Wal-Mart Stores has been known to surprise Wall Street on occasion but when the retail giant reports its fiscal 2016 first quarter earnings on Tuesday (May 19) consensus is there won’t be much to celebrate.

The average earnings per share estimate is $1.04, which would be 5.4% shy of last year’s earnings, according to 26 analysts who follow the retailer’s financial performance.

Veteran analyst Water Loeb, of Loeb Associates, expects disappointing results from Wal-Mart Stores. He said the retailer is not the store of choice for too many. He expects a 1% to 2% increase in Wal-Mart’s sales citing ongoing difficulties in gaining momentum this year, despite new management and investments in e-commerce.

Wal-Mart recently guided downward with its first quarter earnings per share forecast which is between 95 cents and $1.10. The retailer noted in the previous earnings statement that its decision to invest $1 billion annually in pay raises and for its U.S. store employees and additional investments in e-commerce would trim earnings by as much 26 cents to 29 cents per share.

Loeb is not alone in his assessment as much of the retail sector has been sluggish in the quarter (February through April) as reported retail sales across the board have been weaker than expected despite lower gasoline prices.

"There is no denying that the lack of evidence of a pick-up in consumption growth is disappointing given the boost to purchasing power from lower energy prices," Capital Economics' Paul Ashworth said. "But even though we haven't seen it feeding through yet, we do still expect to see that acceleration soon.”

Walmart U.S. CEO Greg Foran also previously forecast bottom line pressures this year, noting that it’s going to take time to improve overall performance. His agenda to boost financials includes improved customer service, store experience, fresh quality and improved values in private label products.

Wal-Mart forecast U.S. comparable sales growth between 1% and 2% in the first quarter. The same was predicted for Sam’s Club.

Stephens Inc. analyst John Lawrence expects comp sales at the low end of that guidance at 1% for Walmart U.S. and Sam’s. Lawrence does see some upside in the stock giving it a target price of $97. He also predicts first quarter earnings per share of $1.03 at the lower end of the guidance, but believes the retailer may gain some momentum in future quarters.

Raymond James & Associates analyst Budd Bugatch predicts earnings per share of $1.03. He recently downgraded his prediction from $1.11 following cautious sentiment from management during the earnings call in mid-February. He also cites the $10 billion drag Wal-Mart anticipates this year from currency exchange rates against a stronger U.S. dollar as an impact to earnings.

Wall Street expects Wal-Mart’s total consolidated revenue to top $116.32 billion, up 1.2% from the year-ago period.

Stacey Widlitz, founder of SW Retail Advisors, and CNBC retail contributor, expects a weakened cycle for the retail sector citing tough comps from Macy’s and Costco, which had been the stars in recent quarters. She said among retailers who do muster decent comp sales like J.C. Penney, there is evidence of shrinking margins and pressures on top and bottom lines.

Widlitz said margins and internal costs will be something to watch among retailer earnings. She also said the overall retail pie is not growing so there are more efforts to steal market share which lends to promotional pricing and even more pressure on margins.

Investors have also steered clear of Wal-Mart shares (NYSE: WMt) in recent weeks as the retail stock price is down 8.89% year to date. At Wednesday’s closing price of $78.16, shares were down 9.07% in the past three months. The share price is up 1.73% from a year ago. 

Against the composite Dow Jones Industrial Average Wal-Mart shares have been the lagger. The Dow Jones Industrial Index is up 1.33% year-to-date. Over the last three months the composite index is up 0.07%. Compared to a year-ago the composite value rose 9.81%.

News that Walmart.com would begin testing a $50 subscription that provides unlimited deliveries to online shoppers within three days, did not come as a surprise to some. Market watchers say it is not enough to threaten Amazon with its Prime program.

The retail giant confirmed Wednesday (May 13) that it planned to test a subscription plan this summer by invitation only. The plan will cover about 1 million items of general merchandise and does not include video upstreaming or other features offered by Amazon Prime, which costs consumers $99 a year.

Annibal Sodero, supply chain expert at the University of Arkansas, said he has waited two years for a surprise from Wal-Mart, but the subscription test looks like the retail giant is playing a game of catch-up. While he’s seen some interesting applications like Scan and Go that address consumer issues, Sodero said too often Wal-Mart is the second mover.

He also questioned why Wal-Mart decided to test a subscription-based service which is a loyalty program at its core. Sodero said Amazon aligns everything around loyalty with Prime users who often see the $99 as a value play given the benefits of streaming video, Box, Dash and price check apps that provide for convenience and savings in time and money.

“You have to ask what is Wal-Mart’s goal with this subscription test? Will it promote loyalty in its limited scope and what might be the consequences to its other businesses like Sam’s Club,” Sodero noted.

He said Amazon Dash goes directly after Costco customers and wonders if folks who sign up for Walmart’s subscription might forego a Sam’s Club membership in exchange. An avid Amazon user himself, Sodero was recently in New York City on business when he discovered he left his voice recorder at home.

“As an Amazon Prime member, I quickly downloaded the Amazon Prime Now app, found the recorder and batteries I needed, ordered, and it was delivered to my hotel room in two hours for free,” Sodero said.

He doesn’t think Wal-Mart beats Amazon by mimicking their programs, but said Wal-Mart does have an opportunity to innovate solutions that use its massive infrastructure to its advantage. He applauds the use of in-store pickup.

Max Goldberg, retail expert and president of Max Goldberg & Associates, noted in a recent RetailWire blog: “Walmart once again finds itself playing catch-up in the digital world and resorts to a time-tested technique, cutting prices .... This time it won’t work.”

He said while the new Walmart offer will spur some signups, it will not threaten Amazon’s digital dominance.

Mohamed Amer, vice president with SAP Global Retail, said it makes sense for Walmart.com to test the waters to better understand the trade-off consumers make between delivery window and program fees. But he cautioned that Amazon Prime is a hard act to follow.

Carol Spieckerman, CEO of newmarketbuilders, said Wal-Mart’s subscription-based foray is clearly in beta stage so it would be premature to make any judgments about how, or if, it will roll out. That said, Spieckerman believes the potential is tremendous. She said the media often judges Walmart based on outdated assumptions, including pinning the Walmart shopper as being behind the digital shopping curve, which is not the case today. 

“Clearly, Walmart shoppers are ordering products online and utilizing all of Walmart’s current delivery and pick-up options. The real opportunity and scale will kick in when and if Walmart ties its third-party online marketplace sellers into the program. Then and only then will Walmart have true ‘Amazonian’ potential from a product standpoint,” Spieckerman said

The subscription service and other non-traditional retail moves by Wal-Mart have caused Sodero to wonder about the future role of the supercenter. Kantar Retail analyst Leon Nicholas said two years ago that Wal-Mart’s supercenters remain the cash cows, and while Neighborhood Market store growth has improved, it’s still the supercenter generating the bulk of the retailer’s revenue.

Sodero said if Wal-Mart really wanted to compete head-to-head with Amazon they would need to flip their focus to San Bruno and perhaps turn their massive store network into fulfillment centers. But no one expects that to ever happen, given the success of the supercenter profit structure.

The dangers he sees in Walmart.com testing a loyalty subscription plan is that it will need to exceed shopper expectations which raises the bar for everyone along the supply chain.

“If there are any weaknesses in the supply chain they will become exposed. There are also higher costs associated with last mile delivery which has to be funded by someone, if not the retailer, then it will be suppliers,” Sodero said.

He said if the subscription test is successful for Walmart.com, it would be good for business in a sense that subscription plans lock users into a relationship with the retailer. But if the retailer under delivers in any way there is little chance they will get that customer back.

Memorial Day weekend will be a working weekend for the signage company hired by Muskogee, Okla.-based Armstrong Bank. The weekend will see Armstrong signs replace Benefit Bank signs in the Fort Smith area and Northwest Arkansas as part of a deal that could see Armstrong Bank rise to the top five in Fort Smith metro deposit market share.

Ironhorse Financial Group, a privately held bank holding company and parent company of Armstrong Bank, announced Dec. 29 it would acquire Fort Smith-based Benefit Bank.  Terms of the deal have not been disclosed. Armstrong Bank was established in 1910, and has 17 banking locations in northern and eastern Oklahoma along the Interstate 40 corridor. Benefit Bank, organized in 1999, has four full-service branches in the Fort Smith area and a loan production office in Springdale.

Gary Andrews, Armstrong’s regional president over Fort Smith and Northwest Arkansas, said the conversion process is underway between the two banks and new signage will be installed over the Memorial Day weekend. A signage unveiling ceremony is set for 10 a.m., May 26, at the bank location on Massard Avenue (and near Phoenix Avenue).

“We’re excited about coming to Fort smith and to our Springdale office there in Northwest Arkansas.  ... It’s a great team that was assembled there by him (former Benefit Bank President Joe Edwards) and we’re looking forward to working with them,” Andrews said.

The company has also worked to coordinate with Benefit Bank customers. Part of that includes a guidebook designed to help Benefit Bank customers transition to Armstrong.

MARKET SHARE GROWTH
Customers who do stick with Armstrong will be part of a larger bank company. Armstrong Bank reported first quarter net income of $3.693 million, down from $4.411 million during the first quarter of 2014. The bank ended 2014 with net income of $16.332 million, better than the $13.98 million in 2013 and up 37% over the $11.914 million in 2012.

Armstrong ended the first quarter with $689.453 million in assets, and total deposits of $588.73 million. Ironhorse Financial, which also owns Norman, Okla.-based Republic Bank, has combined assets with the Benefit Bank acquisition of more than $1.3 billion.

Benefit Bank had $194.68 million in assets at the end of the first quarter. Benefit Bank net income in 2014 was $1.436 million, up from $1.076 million in 2013, and well ahead of the $871,000 in 2012.

Armstrong now has 22 locations in eastern Oklahoma and western Arkansas. Andrews, a 30-year veteran with Armstrong, joined the bank out of college when it had just two offices. The bank will employ around 300 people post-acquisition, Andrews said.

That growth includes growth in deposit market share. As of June 30 2014, the most recent FDIC market share report, Armstrong Bank had four bank locations inside the Fort Smith metro market and a market share of 4.09%. By comparison, First National Bank of Fort Smith had the most metro market share at 21.35%, with Arvest Bank at 16.51% and BancorpSouth rounding out the top three at 11.23%.

Benefit Bank had five locations in the metro market with 3.61% of market share. 

If Armstrong is able to retain deposits through the acquisition, it would move the bank into the top five for metro market share. Citizens Bank & Trust in Van Buren – owned by the parent company of First National Bank of Fort Smith – had a market share of 7.71% and Regions Bank rounded out the top five at 4.95%.

LOOKING AT NORTHWEST ARKANSAS
Andrews said Armstrong Bank also will “investigate” new opportunities in the “highly, highly competitive” Northwest Arkansas banking sector. Prior to the acquisition, Benefit Bank obtained state approval to convert its Springdale loan production office into a full-service branch bank. Armstrong was able to retain that approval.

“We’re going to go up there (Northwest Arkansas) and try to carve out a niche and compete and do the best we can,” Andrews said.

How competitive is Northwest Arkansas? The region has 39 bank institutions active in a market with $8.552 billion in deposits, compared to a central Arkansas market with $14.778 billion in deposits among 35 active banks.

And Ironhorse Financial with more than $1.3 billion in assets could attract the attention of larger regional and national banks. Consolidation through mergers and acquisition has been the banking industry story in recent years. For example, the number of banks in Arkansas at the end of 2014 was 109, down from 120 at the end of 2013. It’s a similar story in Oklahoma, with 221 banks at the end of 2014 compared to 229 at the end of 2013.

Andrews said Armstrong “ownership (is) still in an acquiring mode and to my knowledge there is no design on selling.”

Shares in Little Rock department store owner, Dillard’s Inc., closed down in trading Thursday after the retail giant reported that quarterly earnings were down 10 cents from the same period a year ago.

For the 13-week period ended May 2, Dillard’s reported net income of $109.6 million, or $2.66 per share, down 1.9% from $111.7 million, or $2.56 per share, in the first quarter of 2014. Dillard’s revenue, which includes sales from the company’s construction business, CDI Contractors, rose slightly to $1.57 billion, compared to $1.55 billion a year ago.

“We are disappointed with our first quarter performance. Our 1% sales decline hampered our ability to leverage operating expenses and to drive net income growth. Although inventory is higher than we would like, we believe the levels are manageable,” said Dillard’s CEO William Dillard II.

Other highlights of the quarter include:
• Total merchandise sales fell 1.3% to $1.51 billion in the first quarter of 2015, compared to $1.53 billion a year ago.

• Comparable store sales decreased 1% for the period.

• Sales trends were strongest in the juniors’ and children’s apparel category followed by shoes and ladies’ apparel. Sales were notably weak in the home and furniture category.

• Sales trends were strongest in the Eastern region, followed by the Central and Western regions, respectively.

• Dillard’s officials noted that sales in Texas performed slightly below the company average in the first quarter.

Gross margin in the first quarter from retail operations improved 52 basis points of sales from a year ago. Consolidated gross margin declined 50 basis points of sales compared to the prior year first quarter. The disparity between retail and consolidated gross margin performance is attributable to increased revenue at CDI, which is a substantially lower margin business. Inventory increased 5% in the first quarter of 2015, compared to the same period in 2014.

Selling, general and administrative expenses rose 2.5% to $403.6 million, compared to $393.7 million a year earlier. Company officials said operating expenses from retail operations increased 101 basis points of sales to $402.3 million compared to $392.2 million in fiscal 2014. The increase was driven by increased payroll and services purchased expense partially offset by decreased insurance and advertising expense.

During the quarter, Dillard’s said it continued its initiative to increase pay for selling associates.

Meanwhile, Dillard’s said it has issued a new $1 billion senior unsecured credit facility, enhancing the retailer’s cash flow. The credit line replaces the department store giant’s earlier $1 billion secured credit facility and underscores its continued improvement in financial strength, company officials said.

At Thursday’s closing bell, Dillard’s stock (NYSE: DDS) ended the day at $124.20, down $2.34 or 1.85% as 855,000 shares traded hands, twice the Little Rock retailer’s normal volume. The retail giant, which currently has a market value of $5.12 billion, has traded in the range of $95.80 and $144.21 over the past 12 months.

Dillard’s shares were also sliding in after-hours trading after the retail giant fell below expectations. Wall Street had expected the Arkansas department store owner to report first quarter net income of $2.78 per share on revenue of $1.61 billion, according to Thomson Reuters.

Total manufacturing technology orders for the South Central region of the U.S. fell 51.9% in March compared to a year ago, according to a monthly report by the Association for Manufacturing Technology (AMT).

The South Central region, which includes Arkansas, Louisiana, Texas, Oklahoma and New Mexico, saw orders of only $84.91 million in the manufacturing technology sector, down from $176.56 million in March of 2014.

Obviously, a slowdown in manufacturing is not what Arkansas needs. Manufacturing employment in the state was an estimated 154,400 in March, up from 153,200 in March 2014, but almost 24% below 10 years ago when March 2005 manufacturing employment in Arkansas totaled 202,500. The March employment is 92,900 fewer jobs than peak manufacturing employment of 247,300 in February 1995.

The monthly AMT report tracks manufacturing technology orders on a regional basis for six geographic breakdowns of the United States. Manufacturing technology provides the tools that enable production of all manufactured goods, AMT officials said.

Nationwide, U.S. manufacturing technology orders totaled $399.83 million, up 30.3% from February’s $306.96 million, but down 18.7% when compared to $491.73 million reported for March 2014.

The biggest gainers for the month were the North Central-West and Northeast regions, which rose 23.9 and 11.8%, respectively, year over year. Like the South Central region, the North Central-East, Southeast and West regions all lost ground in March compared to a year ago, although most regions are seeing improved orders from the previous month.

Altogether, year-to-date orders as reported by companies participating in the manufacturing technology benchmark are now at $1.05 billion for fiscal 2015, down 12.7% when compared with 2014.

“There are many indications that our end-user customers are making significant investments in their manufacturing facilities to increase capacity, including GM’s announcement that it will invest billions in its U.S. plants,” said AMT President Douglas Woods. “Overall we expect the industry to hold steady with a push-pull between strong domestic investment(s) in manufacturing but a drag on foreign trade due to the dollar’s strength.”

The numbers and data in the AMT report is based on the totals actually reported by companies participating in the United States Manufacturing Technology Orders (USMTO) program. The information is compiled by the trade association that represents the production and distribution of manufacturing technology, and provides regional and national U.S. orders data of domestic and imported machine tools and related equipment.

The Association for Manufacturing Technology represents and promotes U.S.-based manufacturing technology and its members — those who design, build, sell and service evolving technology in the manufacturing sector.

Analysis of manufacturing technology orders provides a reliable leading economic indicator as manufacturing industries invest in capital metalworking equipment to increase capacity and improve productivity, AMT said.

It’s one of those classic “good news, bad news” situations at Rheem’s Fort Smith plant. Two productions lines will end at the plant by the summer, reducing employment by as much as 150. But the company says the plant will be the “primary production site” for large commercial air conditioning units.

Changes expected this summer are part of a companywide three-year production plan set in motion in June 2011 that have resulted in several rounds of employment changes at the company’s Fort Smith manufacturing plant.

Several sources recently told The City Wire that two lines were being moved out of the plant, with job losses estimated between 100 and 150. The sources also said the changes would push salaried and hourly employment at the plant below 1,000, and possibly below 800. In June 2011 the plant had around 300 salaried and 1,100 hourly jobs.

Lindsey Ford, a senior public relations specialist with Rheem, said Thursday in an e-mail note that business at “Rheem’s Fort Smith plant, and throughout Rheem, is going well.” She said production in Fort Smith is shifting to commercial HVAC (heating, ventilation, air conditioning) equipment.

“Most importantly, the Fort Smith plant is strategically positioned within Rheem to serve as our primary production site for commercial HVAC equipment. With its central location, Fort Smith provides convenient access to prime commercial markets. We are presently making capital investments at the facility to prepare for future commercial product launches. We are very excited about the great work taking place at this plant and we remain committed to growing in Fort Smith,” Ford noted.

Focusing on commercial HVAC means a residential production line “temporarily” transferred to Fort Smith in August 2014 will close at the end of July. Also, gas furnace production in Fort Smith is being moved to a Rheem plant in Nuevo Laredo, Mexico.

“We have been progressively phasing out gas furnace production in Fort Smith over the last four years. We expect to complete this transition by late summer,” Ford wrote. “We anticipate some staffing adjustments after we fully retire these products. However, we have not determined the total impact at this time.”

The manufacturing sector in 2014 ended eight consecutive years of declines in annual average employment in the Fort Smith metro. Annual average jobs in the region were 27,900 in 2005, falling to 17,500 in 2013 before rising to an average 18,100 in 2014.

Fort Smith metro manufacturing jobs were an estimated 18,100 in March, better than the 17,900 in March 2014, but down almost 35% compared to 10 years ago when March 2005 sector employment stood at 27,700. Based on recent revisions by the U.S. Bureau of Labor Statistics, manufacturing employment in the Fort Smith metro peaked at 31,200 in June 1999.

Winston’s Pipe & Cigar Emporium, a family-owned cigar lounge and retail shop, has opened in Fort Smith at 5304 Rogers Ave.

Selections offered by Winston’s include Rocky Patel, Padron, Oliva, Ashton, and Arturo Fuente. Their lounge in the 1,580-square-foot store includes leather seating, humidified lockers and large HDTVs for customers. The store features cigars, pipes, tobacco, ashtrays, cutters, humidors, lighters and leather goods. The staff can also suggest and mix blends for clients from a wide variety of pipe tobaccos.

“With our convenient location in the center of Fort Smith, and with one of the largest cigar and pipe selections available in the region, our goal is to become the premium destination for smoke enthusiasts,” said partner Sammy Fiori.

Other partners in the business are David Bushkuhl, Sam Fiori and Sam Trisler. The business employs six. The business owners invested more than $250,000 to open the store.

Walmart.com has unveiled a signup link for consumers wanting to try to the subscription-based delivery service the retailer plans to test this summer. Follow the link, enter your email and zip code information and then wait for an invitation from Walmart.com.

The retail giant said last week its unlimited delivery service will cost $50 annually and guarantee the home delivery for more than 1 million general merchandise items within up to three days.

Ravi Jariwala, corporate spokesman for Walmart.com, said this test comes as a result of consumer demand as the retail seeks to give its customers another option for their online orders. He said this beta test will be by invitation only.

Wal-Mart’s delivery policy includes free shipping for most orders valued at more than $50. It is also provides for in-store pickup at more than 4,000 U.S. locations at no extra charge.

This new subscription-based delivery service dubbed "Tahoe" is similar on the surface to competitor Amazon’s Prime service which cost $99 annually. Retail experts said the two services are quite different, at least at this early juncture for Walmart.com.

Prime guarantees delivery within two days. It’s Prime Now for residents in New York City can get free delivery in just two hours. Prime also provides free video streaming for its subscribers and is a launching board for other services such as Prime Dash, which is an automatic shipping program and Prime Fresh which covers grocery in select markets for annual subscription upcharge of $299.

Jariwala said for now the Walmart.com service does not provide any additional services beyond the unlimited delivery for online order.

Improved comp store sales and a 17% increase in global e-commerce sales were just about the only highlights of the first quarter earnings report from Wal-Mart Stores. First fiscal quarter net income and total revenue were down was down 6.7% and 0.1%, respectively, from the same quarter of 2014.

Earnings per share for the fiscal first quarter ended April 30 was $1.03, down from $1.11 in the first quarter of 2014 and one cent below the consensus $1.04 per share among the 26 analysts who follow the retailer’s financial performance. The company said currency exchange rate issues reduced earnings by 3 cents per share.

Total revenue in the quarter was $114.826 billion, down from $114.96 billion in the 2014 first quarter and below the consensus estimate of $116.32 billion.

Prior to the earnings report, Wal-Mart revised downward its first quarter earnings per share forecast to between 95 cents and $1.10. The retailer noted in the previous earnings statement that its decision to invest $1 billion annually in pay raises and for its U.S. store employees and additional investments in e-commerce would trim earnings by as much 26 cents to 29 cents per share.

In the earnings report issued early Tuesday (May 19), Wal-Mart said an operating income decline of 8.3% was primarily the result of currency issues and “investments in associate wages & training and e-commerce.”

EARLY ANALYST REACTIONS
Retail analyst Stacey Widlitz, president of SW Retail Advisors, said Wal-Mart has made it pretty clear this year they don’t expect any real sales growth or earnings gains because they are “spending, spending, spending on e-commerce where they have fallen a little behind. And you can’t forget about their wage increases this year.”

She applauded their e-commerce spending saying Wal-Mart has to get out there and ramp up their penetration which is a good bit behind other retailers. But this spending comes at the cost of shorter term earnings. She cautions that if sales don’t roll in for Wal-Mart this year there will be increased pressures on the bottom line profits.

Raymond James & Associates analyst Budd Bugatch sees some upside potential in the retailer. He said without the currency fluctuations and Wal-Mart investments in e-commerce and wages the retailer would have met top line and bottom line expectations. On a positive note he said same-store sales growth of 1% and positive traffic are indications that some of the improvements underway are taking root.

He said ongoing challenges in the international business and a disappointment by Sam’s Club add to the complexity of Wal-Mart’s business going forward.

Walmart U.S. same-store, or “comp,” sales were up 1.1% in the quarter compared to a 0.1% decline in the first quarter of 2014. Wal-Mart had forecast U.S. comparable sales growth between 1% and 2% in the first quarter. The same was predicted for Sam’s Club. Comp sales for Sam’s Club in the first quarter were up 0.4% compared to a 0.5% decline in the first quarter of 2014.

WALL STREET REACTION
Wal-Mart Stores CEO Doug McMillon said the first quarter report reflects “solid” gains in improving the business.

“We had a solid first quarter. We took some important strategic steps to strengthen the foundation of our business for the future. We need to continue to get better at consistently running great stores, clubs and e-commerce everywhere we operate ... and we are,” McMillon said in a statement.

Wall Street did not agree with McMillon’s “solid” statement overall as investors turned negative on the big box retailer. Shares traded down more than 4% following Tuesday’s earnings release. Wal-mart shares (NYSE: WMT) were selling at $76.39, down $3.53 in very heavy volume in the morning session. Wal-Mart shares have traded lower in recent weeks. During the past 52 weeks the share price has ranged from a $90.97 high to a $72.61 low.

Charles Holley, chief financial officer for Wal-Mart Stores Inc., estimated that currency issues and the increases in wages and training will cost the company 8 cents per share in the second quarter.

"Based on our views of the global macro-economic environment, and assuming currency exchange rates remain at current levels, we expect second quarter fiscal 2016 earnings per share to range between $1.06 and $1.18. Our second quarter guidance includes the impact of approximately $0.04 per share from our previously announced investments in both U.S. associate wages and training, as well as $0.04 per share from currency," Holley said.

The first quarter report follows a modest full-year report. Total revenue for the fiscal year ended Jan. 31 was $485.651 billion, up 2% compared to the previous year. Earnings per share for the year was $5.07, which beat the consensus estimate of $4.99 per share. Comparable store sales, a closely watched metric with Wal-Mart, also improved. Comp sales in all U.S. stores – including Sam’s Club – were up 0.5% in the fiscal year, better than the 0.4% decline in the previous fiscal year.

GROCERY GAINS
Walmart U.S. returned net sales of $70.245 billion in the quarter, up 3.5% from a year ago. While sales grew, so did expenses which negatively impacted the segment’s operating income. In the quarter, operating income fell 6.8% to $4.639 billion, which also included merchandise losses, most of which were in the fresh food business.

“We were pleased by the operational improvement we saw in fresh. As we mentioned in April, this is a key area of focus, and getting fresh right is critical to the customer experience. We’re taking the right steps towards reducing the time to bring fresh product to our customers, and training associates to ensure the best offering is on the shelf. We still have a lot more to do in this area, but we’re steadily improving,” Walmart U.S. CEO Greg Foran noted in the earnings call.

He said the “urgent agenda items” he laid out last year are still being addressed. Those items range from assortment discipline to pricing and in-stock goals as well as inventory controls.

Leading the way for Walmart U.S. is the Neighborhood Market grocery format which returned positive comps of 7.9% in the quarter.

While general merchandise comps were similar to last quarter, Foran said areas that performed the best were home — indoor and outdoor — led in part by lower opening price points which helped to drive momentum.

He said the health and wellness categories also performed to expectations while the media and electronics categories did not. Foran said in-stock positions for televisions suffered because of the port congestion on the west coast, which he believes is now behind them.

For the second quarter, Foran expects traffic to remain strong supported by sustained low gas prices and the retailer’s efforts to improve customer service in our stores. 

He did caution that a continued decline in food inflation will weigh a little heavier on sales in the current quarter. For the 13-week period ending July 31, the company  expects a comp sales increase of around 1%. Last year, comp sales for the period were flat.

DISAPPOINTMENT AT SAM’S
Rosalind Brewer, CEO of Sam’s Club, didn’t sugar coat her comments regarding the dismal report. 

“Our first quarter results were disappointing, as comp sales missed guidance, and we delivered softer net sales and profit than last year,” Brewer said in her opening remarks on Tuesday.

With fuel, operating income declined 10.9% to $427 million in the quarter. Brewer said the fuel business has experienced significant pricing volatility within the quarter, and as a result, Sam’s fuel business lost $9 million in the quarter.

She said net sales, without fuel, grew 1.2% to $12.4 billion. Comp sales were 0.4%, driven by slightly higher ticket increases offset by lighter traffic. The club’s Plus Cash Rewards Program nipped at the Sam’s gross profit rate which declined 0.15 % compared to last year. On a positive note, membership income rose 7.4%, but overall operating income declined 8.6% to $436 million as the retailer continues to invest in digital capabilities.

“The integration of digital and physical is a key enabler for our growth. E-commerce delivered a double-digit comp this quarter, contributing 0.40% to the segment comp. Growth in traffic, ticket, and conversion was driven by strong double-digit Club Pickup comps,” Brewer said.

CHALLENGES ABROAD
Walmart International is not without its challenges and risks. There is currency exchange volatility to deflationary pressures in the United Kingdom and Japan, and inflation runs higher in China and Brazil.

Walmart International CEO Dave Cheesewright said in the first quarter, net sales grew 3.4% on a constant currency basis, but factoring in currency exchange rates that was not the case.

“The U.S. dollar has remained at historically high levels, leading to a considerable currency impact of $3.3 billion, which led to a 6.6% sales decline on a reported basis. Net sales totaled $30.278 billion in the quarter,” Cheesewright noted in the release.

He said comp sales were favorable across four of five top markets, with the U.K., driven by continued deflation in food and aggressive competition, being the exception. 

“We also had negative comps in Japan, lapping last year’s benefit of accelerated consumer spending ahead of the April 2014 consumption tax hike. We grew comp sales in our remaining markets,” Cheesewright said.

On a positive note, Canada and Mexico performed better and Cheesewright said the new growth strategy in China is off to good start. 

“Part of this growth will come from the planned opening of 33 stores and clubs this year, with expansion focused in the southern regions where we have strong market presence. Additionally, we aim to provide better services and widen our customer reach through greater expansion of our omni-channel platforms, including online and mobile,” Cheesewright said.

Walmart China is focused on improved efficiency, cost reductions and strengthening the overall portfolio of stores. Operating income grew 23.5% in the quarter, due to expense leverage and gross margin improvement from higher sales with the Chinese New Year. 

“We leveraged expenses this quarter in our core business through ‘We Operate for Less’ and ‘We Buy for Less’ initiatives and will continue to pass those savings onto customers,” he added.

FCPACOSTS
Now its fourth year of investigation, Wal-Mart continues to spend money on the Foreign Corruption Protection Act violations the retailer has been accused of in Mexico, China and Brazil and India.

FCPA and compliance-related costs were approximately $33 million in the quarter. This is comprised of $25 million for the ongoing inquiries and investigations, and $8 million for Wal-Mart’s internal global compliance program and organizational enhancements. Last year, FCPA and compliance-related costs were $53 million in the first quarter. 

Since the retailer self-reported the alleged violations it has spent $645 million in legal fees and compliance restructuring costs. While there is no way to tell how long this investigation will continue it’s important to note that if violations are proven there could also be substantial fines to pay as well as criminal prosecution for anyone involved.

Julie Hoff has been selected as the new director of the Eleanor Mann School of Nursing at the University of Arkansas, effective July 1.

She is the director and chair of the Department of Nursing and Health Sciences at Elmhurst College in Illinois. Hoff, who will also hold the George M. and Boyce W. Billingsley Endowed Chair in Nursing, replaces Pegge Bell, who is retiring from the nursing director’s position.

Tom Smith, dean of the College of Education and Health Professions, said Hoff has the background and experience to lead the nursing school as it continues to grow and expand degree offerings, including several degrees offered online through the Global Campus.

“We appreciate the leadership Dr. Bell has provided over the past three years,” Smith said. “The school has added programs in recent years both to increase the number of nurses in the state prepared at the bachelor’s degree level and the number of nurses with advanced degrees who can take leadership and teaching roles in the health-care system.”

Nursing has always been a vitally important role in the health-care system of Arkansas, and that will not change, Smith said.

“Dr. Hoff is a great addition to our nursing program,” he said. “She understands the tremendous impact nurses can have on the health of Arkansans and beyond. We look forward to the leadership, research and academic expertise that she will bring to our team.”

Hoff said many things attracted her to the nursing program at the UA.

“It’s a flagship program and it’s a growing program,” she said. “The need for nursing is great in the state but the role of nursing is changing nationally. I saw this position as a wonderful opportunity for me to make a difference. Given the changes in health care delivery, the role of nursing is at the forefront.”

Hoff has worked in a leadership role for two years at Elmhurst College near Chicago. She previously spent 22 years at the University of Illinois at Chicago, where she taught, conducted cardiovascular clinical research, mentored students, residents, fellows and junior faculty members

Hoff earned a master's degree in nursing and a doctorate in nursing from the University of Illinois at Chicago, where she also completed a post-doctoral fellowship in bio-behavioral science. She received her bachelor’s degree in nursing from Rush University.

Westark Plumbing & Expert Drain Cleaning Services has earned the service industry’s coveted Angie’s List Super Service Award, reflecting an exemplary year of service provided to members of the local services marketplace and consumer review site in 2014.
 
"This is the second year in a row that our team has earned this award. We want to thank our customers for referring us to their friends and family. Trust is earned and we appreciate the business and support,” Westark Plumbing President Michelle Cernak said in a statement. “As a small local business, we promise to always do the right thing.  This reputation allows our team to give back to our community.”

According to Angie’s List, only about 5% of plumbing and drain companies in the Fort Smith area received the Super Service Award.

Angie’s List Super Service Award 2014 winners have met strict eligibility requirements, which include an “A” rating in overall grade, recent grade, and review period grade; the company must be in good standing with Angie’s List, pass a background check and abide by Angie’s List operational guidelines.

Service company ratings are updated daily on Angie’s List. Companies are graded on an A through F scale in areas ranging from price to professionalism to punctuality.

Van Buren-based USA Truck has named Mike Barnes, Darrell Bloodworth, Steven Cazee, Joseph DeMuth, Joseph Ghoshen, Mark Johnston, Tom Miller, Ken Petti, Robert Williams and Jodie Yoder to its driving team for the 2015 Arkansas Truck Driving Championship, which will take place June 11-13 in Rogers.

Driving team members earned their spots during the 2015 USA Truck Driving Championship on May 15 in Van Buren. Team members earned the opportunity to compete by being collision-free and employed with USA Truck for at least one year. 

Competitors were scored on three components: written exam, vehicle inspection and driving skills course. Yoder compiled the highest cumulative score — along with the top vehicle inspection score — to earn USA Truck Grand Champion honors. He was also USA Truck Grand Champion and third overall at the state level in 2012. Yoder, a military veteran and a Haubstadt, Ind., resident, has been with USA Truck since October 2008.

Cazee (second overall) had the best score on the driving skills course and Miller (fourth overall and 2014 USA Truck Company Driver of the Year) turned in the highest written exam score. Williams, the 2014 USA Truck Grand Champion and 2014 Arkansas Grand Champion Runner-Up, returns to Rogers to defend his state title in the Sleeper classification. He placed second out of 111 competitors overall and topped the 33 entrants in the Sleeper classification in 2014.

“This event has become more prominent within our company each year, and rightly so,” said Jeff Lester, executive vice president, risk management and safety for USA Truck. “Our driving championship is a great way for our driver team members to showcase their skills and test themselves in competition. It’s also an opportunity for us to honor them for their good work, professionalism and dedication to safety. We look forward to competing and excelling at the state level.”
 

When regional transmission organization (RTO) Midcontinent Independent System Operator literally turns on the power switch to its state-of-the-art command center in West Little Rock on June 1, Arkansas will be at the epicenter of the nation’s ongoing and often raucous debate on the safety and reliability of the nation’s energy grid system.

Along with Southwest Power Pool’s $62 million relatively new campus with its own real-time data and operations center about 3.4 miles from the MISO headquarters, both nonprofit grid operators now staff a specially-trained group of engineers that oversee the smooth flow of nearly one-third of the nation’s power generation across all or parts of at least 23 states and Canada.

Once fully operational, MISO’s 50,000-square-foot Little Rock campus will control the organization’s (RTO) South region, which includes 18,000 miles of transmission, 50,000 megawatts (MW) of general capacity, and 30,000 MW of load into the MISO southern footprint across parts of Arkansas, Louisiana, Mississippi, Texas and the city of New Orleans.

The company’s initial 42 employees are primarily experts in engineering and technology, adding to the growing number of science, technology, engineering and mathematics (STEM) jobs at high-tech companies throughout Arkansas.

“We hope to use our presence here not only as a resource to the greater Little Rock community, but as a magnet for other energy-sector firms,” MISO President & CEO John Bear said at the grid operator’s grand opening on March 24.

As one of the largest RTOs overseeing power grid operations across North America, MISO manages a 15-state region stretching from the Gulf of Mexico to Manitoba, Canada. MISO’s $22 million Little Rock operations center will also work in tandem with a similar facility in Carmel, Ind., MISO’s corporate headquarters outside of Indianapolis, and a third facility in Eagan, Minn., near Minneapolis. Employees at all three MISO locations work together in real-time operations, market operations, customer services, government and regulatory affairs, information technology and administrative support, officials said.

FORMIDABLE FACILITIES
During a recent tour of MISO’s space-age looking command center, Todd Hillman, MISO’s vice president of South Region Operations, proudly chaperoned visitors through the grid operator’s facility located just off Kanis and Bowman Roads in West Little Rock. On this particular day, engineers were testing computers and other hardware connected to a giant “live map” covering one large wall, displaying every power plant and distribution line where MISO operates.

Notwithstanding the impressive engineering epicenter, the other facilities and operations at MISO’s Little Rock location are just as notable. They include a train-sized backup power generator, a solar-paneled outdoor car garage, open-space workstations with “Jetsons”-like computers and phone systems, National Security Agency-level security and sports-inspired meeting rooms named after the Arkansas Razorbacks and other SEC schools.

Among his many hats as ambassador for MISO’s South Region, Hillman said his main job is consistent with the grid operator’s mission of providing safe low-cost and reliable energy to consumers across MISO’s massive geographical territory. And although there have been many questions about the reliability of the system in the news, Hillman said during the tour of the command center that utilities, regulators and grid operators are always working to improve the efficiency of the nation’s energy system, often through innovation, upgrades and “smart grid” technology developed after major events like Hurricane Sandy or Midwestern tornadoes that temporarily take thousands of electric consumers offline.

“The grid has always been reliable,” Hillman said quietly when questioned about Hurricane Sandy in 2012 and the Northeast blackout of 2011.

He argues with ready available statistics that, although problems will occasionally occur in the nation’s grid that are caused by weather or human error, the U.S. still has the most expensive, sophisticated and reliable system in the world when compared to other countries.

PREDICTING CONGESTION

In addition, Hillman said technology that now allows MISO and other grid operators to see the energy grid in real time also allows engineers to now immediately correct energy overload and congestions problems they see each day. The command center in Little Rock and other MISO locations also allow the grid operator to run scenarios to help predict and alleviate congestion and other issues that may cause future blackouts and power surges.

“The thing MISO brings to the table is tools that have far-reaching [capabilities],” he said. “We can see the over-arching picture from a reliability standpoint. At MISO, we are able to run 9,000 contingencies every 90 seconds – it just blows your mind the amount of analysis.”

He added: “There are actual facts that show that MISO being in the South in one year has made the [grid] system more reliable.”

Hillman, like other grid operators and industry watchers, describes grid operators as the “air-traffic controllers” of the nation’s complex and often-maligned energy grid, ensuring the delivery of reliable least-cost energy to wholesale energy customers.

In his office after a tour of the still-new-smelling MISO headquarters, Hillman talked passionately about the Little Rock center that was literally hewn out of the famous rock that gave the city its name. Outside his office window sits one of those impressive car-size boulders that Hillman said will help keep him grounded about the mission of grid operators in Arkansas and the other states he oversees.

‘FRIENDLY’ RIVALRY
But MISO’s decision to move to Little Rock is largely related to its current rivalry with SPP that both grid operators call “friendly.” After first exiting its system agreement in 2005, Entergy Arkansas evaluated a number of alternatives before considering whether to continue its independent arrangement with SPP or deciding to join another RTO like MISO, which had no Southern roots at the time.

During that period, SPP made the argument before the Arkansas Public Service Commission (PSC) that it was in a better position to serve Entergy Arkansas and its Arkansas ratepayers.

“If Entergy joins SPP as a full member, two large adjacent power grids will be consolidated, Entergy will have a voice in SPP’s decision-making process, it will continue contributing to our regional energy reserves, and the APSC will have real and meaningful influence through SPP’s Regional State Committee,” SPP President and CEO Nick Brown said during that process.

Finally in November 2011, after months of often contentious public discussion, cost-analysis studies and regulatory hearings, Entergy Arkansas officially filed a “change of control” request to join MISO.

“Our proposal for Entergy Arkansas to join MISO is monumental for our customers,” Hugh McDonald, president and CEO of Entergy Arkansas, said at the time. “It provides the answer to a commitment we made to customers in 2005 to terminate Entergy Arkansas’ participation in a contract that simply created too much uncertainty and litigation risk for our customers and company.”

As part of the decision to allow Entergy Arkansas to join with the Midwest grid operator, the PSC issued a 112-page order that dictated specific steps Entergy Arkansas had to take before the deal was complete. Those mandates included giving special recognition to other electric companies in Arkansas, such as SWEPCO and the Arkansas Electric Cooperatives Corp.

The PSC edict also required Entergy Arkansas to maintain operational independence from its parent company, Entergy Corp., and sister operating companies in Louisiana, Mississippi and Texas.

In late 2013, Entergy Corp. completed the integration of its transmission system into MISO following more than two years of planning and preparation with the New Orleans-based parent of Entergy Arkansas and numerous other stakeholders.

‘VERY GOOD TRANSITION’
Today, both Entergy Arkansas’ McDonald and MISO’s Bear say the integration process went smoothly, and the initial projections of more than $1 billion in savings to Entergy utility customers over the next decade is ahead of schedule.

“It has been a great decision,” McDonald said in a recent interview. “The estimates of customer savings that we had over the entire Entergy [system] was like $1.4 billion over the first 10 years, and our [Entergy Arkansas’] share of that was about $263 million for that same period. And after being with MISO for a year now – we are on track.”

In looking back on the entire process that took years to complete, McDonald termed the cooperative deal with MISO a rousing success. “We joined at 11 p.m., Dec. 18, 2013,” McDonald said. “Things went very smoothly without a hitch, and it’s been a very good transition. The MISO team has done a great job in helping us, and our customers are benefitting from that in the form of lower energy and fuel costs.”

MISO’s Indiana-based chief executive said much the same before the grand opening of the grid operator’s Little Rock operations. “Everything went as well as it could have gone,” Bear said. “The best news for me is that I have met with every [stakeholder] and every person has said they have met or exceeded the benefits that they projected.”

LOOKING TO THE FUTURE
Despite the long and often contentious bid with MISO for the right to oversee Entergy’s vast energy portfolio, Southwest Power Pool has rebounded nicely from the disappointing news with the state’s largest utility that would have expanded the Arkansas grid operator’s Southern footprint substantially.

Still, the board of the Little Rock-based RTO approved more than $1.7 billion in new projects in early 2012 that will span over the period of 10 years. Part of the plan included about $251 million in new transmission projects over five years and another $1.5 billion in targeted transmission upgrades over 10 years.

SPP also successfully implemented its Integrated Marketplace process in March 2014, becoming the first RTO to design, build and deliver a FERC-mandated marketplace program that will improve grid reliability and improve the regional balancing of energy supply and demand.

“The Integrated Marketplace program is the latest and most complex incremental step in SPP’s evolutionary approach to improving our service to members and the region,” SPP President & CEO Nick Brown said a year ago.

Founded in 1941, SPP’s footprint includes 48,930 miles of transmission lines and 370,000 square miles of service territory. The Little Rock grid operator has 76 members in Arkansas, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Mexico, Oklahoma and Texas that serve more than 15 million energy customers.

And despite their obvious differences, including a FERC-refereed disagreement over how compensation and energy flow issues in areas where the two grid operators’ Southern boundaries cross, MISO and SPP representatives often run in the same local circles, appear at the same events and support the same causes.

In fact, both RTOs have recently released white paper and public reports saying that President Obama’s Clean Power Plan could cost its members billions of dollars to comply with the EPA’s proposed rules to shutter most of the nation’s coal-fired energy generation plants.

The two nonprofit grid operators also speak the same acronym-laced language that often leaves journalist and industry outsiders trying to interpret the meaning of commonly used alphabetic phrases like RTO, EPA, SPP, MISO, FERC, PSC and ADEQ.

Likewise, both grid operators are leaders in bringing attention to the need for adding STEM-related jobs to the Arkansas economy, boasting annual salaries for their respective employees that are well above $80,000 a year.

“Little Rock can become a major center for science, engineering and technology jobs which will mean a bright future for the city and enhance Little Rock’s reputation as an energy capital,” MISO’s Bear said at the grid operator’s Little Rock grand opening.

And as the RTO with Arkansas roots going back more than 65 years, SPP’s 575-person workforce at its nearly new 200,000-square-foot headquarters in West Little Rock is already one of the most tech-savvy workplaces in Arkansas. There, at its four-story office headquarters with a 36,000-square-foot operations data center, the nonprofit RTO monitors the power grid for such utility giants and energy powerhouses as Conoco Phillips, Kansas City Power & Light and the Tennessee Valley Authority.

COMMUNITY RELATIONS
Both grid operators are also strong corporate denizens, actively supporting their employees’ involvement in nonprofit and charitable activities in Central Arkansas. For example, when an F-4 tornado nearly destroyed the suburban communities of Mayflower and Vilonia in late April 2014 and left 16 people dead, SPP employees donated time and money to each other and their neighbors who were affected by the disaster, company spokesman Tom Kleckner said.

“Our staff volunteers with – or contributes to – more than 70 nonprofits and charities,” Kleckner said. “They participate in blood drives, charity runs, cook-offs, and as mentors to area students.”

The SPP spokesman noted that the grid operator also “once again” led the Little Rock area’s Summer Cereal Drive, contributing more than 28,000 boxes of cereal to the Arkansas Foodbank and accounting for 13% of the drive’s total. The Little Rock RTO’s charity golf tournament also raised $13,000 for CareLink, which reaches more than 18,000 people a year in Central Arkansas through Meals on Wheels, home care, senior fitness and wellness programs, and helping family caregivers, he said.

Although MISO is still not yet fully staffed, Hillman and Bear said during a tour of the facility that the grid operator began establishing community and charitable roots in Little Rock starting in 2013 when the decision was first made to establish a Southern presence in the city.

Hillman, an Indiana native, said the regional grid operator has already contributed to the community in ways beyond the operation of the electric grid and salaries to employees. For example, MISO’s employee base is already actively involved with the Make-A-Wish Mid-South Arkansas office, and Hillman serves on the board of directors of Make-A-Wish Mid-South, which serves Arkansas, West Tennessee and North Mississippi.

During the tour of the facility at the grand opening, company officials proudly showed artwork featured in the main entrance of the facility that was created by a local artist with the assistance of Make-A-Wish children.

In addition, Katherine Prewitt, MISO’s senior director of South Region Operations, serves on various boards like the Women’s Foundation of Arkansas, the Arkansas STEM Coalition and the Arkansas School for Mathematics, Sciences and the Arts.

Hillman said MISO is also developing relationships with the University of Arkansas engineering departments and other similar programs across the state to collaborate on future industry research projects and to potentially recruit new employees in the future.

Members of a newly formed non-profit group are confident they will reach their goal to revitalize the downtown and historic area of Van Buren with the help of community support, funding and awareness.

Van Buren Original, named after the original platte used to form the historic districts, is comprised of eight community leaders focused on nurturing and sustaining the heritage and history of the Van Buren area.

Revitalizing the downtown district, and surrounding ones including Fairview Cemetery, Drennan-Scott House, the Riverfront, Broadway Street, and East Main Street, is important for the health of the overall community, said Rusty Myers, former assistant executive director of the Western Arkansas Planning and Development District and a VBO organizer.

“The downtown area is integral to the history of our community. We are underutilizing the potential and now have an opportunity to create and restore a part of our history and culture,” said Myers.

The group’s five-year focus is to promote and develop strategic commercial and residential activity, and cultivate dynamic events and entertainment scenes that provide engaging experiences for visitors, shoppers and area residents. The focus was determined by Myers and the other VBO organizers: Fred Williams, Jackie Krutsch, Lisa Huckelbury, Mayor Bob Freeman, Maryl Koeth, Debbie Foliart and Jim Williamson.

‘UNIQUE SETTING’
Myers said the Van Buren area is ripe for revitalizing, given its unique architecture, history and location.

“Our city is located near an interstate. We have less vehicle traffic on our Main Street than most cities making it ideal for pedestrian traffic, and we have the train service that brings people into our city,” he said.

The train service is operated by Arkansas & Missouri Train and runs two routes three days a week: one to and from Springdale and the other to Winslow and back. The Springdale route deposits tourists to the downtown area each morning then returns for riders once the Winslow run is complete.

“Our downtown district is a very unique setting with more than 70 historic buildings located within a six block area, and most of those are still in good shape. Very few towns have these assets, and we need to take advantage and showcase them,” he said.

Koeth, executive director of Van Buren Advertising and Promotion Commission, said she expects the Van Buren downtown revitalization to be a slow, long-term process but she fully believes it will happen.

“It will take a lot of hard work to revitalize the downtown district area,” she said. “It will not be quick. The revitalization will need to be constantly evolving to stay current with the needs of current generations. But, it is an exciting time. I know we can do it.”

BUSINESS INPUT
According to Krutsch, executive director of Van Buren Chamber of Commerce, the group is working on a strategic plan, based on short-term and long-term goals.

“We will be asking some of our larger businesses and organizations such as our hospital what is important to them in the downtown footprint. We know from preliminary conversations with some of these businesses that they want inviting restaurants and shops to help them attract talent to their companies,” she said.

By recruiting unique shops, events and restaurants and restoring the historic value, the group members said Van Buren will attract more visitors to the downtown area and offer a better experience for those who ride the train from Springdale to Van Buren. Myers said more needs to be done to entertain riders who depart the train in Van Buren and are in the downtown district for several hours each day while waiting for their return trip. He calls that ‘captive audience’ an untapped resource for gaining ‘word-of-mouth’ publicity for Van Buren.

“Having a more vibrant downtown area can help recruit residents, work force and businesses,” said Koeth. “More and more communities are recognizing the need to rebuild downtown areas and make them a cornerstone for activities, tourism and shopping.”

DOWNTOWN DECLINE
The decline of downtowns across the country is centered around the change in economic development, said Myers. Downtown areas had a totally different look 30 to 40 years ago. Mass retailers were not as common so small businesses were relied upon for services and goods. As more mass chains moved in and other shopping options became available, many downtowns have steadily declined.

That is true for Van Buren as well. Further decline followed when the recession hit in the early 2000’s. Tourism declined, leaving fewer visitors to the historic areas of Van Buren. As a result, the downtown area continued to decline at a greater rate and has steadily done so since.

“The downtown belongs to the community and reflects upon the community. We want it to be a source of pride. It just needs a little polish right now.”

BENTONVILLEEXAMPLE
When forming plans for Van Buren Original, Myers and other members toured the Northwest Arkansas area. Of particular interest was the Bentonville downtown revitalization. Developers of that renewal effort explained the catalyst for the project was when corporations in the area stepped in because they were having trouble obtaining highly skilled workers who wanted to move to the area. A revitalized downtown with shops, restaurants and activities is a huge draw for potential employees.

“Quality of place is what people and businesses need and want,” said Myers.

He explained that quality of place determines if a person wants to live or visit a particular area, based on what is offered by the community. By improving quality of place, the area is automatically a stronger attraction for more skilled workforces and a wider variety of events and businesses.

Myers was told at one point in the past, seven out of 10 potential employees of major corporations in the Northwest Arkansas area turned down jobs because of the lack of desire to live in an area with no cultural activities or revitalized areas. Revitalizing downtowns and other areas had positive results for residents, small businesses and major corporations. The success of the Northwest Arkansas projects leads VBO members to believe the same can happen in Van Buren.

The VBO group customized their plan to meet the needs of the community and downtown district, including preserving and marketing the area’s history, creating outdoor recreation and events, and recruiting unique businesses. Future plans of the Van Buren Original are to visit community groups to raise awareness and gather ideas. They also will reach out to community stakeholders, investors and business leaders who have an interest in contributing ideas and aid for the cause.

“After awareness, some of the next steps will be developing our strategic goals, defining the area we are calling the downtown footprint, developing a budget and hiring staff,” said Krutsch. “It’s an honor to serve with such a talented and strong board. I am looking forward to all that we can accomplish.”

The group hopes when their goals are accomplished, the image of the historic district and the community will be elevated, making it a more attractive place to visit and live.

Fayetteville-based Startup Junkie Consulting is asking for support to be moved on to the next step for a $100,000 grant from Chase’s Mission Main Street program.

The local small business catalyst and startup mentoring firm has applied for a $100,000 grant from Chase’s, Mission Main Street program that would allow the startup to expand the free mentoring, counseling and support mission for small businesses in the region.

Cofounder Phyl Amerine said local residents can help by voting online before June 19 at the Mission Main Street website.

The guidelines require Startup Junkie Consulting to submit a questionnaire outlining a business plan that will result in growth of the business and receive at least 250 votes to be eligible for a grant.

“Based on a review this past year’s metrics, this grant would allow for a substantial increase in our ability to reach many more veteran, women and minority owned business as well as minority investors and mentors,” said cofounder Jeff Amerine.

Through Mission Main Street Grants, Chase will award $2 million to 20 small business across America. All businesses that apply for a grant and meet the eligibility requirements will receive access to a small business webcast by Premier Sponsor, LinkedIn. The 20 grant recipients will be announced in September 2015.

From chicken processors to pork packers the fallout of the recent Avian Influenza outbreak is a concern and worth examining, according to Derrell Peel, Oklahoma State University Extension Livestock Marketing Specialist.

The U.S. Department of Agriculture’s APHIS (Animal and Plant Health Inspection Service) reports that the toll is nearly 34 million birds depopulated since the outbreak earlier this year. The majority of these are laying hens, followed by turkeys, with relatively few broilers, Peel noted. As a result, the biggest and most immediate impact for consumers is in egg markets, especially in the north central part of the country. The reduced supply of table eggs as well as breaking eggs used in food service will impact consumers directly and indirectly, Peel said.

Tyson Foods CEO Donnie Smith recently told media during the company’s earnings call that every time another case of bird flu is detected the clock is restarted with regards to export resumption. He said with 40 or more countries banning all poultry exports there is a risk of dark meat saturation in the U.S. market. 

He said the risks to Tyson Foods are small given the company’s buy-versus-grow plan that allows it buy the pieces it needs to fill customer orders which is primarily breast and wings. This ensures there is not leg-quarters stacking up in the freezer while exports are shut off.

Pure play commodity chicken processors could have extra leg-quarters piling up unless they are able to market them in the U.S.

Peel agreed with Smith that the impact on poultry meat supply is minimal and likely to remain so. He said the depopulation total of 33.8 million birds is 0.38% of the 2014 poultry slaughter of 8.9 billion birds. While the turkey segment was hit harder by avian influenza, Peel said the depopulation to date represents about 3% of the U.S. turkey slaughter planned for this year.

“Both broiler and turkey production are still expected to surpass year ago totals unless the outbreak expands significantly,” Peel said.

He said domestic consumption is more likely to be affected from the direct loss of birds in the poultry segment. Peel also cites the export bans as the biggest risk to the meat markets overall. In 2014, 8.2 billion pounds of poultry were exported from the U.S., which is 18.2% of the 45 billion pounds of total poultry production. He said broiler and turkey exports, already struggling in 2015, are forecast to decrease even more in 2015 as result of the outbreak. 

“Broiler exports are expected to be down roughly 9%, though the situation is very dynamic and the impact could get larger or smaller depending on what happens in the coming weeks,” Peel said.

When the chicken is not sent abroad that means product is stacking up in the U.S and that can result in downward price pressure amid retail promotions to move the product. Wholesale Georgia Dock pricing of leg-quarters are already trading lower at 49 cents a pound. A year ago they were bringing 55 cents a pound.

Peel expects domestic broiler consumption to rise 6.5% this year. He said pork production also is expected to expand this year as much as 6.7% over last year. 

The laws of supply and demand could mean the added meat on the market will come a little cheaper for consumers given that pork often competes with chicken, particularly in the summer grilling season.

Beef production is expected to decline between 1% to 2% from 2014 and beef prices are likely to remain high. 

Peel also said total meat consumption of U.S. consumers will increase 4.2% from a year ago because of the added supply of poultry and pork.

Five Arkansas companies received the 2015 Governor’s Award for Excellence in Global Trade during an awards luncheon held today at the Governor’s Mansion. The award honors companies for their leadership in exporting goods and services throughout the world.
 
This year’s winners are:
• Georg Fischer Harvel LLC (Little Rock) – Large Manufacturer Exporter
• Knesek Guns Inc. (Van Buren) – Medium Service Provider
• Galley Support Innovations Inc. (Sherwood) – Small Manufacturer
• Jobco Inc. (Fort Smith) – Small Service Provider
• Collective Bias Inc. (Bentonville) – Rising Star

“Our businesses must compete in the global market if our state is to reach its economic potential,” said Gov. Asa Hutchinson. “The Governor’s Award for Excellence in Global Trade recognizes those businesses that are forging the way and finding success. They are great examples of how businesses must continue to evolve in the 21st century.”

This is the sixth year for the program which is co-sponsored by the Arkansas District Export Council, Arkansas Economic Development Commission, U. S. Commercial Service, and the Arkansas World Trade Center.

Judging criteria was based on factors such as most recent percentage of export sales to total sales, growth of export sales over the past three years, the company's goals and commitments internationally and the number of jobs saved or created due to the company's export performance if applicable.
 
According to Census Bureau data, Arkansas’s export shipments of merchandise in 2014 totaled $6.9 billion. There were 2,242 Arkansas companies exporting goods from Arkansas in 2014. Arkansas’s largest trade partners in 2014 were Canada ($1.4 billion), Mexico ($738 million), France ($440 million), and China ($437 million).
 
The Arkansas District Export Council is composed of business leaders appointed by the U.S. Secretary of Commerce. District Export Councils contribute leadership and international trade expertise to complement the U.S. Commercial Service's export promotion efforts through counseling businesses on the exporting process and conducting trade education and community outreach.
 
THE WINNERS
Georg Fischer Harvel LLC is a producer of plastic pipe and fittings used for the transportation of water, gases and aggressive media. Five years ago, Georg Fisher Harvel LLC found the local market highly saturated and worked to expand into the international market. To date, 20 percent of their gross revenue is derived from international sales. They have focused on emergent international markets in which an increase in local and foreign investment is leading an increase in infrastructure improvements. They are currently exporting to more than 50 countries. The innovative approach to expanding their market and the dedication to developing international relationships to ensure their supply lines remain open and active are why Georg Fischer Harvel LLC was selected as this year’s Large Manufacturer Exporter.
 
Knesek Guns Inc. (KGI) saw an international need for advanced firearms and equipment and has grown to meet that need. Based out of Van Buren, Arkansas, this company exports to 76 international markets. They first envisioned international expansion after attending the IWA trade show in Germany. Through discussions in Germany with potential customers they saw that there was an international need for specialized firearms, modified to meet individual country regulations that no other American company was filling. They took this idea and have worked with foreign governments and defense companies to expand their global reach. KGI has also expanded into several offshoot businesses to enhance their manufacturing enterprise. The way that KGI stepped up to meet a global need and the focus of the business on export markets is why Knesek Guns Inc. is this year’s Medium Service Provider.
 
Galley Support Innovations (GSI) based out of Sherwood, Arkansas, designs and manufactures interior hardware for planes, trains, yachts and more. They work with customers to custom design hardware for their transportation systems. While GSI focuses primarily on planes at this time, they are reaching out to international markets in rail, marine, and automotive industries as well. Currently more than 20 percent of their annual sales is derived from their exporting business. They are exporting to eight foreign markets currently and have started working directly with end users overseas to increase this market share. GSI’s willingness to change and expand to meet the diverse international demand is why they are this year’s Small Manufacturer Exporter.
 
Jobco Incorporated started in 1981 as a wholesale distributor for manufacturing companies within the Fort Smith area. Over the last 30 years, they have expanded their reach and now serve as a wholesale distributor for international markets. They have embraced technology and utilized a web based sales approach to market to internationally based companies. They have retained these customers and increased their exporting markets by providing custom products to countries that are unable to locally produce products to meet their manufacturing needs. Through their web-based approach, they have doubled their international sales in the last year and hope to further increase their reach in the year to come. This focus on customer satisfaction and embracing technology is why Jobco Inc. is this year’s Small Service Provider. 
 
Collective Bias, based in Rogers, Arkansas, uses the power of storytelling to influence market demand and branding for companies around the world. They focus on utilizing social influencers to tell their stories about different brands and products and their experiences using these products. In this way companies can use real life examples to shape their image and to encourage new markets. People in general are engaged in the act of reading about other people’s impressions of different products as they are mentioned in the process of storytelling, in this way potential customers do not even realize they are being influenced to look for those products the while they are shopping. These authentic stories are shared across social media platforms, thus expanding the reach of the story. Collective Bias took this idea global. They have worked with major companies to increase markets for lessor utilized products. They have found social influencers who were using these products in new and exciting ways and started Twitter campaigns to highlight the reach of these ideas. This creative and innovative approach is allowing Collective Bias to influence shopping decisions worldwide, while increasing Arkansas based jobs. This is why Collective Bias is this year’s Arkansas Rising Star.

There was no disagreement Tuesday (May 19) on adopting new rules for food trucks in the city, but members of the Fort Smith Board of Directors were not in complete agreement over a change in how the city manages its budget, and hiring associated with the city’s federally-mandated program to improve the sewer system.

Wally Bailey, director of development for the city of Fort Smith, said the proposed mobile food truck ordinance is a result of several months of city staff and the Fort Smith Planning Commission studying ordinances of other cities and meeting with those who own food trucks.

The new rules would allow mobile food trucks in the downtown Fort Smith area, which is zoned C-6, and in “moderate” use industrial areas zoned I-2. Key features of the new ordinance include:
• Downtown parallel parking spaces for mobile foods trucks would be available from 9 p.m. to 2 a.m. to capture after hours customers after restaurants close;
• Exemption of non-profit events if operating at a site less than five consecutive days;
• Mobile trucks must be at least 300 feet from a public or private school;
• Permits would be issued annually instead of just for 120 days, with the annual permit also allowing for multiple locations; and
• Insurance with higher coverage levels for mobile food trucks operating in a public right of way.

Bailey said in November he plans to return to the Board with a six-month analysis of progress on implementing the new rules. Prior to the Board vote, Bailey also said the Planning Commission unanimously recommended the Board approve the new ordinance.

Director Tracy Pennartz said the new rules should have a “positive impact” with events and festivals in the city. She also thanked Bailey for planning to return to the Board with a 6-month update. Director Kevin Settle said he hears much support for new food truck rules, but was disappointed that Arkansas law does not allow food trucks on Garrison Avenue – a state highway – in downtown Fort Smith. Settle suggested to other Board members that they work with the city’s legislative delegation to see if a change in state law is possible.

With no other discussion, the Board approved the ordinance by a 6-0 vote. Director George Catsavis did not attend Tuesday’s meeting.

Bailey said the work begins to put the new rules in place.

“Now we just get into the implementation phase and hopefully it will be what everyone expects it will be,” Bailey told The City Wire after the Board approved the ordinance.

He said updating the mobile food truck ordinance was a goal set in the Fort Smith Comprehensive Plan approved in 2014 by the Board.

FINANCIAL POLICIES
Several members of the Fort Smith Board have during the past few months battled Fort Smith Mayor Sandy Sanders and city staff over the city’s budgeting method. Some of the Board members prefer a “structural” method they say presents a real world financial picture. The city now uses a “cyclical” method that factors in fund balances from previous years.

City Finance Director Kara Bushkuhl has noted in a memo to the Board that advantages of a cyclical budget include familiarity, conservative revenue estimates, multi-year perspective provides better future financial planning, spending for actual needs, and avoids negative changes in service levels because of changes in available funding. Her note did say a disadvantage of this budgeting is the possibility of “spending above current year revenues.”

Sanders said Tuesday night he has a “significant problem with changing from our current form of budgeting.” He said the existing budget method is “long-standing and (a) very effective budgeting process.” He rejected concerns that existing budgeting process does not provide flexibility and does not allow the board to see real status of funding levels. Sanders said the Board should consider some changes to how the city budgets, but he was not supportive of “a wholesale change.”

However, the Board voted 4-2 for changing the budget format, with Directors André Good and Don Hutchings against the plan. In moving to the next item on the agenda, Sanders said: “Thank you. We may be discussing this again.”

SEWER SYSTEM SUPPORT
As part of an estimated $480 million in federally mandated sewer system improvements between now and 2026, the Board was asked Tuesday to approve the funding for hiring 28 people to improve the city’s “Capacity, Management, Operations and Maintenance” (CMOM) programs. The 28 new jobs would be realized in 2015, and are part of a plan to hire 75 new people by fiscal year 2017.

Speaking to Utilities Director Steve Parke, Director Settle reiterated his opposition to hiring people to comply with the federal order.

“I just don’t have confidence, Steve, that this is the way we should be going,” Settle said, adding that if the city was in the private sector “we’d be going out of business.”

Settle also questioned what happens when Parke retires and his successor has a different opinion about how to comply with the federal order.

Director Hutchings and Mike Lorenz disagreed with Settle, saying that hiring more people may not be popular but it is required to meet the federal order. Lorenz said the vote to fund the 28 new positions doesn’t mean that all 75 positions will be filled, but it is the best thing to do to “fix the problems that we’ve got.”

Only Settle voted against the primary ordinance funding the new positions.

Wal-Mart Stores said it is expanding its veterans hiring promise to provide 250,000 jobs to qualified veterans by 2020. The retailer says it has hired more than 92,000 veterans since the Veterans Welcome Home Commitment was launched two years ago on Memorial Day.

The original plan was to hire 100,000 over five years but given its success Wal-Mart is now expanding its promise by one and a half times. The retailer said another 8,000 veterans have been promoted in the past two years as well.

“We’ve experienced a tremendous response to the Veterans Welcome Home Commitment in our first two years, and as more service members transition out of active duty, we know we can do more,” said retired Brigadier General Gary Profit, Walmart’s senior director of military programs. “We believe veterans represent the largest, diverse, talent-rich pool in the world and are an essential segment of the next generation at Walmart.”

The Office of the Chairman of the Joint Chiefs of Staff estimates 250,000 service members may separate from the military each year over the next five years.

“Walmart’s Veterans Welcome Home Commitment assures our nation's veterans that there is an opportunity available for them through a much needed short-term job or the start of a long-term career,” said James Schmeling, co-founder of the Institute for Veterans and Military Families and managing director for programming. “Walmart, Sam’s Club and the Walmart Foundation have been strong partners, supporting IVMF’s work building impactful programs, including for veteran and family business ownership, through the educational institutions and communities where veterans and families are preparing for important transitions in their lives."

On May 5, Wal-Mart Stores participated in the launch of the Coalition for Veteran Owned Business, which will work to create opportunities for veteran and military-family owned businesses with American businesses and supply chains. The retailer invites military and veteran-owned businesses to apply for its annual U.S. Manufacturing Summit and Open Call to be held July 7-8 in Bentonville.

The summit and open call will provide an opportunity to meet with Walmart’s buyers and facilitate meetings for current and potential suppliers with key state economic development officials.

In addition to hiring veterans, Wal-Mart and its foundation have also committed $20 million of additional funding to assisting veterans and their families though 2019. This commitment was extended from the $20 million promised in 2011.

Consumers likely spent 40% of savings from lower gasoline prices on necessities such as groceries and rent, according to a new research from Bankrate.com, a publisher, aggregator and distributor of personal finance content on the Internet.

Necessities were the leading answer among all age, education and income groups.

U.S. pump prices have fallen for a year or longer. And, in spite of recent increases to a U.S. average of $2.70, consumers are still paying a dollar less than a year ago, according to the U.S. Department of Energy.

“In a testament to tight household budgets, more Americans spent the savings from lower gasoline prices on necessities than anything else,” Greg McBride, chief financial analyst for Bankrate.com, said in the report.

The number of Americans spending any savings realized from lower gasoline prices rather than splurging on discretionary spending is no surprise to University of Arkansas economist Kathy Deck, director of the Center for Business and Economic Research.

“It’s not terribly surprising,” Deck said. “That 60 percent did not spend their savings on necessities is more surprising.”

That could be a signal that many Americans are paying down credit card debt or some other debt or saving more, she said.

The survey found that 23% of Americans saved (19%) or invested (4%) the extra savings. Millennials were more likely to have saved (26%) or invested (6%) the money than any other age group.

One thing seems to be that the savings is not flowing into the retail sales sector, Deck said.

“Retail sales growth is quite soft,” she added. “It’s surprising (the gasoline savings) hasn’t flowed into retail sales.”

Deck has said Arkansas’ improving employment and income situation, along with lower gasoline prices at the pump have given consumers a boost in perceived current conditions and near-term expectations. A semi-annual survey by Arvest Bank in March reflected Deck’s assertion, showing less total dollar spending on gasoline, while deposits in consumers’ checking and savings accounts generally have risen

Just 14% of respondents in the Bankrate survey reported spending their gas savings on dining out or a vacation. Millennials (young adults ages 20-30) were most likely to have spent on non-essential items while senior citizens were the least likely.

Not much of a surprise to Deck. noting the purchasing power of millennials lis a topic of much discussion among economists.

Millennials are the most indebted age group, Deck said.

“I wouldn’t read too much into that,” she added.

Other findings in the report, released Monday, show:
• 27% of Americans feel less comfortable  with their savings while 22% fell more comfortable with savings;
• 11% of Americans feel less secure in their jobs than a year ago;
• Americans reporting higher net worth than one year ago outnumber those reporting lower net worth by more than 2 to 1 (29% to 14%); and
• 16% of Americans say their overall financial situation has deteriorated over the past year. This is just half of what was seen  when the poll began in 2010 and down drastically from a high of 35% recorded in 2011.

There were also demographic differences in how gas savings were spent.
• Half of women surveyed said they used money saved from low gas prices to pay for necessities, compared with 31% of men.

• The higher the income, the more likely it was that the money went to savings. People who earned the highest incomes were twice as likely as those who earned the lowest incomes to say they saved the money.

• Among parents, 49% said they spent it on necessities, compared with 37% of non-parents.

• Democrats were almost twice as likely as Republicans to spend their extra dollars on meals out or taking a vacation.

• The survey was conducted by Princeton Survey Research Associates International in telephone interviews with a national representative sample of 1,000 adults living in the continental U.S.

The savings could continue throughout the summer as some experts predict pump prices will remain low through the summer months. In Arkansas, motorists are paying an average of $2.44 per gallon, according to the AAA’s daily fuel guage.  Prices range from a low of $2.35 in Northwest Arkansas metropolitan area to a high o $2.49 around Texarkana and the state line. In Fort Smith, motorists are paying about $2.44 a gallon on average.