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American Greetings Corp. (AM) filed Quarterly Report for the period ended 2011-11-25.
American Greetings Corp. Cl A has a market cap of $514.7 million; its shares were traded at around $12.9 with a P/E ratio of 5.7 and P/S ratio of 0.3. The dividend yield of American Greetings Corp. Cl A stocks is 4.7%. American Greetings Corp. Cl A had an annual average earning growth of 20.5% over the past 5 years.
This is the annual revenues and earnings per share of AM over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of AM.
Highlight of Business Operations:
For the three months ended November 25, 2011, consolidated net sales were $457.1 million, an increase of $35.1 million, or 8.3%, from $422.0 million in the prior year third quarter. The improvement was primarily due to an increase in net sales of greeting cards of approximately $23 million driven by the Watermark acquisition in our International Social Expression Products segment and additional distribution with existing customers in both of our North American Social Expression Products segment and International Social Expression Products segment. In addition, the current quarter also included higher giftwrap sales of approximately $16 million mainly in our North American Social Expression Products segment, and the impact of approximately $4 million of favorable foreign currency translation. Partially offsetting these increases were lower net sales in our AG Interactive segment of approximately $2 million due to lower advertising revenue and the impact of winding down the Photoworks website, and decreased sales of other ancillary products of approximately $5 million. In addition, scan-based trading (“SBT”) implementations unfavorably impacted net sales by approximately $1 million.For the nine months ended November 25, 2011, consolidated net sales were $1.21 billion, up from $1.15 billion in the prior year nine months. This 5.8%, or $66.2 million, improvement was primarily due to an increase in net sales of greeting cards of approximately $58 million driven by the Watermark acquisition in our International Social Expression Products segment and additional distribution with existing customers in both our North American Social Expression Products segment and International Social Expression Products segment. The nine month period also included higher giftwrap sales of approximately $14 million and the impact of approximately $21 million of favorable foreign currency translation. Partially offsetting these increases were decreased sales in our AG Interactive segment of approximately $6 million due to lower advertising revenue and the impact of winding down the Photoworks website, lower net sales in our fixtures business of approximately $5 million, and lower sales of other ancillary products such as party goods, ornaments and gift products of approximately $12 million. In addition, SBT implementations unfavorably impacted net sales by approximately $4 million over the nine month period.
SDM expenses for the nine months ended November 25, 2011 were $388.5 million, increasing from $347.2 million for the comparable period in the prior year. The increase of approximately $41 million was driven by a combination of increased expenses and unfavorable foreign currency translation of approximately $34 million and $7 million, respectively. Increased supply chain costs of approximately $21 million, including merchandiser, freight, and other distribution costs, were primarily the result of higher sales volume and initial store setup activities. Approximately $11 million of the higher supply chain costs were incremental roll-out costs associated with expanded distribution in the value channel. Also contributing to the increase was higher marketing expenses of approximately $11 million.
Total revenue of our North American Social Expression Products segment increased $14.4 million and $20.2 million for the three and nine months ended November 25, 2011, respectively, compared to the prior year periods. The increase in both periods was primarily driven by higher sales in everyday greeting cards and seasonal gift packaging products. Everyday card sales increased approximately $4 million and $12 million, while gift packaging products increased approximately $11 million and $6 million, for the three and nine month periods ended November 25, 2011, respectively. The nine month period also included favorable impacts of foreign currency translation of approximately $4 million as well as increased sales in seasonal cards of approximately $2 million. Partially offsetting these improvements were unfavorable SBT implementation impacts of approximately $1 million and $4 million for the three and nine month periods ended November 25, 2011, respectively.
Segment earnings decreased $30.8 million in the current year nine months ended November 25, 2011 compared to the prior year nine months ended November 26, 2010. The decrease was driven by higher supply chain costs of approximately $13 million primarily due to increased sales volume and store set up activities, which resulted in higher merchandiser, freight and other distribution costs. Approximately $11 million of the higher supply chain costs were incremental roll-out costs associated with expanded distribution in the value channel. Increased marketing expenses of approximately $12 million, product related display costs and bad debt expense of approximately $3 million each, and other expenses of approximately $7 million including inventory scrap and marketing research, also contributed to the decrease in earnings. In addition, SBT implementations unfavorably impacted earnings by approximately $4 million including approximately $1 million related to expanded distribution in the value channel. Gross margin dollars were only slightly higher despite higher sales volume, due to unfavorable product mix as a result of a
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