced its financial results for the second quarter of fiscal year 2014, posting its tenth consecutive quarter of losses. The electronics retailer lost $137.4M and $1.35 per share during the quarter, a substantial increase to the year-ago loss of $52.2M and $0.51 per share. Revenue fell from $861.4M to $673.8M, widely missing analyst predictions of $735.9M. RadioShack has continued to struggle to find its place in the rapidly evolving electronics retail environment, competing against online retailers and other companies that have taken its market share. RadioShack is working with a number of parties to restructure the company and its debt, consolidate stores, and cut costs in an effort to overhaul its balance sheet. Analysts opine that with operational decisions being vetted by creditors, management is no longer in charge and that bankruptcy is imminent.

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