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Target profits decline in first quarter, but company sees strong omnichannel sales growth

BY Alaric DeArment

MINNEAPOLIS — Colder weather and more conservative shoppers contributed to a drop in Target Corp.’s first-quarter 2013 profits, but the company’s underlying business remains healthy, executives said Wednesday morning in a conference call with investors.

"While we are not satisfied with this quarter’s performance, we remain highly confident in our strategy," president, chairman and CEO Gregg Steinhafel said during the call.

Despite lower sales in seasonal and weather-sensitive categories, comps in such categories as health, personal care and consumables were strongest, experiencing single-digit growth.

The company’s has made significant investments in its mobile and online business, which Steinhafel said is "rapidly becoming the key platform for digital commerce across all retail." For target, digital sales have been growing in the "high teens," while the company has seen triple-digit mobile-channel sales.

That includes Cartwheel, an app launched under partnership with Facebook that Target is beta testing. The app allows users to find offers on products by browsing the system or looking at friends’ activities and add up to 10 to a favorites list, being able to purchase the item once a red check appears in the corner of the offer card and print a special barcode from their desktop computers or use their mobile devices in-store to access it. During the call, EVP merchandising and supply chain Kathryn Tesija said thousands of users had signed up for Cartwheel in the first week.

The company has also continued testing its same-day delivery services with Google and eBay, which started in the San Francisco area earlier this year.

Most recently, Target has been testing an online movie- and TV-streaming service called Target Ticket, and the company announced the opening of a San Francisco Office that will allow it to tap Silicon Valley talent to develop new omnichannel products.

In terms of new stores, Target plans to open 20 more in Canada later in the quarter, for a total of 124 stores by the end of the year. It also opened six new U.S. stores in the first quarter, including its sixth small-format City Target location, in Los Angeles. Tiseja said that while it was too early to draw any lessons from the Canadian stores, it had applied some ideas from the City Target stores in Canada, as both tend to be located in relatively dense urban areas.

The mass-merchandise retailer reported U.S. sales of $16.6 billion, a 0.5% increase over last year’s $16.5 billion, while comps declined by 0.6%. The chain’s new Canadian segment’s first 24 stores registered sales of $86 million. Profit for the quarter was $498 million, down from $697 million last year.

 

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Safeway Foundation partners with actress Marcia Cross in prostate cancer PSA

BY Jason Owen

LOS ANGELES and NEW YORK — The Safeway Foundation and Stand Up To Cancer, a program of the Entertainment Industry Foundation, have teamed up to develop a print, radio and digital public service announcement featuring actress and SU2C Ambassador Marcia Cross. The PSA is designed to increase awareness for the fight against prostate cancer.

Prostate cancer is the second-leading cause of cancer death for men in the United States, and currently affects more than two million American men. One-in-six men will be diagnosed with prostate cancer in their lifetime.

Debuting this June, the public service campaign coincides with Safeway’s annual in-store Prostate Cancer Awareness fundraiser, providing customers with multiple opportunities to give at more than 1,400 Safeway stores across the United States. The public service campaign will continue through the month, which includes the national observance of Father’s Day on Sunday, June 16.

At the center of the public service campaign is a limited edition, reusable shopping bag, embossed with the words, "It starts with a wish; it can end with a cure." The bag will be available for purchase at all Safeway banner stores, including Vons, Pavilions, Tom Thumb, Randalls, Dominick’s and Carrs stores, as well as online at safewayfoundation.org. Proceeds will support accelerated prostate cancer research. Additionally, Safeway shoppers will have a chance to make a separate donation at check-out.

Emmy Award and Golden Globe nominee Marcia Cross is best known for her roles on the award-winning series "Desperate Housewives" and the original "Melrose Place."

"I’ve seen too many men in my life affected by cancer," Cross said. "I am proud to be a part of the effort to support important cancer research that can save lives. My hope is that we can help increase survivorship among men affected by prostate cancer."

"We are thrilled to collaborate with our friends at Stand Up To Cancer and Marcia Cross to further increase awareness of prostate cancer," said Larree Renda, chair of The Safeway Foundation. "Stand Up To Cancer’s scientists are taking cancer research to the next level, and we are committed to helping them in their effort to make meaningful advances in patient care."

The collaborative campaign represents a continued dedication to prostate cancer research and awareness for both The Safeway Foundation and SU2C.

The Safeway Foundation’s donation to SU2C helps fund two Dream Teams focused on prostate cancer. The first team’s project, titled "Precision Therapy for Advanced Prostate Cancer," is led by Arul M. Chinnaiyan, M.D., Ph.D., S.P., Hicks endowed professor of pathology and professor of urology at the University of Michigan in Ann Arbor, and Charles L. Sawyers, M.D., chairman of the Human Oncology and Pathogenesis Program at Memorial Sloan-Kettering Cancer Center. The second Dream Team project, titled "Targeting Adaptive Pathways in Metastatic Treatment-Resistant Prostate Cancer," is led by Eric J. Small, M.D., professor of medicine and urology and chief of the division of hematology and oncology at the University of California, San Francisco, and Owen N. Witte, M.D., distinguished professor of microbiology, immunology and molecular genetics at the University of California, Los Angeles, and distinguished professor of molecular and medical pharmacology at UCLA’s David Geffen School of Medicine. In total, these two teams have 109 scientists at 22 institutions.

To date, Safeway and The Safeway Foundation have raised $84.5 million for the Prostate Cancer Foundation, the world’s largest philanthropic source of support for prostate cancer research. Those donations, provided by Safeway’s generous customers, have helped fund 1,600 prostate cancer research projects, providing hope for treatment and cures.

Since 2008, the Prostate Cancer Foundation has funded nearly 100 cancer investigators (in 7 countries and 44 cancer centers) whose innovative research ideas are accelerating discovery and progress.

New advances in early detection funded by The Safeway Foundation include a urine test to detect a unique piece of DNA found only in prostate cancer cells that can now be detected. This test has the potential to catch prostate cancer many years earlier than it has typically been detected in the past. Together with a PSA test and a checkup, it will help doctors determine who has prostate cancer and thus prevent patients from undergoing unnecessary biopsies.

"We’re profoundly grateful to Marcia Cross and The Safeway Foundation for helping us spur more important conversations about prostate cancer, and for making it so easy for the public to support research that will lead to newer, more effective therapies," said Lisa Paulsen, co-founder of Stand Up To Cancer and CEO of the Entertainment Industry Foundation.

For more information on the campaign, visit safewayfoundation.org or standup2cancer.org. To join the conversation, like us on Facebook at @StandUpToCancer or follow us on Twitter at @SU2C.


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FDA approves Sandoz hypertension drug

BY Alaric DeArment

PRINCETON, N.J. — The Food and Drug Administration has approved a generic heart-disease drug made by Sandoz, the company said Wednesday.

Sandoz, the generics division of Swiss drug maker Novartis, announced the approval of candesartan cilexetil tablets, a generic version of AstraZeneca’s Atacand.

The drug is used to treat some types of heart failure in adults with left ventricular systolic dysfunction, as well as high blood pressure in adults and children as young as 1.

Atacand had sales of $120.3 million in 2012, according to IMS Health.


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