Financial News

NEW YORK — Capital spending for the retail industry is expected to increase 16% in 2011 to $42.5 billion, with all subsegments projecting double-digit percentage increases — except for mass merchants, whose growth is projected to rise 9% — according to a survey by Equity Research.

Although capital spending will be up, it remains well below 2007’s peak of $56 billion. Also, unlike these peak years when a significant portion of spending was dedicated to new store growth, the emphasis will be on maintenance, infrastructure upgrades, e-commerce and remodels.

GOODLETTSVILLE, Tenn. — Sales and profits continued to pile up at Dollar General during the first quarter as shoppers sought value at the retailer’s 9,500 stores.

The company reported a 5.4% increase in same-store sales and said total sales increased 10.9% to $3.45 billion during the quarter ended April 29. Profits adjusted to account for several one-time items increased 14% to $166 million, while earnings per share of 48 cents were 2 cents shy of analysts’ consensus estimate due to gross margins pressures.

TOKYO — Japanese cosmetics company Pola Orbis Holdings plans to acquire H2O Plus, a privately held developer, manufacturer and marketer of prestige, branded marine-based natural skin care products for the face and body.

Headquartered in Chicago, H2O Plus is majority-owned by investment companies Cordova, Smart & Williams and New MainStream Capital, as well as Robert Seidl and other members of senior management.

The transaction is subject to customary regulatory approvals and is expected to close in July.

HAWTHORNE, N.Y. — Taro realized a 21% increase in net sales for its first quarter, the drug maker said.

The company said it raked in net sales of $107.7 million, an increase of $18.7 million. Diluted earnings per share totaled 58 cents, compared with 21 cents in the prior-year period.

Operating income for Taro increased 84.4% to $33.4 million, or 31% of net sales, compared with $18.1 million, or 20.3% of net sales, in 2010.

During the period, Taro received three abbreviated new drug applications from the Food and Drug Administration.

WASHINGTON — Consumers will show their love for Dad this year by spending more on Father's Day gifts than in the prior year, according to the National Retail Federation.

According to NRF’s Consumer Intentions and Actions Father’s Day survey, conducted by BIGresearch, U.S. consumers will spend an average of $106.49, up from $94.32 last year and the most in the survey’s eight-year history. What's more, the spending gap between Mother's Day and Father's Day substantially has narrowed.

ISSAQUAH, Wash. — Costco Wholesale EVP, CFO and director Richard Galanti told investors during the company’s third quarter 2011 earnings call last week that average prices in pharmacy probably would decline due to the introduction of generic versions of branded drugs.

“[The] only area where you are going to see some average price declines is probably in pharmacy where, and we've all read about it, there is some very well-known branded items that are going to become generic this coming year,” Galanti said.

MEMPHIS, Tenn. — Fred's net income increased 16% to $9.5 million, or 24 cents per diluted share, compared with net income of $8.2 million, or 21 cents per diluted share in the year-earlier period.

The retailer said that total sales rose 3% to $484.4 million from $471.6 million for the same period last year. For comps, Fred's reported a 1% rise on top of a 2.2% increase for the first quarter last year.

Fred's gross profit for first quarter 2011 increased 1% to $137.9 million from $136.9 million in the prior-year period.

MONTVALE, N.J. — Grocer A&P recently completed the previously announced auction of 25 Southern Superfresh locations as it continues to implement its financial and operational restructuring, the company announced on Wednesday.

The winning bids, which are subject to approval from the bankruptcy court before the sales would be completed, will be listed in motions of the company to be filed with the court on May 27. The winning bids are as follows: