Tough Q1, new facility for AEO
A chilly spring combined with a challenging economy hurt American Eagle Outfitters' first-quarter results, as the South Side teen clothing retailer reported net income of $28 million, or 14 cents per share, in the three months ended May 4, compared to $40 million, or 20 cents, in the same period a year ago. Adjusted earnings from continuing operations were 18 cents per share, a penny above analysts expectations. Net revenue fell 4 percent to $679 million vs. $709 million a year ago. Sales in stores open at least a year, including online sales, fell 5 percent.
In a separate development, the company said it plans to build a 1-million-square-foot distribution center in Luzerne County. According to an announcement from the state, the company will invest more than $160 million and create 369 jobs, with additional positions during peak seasons. The Department of Community and Economic Development has given the project a $400,000 Pennsylvania First Program grant and $166,050 Guaranteed Free Training grant to help in training.
Cigna prepares for settlement
Insurance company Cigna Corp. has set aside $77 million to cover potential claim payments as part of a settlement with insurance regulators in five states, including Pennsylvania. The settlement concerns Cigna's handling of long-term disability claims, the state Insurance Department said Wednesday. In addition to Pennsylvania, California, Connecticut, Maine and Massachusetts participated in the settlement, which earmarks $48 million for old long-term cases and $29 million for open claims.
Green Tree firm going mobile
GiftCards.com, a Green Tree-based gift card distributor, has agreed to acquire mobile gifting app Giftly, a 2-year-old startup in San Francisco that helps customers buy and deliver digital gift credits. Giftly will keep its offices in San Francisco. GiftCards.com is talking to venture firms and investors to raise money for expansion.
Bruster's eyes franchise costs
Bruster's Real Ice Cream, a 200-unit chain based in Bridgewater, announced it is working to reduce investment and operational costs in order to attract new franchisees. The plan calls for adding sites with indoor seating and products such as fresh fruit smoothies with protein powder. A shift from stand-alone buildings to smaller units that can go into shopping centers could drop development costs from $1 million to $250,000, the company said.
Evian unveils new bottle
Evian is giving itself a facelift to keep up with its competitors on store shelves. The water, which is owned by French food and beverage company Danone, is unveiling a new bottle for the first time in 14 years. The new look has cleaner lines, reminiscent of the Smartwater bottle.
Building contracts here drop
A significant decline in contracts for nonresidential buildings caused the value of all contracts for future construction in the Pittsburgh region to fall by 27 percent in April, McGraw-Hill Construction reported. Nonresidential contracts for the month were down 43 percent from April 2012, to $64.1 million, while residential contracts slipped just 1 percent to $71 million. For the year to date, contracts were 7 percent lower than the first four months of 2012 with a total value of $558.2 million. The region includes Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties.
Existing-home sales rise
Existing-home sales nationwide rose in April to hit the highest rate since November 2009, the National Association of Realtors reported Wednesday. Sales of existing homes in April were 9.7 percent higher than during the same period in the prior year. Median prices hit $192,800 in April, the highest since 2008, up 11 percent from the same period in the prior year.
Also in business...
John Lovelace, president of UPMC for You, will receive the Frieda Shapira Medal for Exemplary Leadership today at the annual Greater Pittsburgh Nonprofit Summit at the Wyndham Grand Pittsburgh, Downtown. UPMC for You provides health care coverage for medical assistance recipients and Medicare beneficiaries.
From staff and wire reports