Under Armour gets tax breaks
Tennessee officials have approved a $6.75 million incentive for Under Armour's planned distribution facility in Mount Juliet.
The Tennessee State Funding Board on Wednesday approved a FastTrack Economic Development Program grant. The Tennessee Department of Economic and Community Development recommended the incentive.
The sports apparel maker announced last week it plans to build a new $100 million distribution center projected to create 1,500 new jobs in the next five years. The money approved Wednesday is for equipment relocation, construction and related improvements and will go through the city of Mt. Juliet.
The facility is expected to open in early 2016. The average hourly wage will be $13.65, which Economic and Community Development Assistant Commissioner Allen Borden told the funding board is high for distribution jobs.
Penney warns of sales decline
Shares of J.C. Penney Co. fell more than 10 percent after the department store operator warned that its sales last month were weaker than expected and cut its outlook for a key sales measure for the current quarter.
The warning overshadowed the company's unveiling of a strategy at its analysts' meeting Wednesday that the retailer said would boost sales by $2.55 billion over the next three years. It would do so by improving the productivity of its home area, expanding e-commerce and sprucing up key areas like beauty, jewelry and accessories. It sees the opportunity for an additional $1 billion in sales in continued market-share growth.
While company officials blamed the current sales shortfall on too much clearance merchandise a year ago, they also cited a weak sales environment for retailers.
"J.C. Penney is in a far stronger position than it was when we began our turnaround 18 months ago," said Mike Ullman, who came back to the company's helm in April 2013. But he acknowledged there was still a lot of work to do.
Gap CEO to resign
Gap said late Wednesday that Glenn Murphy will resign as its chairman and chief executive on Feb. 1, and the retailer will promote its digital leader Art Peck to CEO.
The San Francisco company, which operates Gap, Old Navy and Banana Republic, said Murphy is resigning at the end of its current fiscal year. He has been Gap's chairman and CEO since July 2007 and oversaw a turnaround that has lost steam in recent months.
Gap shares fell in after-hours trading on the news. The company also announced weak sales for September.
During a conference call with analysts following the announcement, Murphy said he made a personal decision to retire because he couldn't commit to be at the helm for the next several years.
Online sales boost Costco profits
Costco Wholesale has been a bit stodgy when it comes to the Internet -- but its e-commerce sales boomed this year, helping it beat Wall Street expectations when it posted year-end results Wednesday.
Online sales represent only 3 percent of its $110.2 billion in sales for the fiscal year ended in August, or about $3.3 billion; Nordstrom, by comparison, relies on the web for more than 15 percent of its retail sales. The pace of online growth surpassed that of Costco's giant warehouse stores: Sales online rose 18 percent to 19 percent for both the fourth quarter and the fiscal year, versus 6 percent sales growth for the company as a whole.
Online sales are more lucrative, too, said chief financial officer Richard Galanti in a conference call with investors. That boost helped pad Costco's margins, leading to a surprise rise in earnings when most analysts expected the year to end on a down note.
"E-commerce is definitely quite a bit more profitable than the rest of the company. And so 3 percent of sales implies a greater percent increase of earnings," Galanti said.