PLEASANTON, Calif. — Blackhawk Network Holdings here, partially owned by Safeway, said Wednesday it expects to add approximately 1.7 million additional gift card displays by late November across its top U.S. distribution partners in advance of the holiday season.
According to Talbott Roche, Blackhawk president, the additional display will enable more "points of interruption" throughout the stores and additional space for new content, including local and regional brands.
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He made his remarks during a conference call to discuss Blackhawk's financial results for the third quarter and 36 weeks ended Sept. 7, which saw earnings fall and revenues rise. Net income for the 12-week quarter fell 23.8% to $2.4 million, which the company said was due primarily to a $2.6 million after-tax non-cash credit adjustment in 2012 following its 2011 acquisition of Cardpool — which allows consumers to exchange gift cards for cash value — compared with a $200,000 after-tax reduction in this year's third quarter; while operating revenues rose 25.1% to $206 million.
The company said revenues included an 18% increase in load value (commissions and fees); a 58% increase in program, interchange, marketing and other fees from U.S. and international card partners; and a 53% increase in product sales, half of which came from Cardpool.
Read more: Safeway's Blackhawk Buys Cardpool
For the year to date net income fell 47.6% to $6.2 million, while operating revenue increased 21.9% to $616.9 million, with commissions and fees up 16.6%; program, interchange, marketing and other fees up 46%; and product sales up 43.4%.
Bill Tauscher, chairman and chief executive officer, said Blackhawk has previously eliminated differential and commission rates that it shared with Safeway to bring them in line with its other distribution partners, which he said would have a $9 million impact for the year.
Safeway is Blackhawk's majority shareholder. Tauscher said he would not answer questions about whether Safeway plans to sell any of its Blackhawk shares, referring those questions to Safeway, which has scheduled an earnings call later in the day.
Read more: Activist Investor Pushes for More Asset Sales at Safeway
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