Tues. Morn. up 62% in Q3
October 27, 2003-- Home Textiles Today,
Lifted by a double-digit increase in sales and deep cuts in interest expense, third-quarter profits shot up by almost two-third at Tuesday Morning Corp., a close-out retailer of decorative home accessories, rising by 62.3 percent, to $6.4 million from $3.9 million last year.
Fueled mostly by continued rapid expansion, sales advanced by 12.5 percent, to $173.9 million form $154.6 million a year ago. Same-store sales increased by 2.8 percent.
In a big lift to the bottom line, the retailer slashed its interest expense by 43.3 percent, to $2.4 million from $4.3 million last year, generating a cash savings of $1.9 million.
Average gross margin widened substantially, expanding by 120 basis points, or 1.2 percentage points, to 36.3 percent from 35.1 percent the prior year. Helped by the stronger sales and margins, gross margin dollars rose by 16.3 percent, to $63.2 million from $54.3 million.
But acting as an offset, costs climbed higher as well, and when measured as a percentage of sales rose by 110 basis points, or 1.1 percentage points, to 29.0 percent from 27.9 percent.
Driven by stronger sales and the wider margins, operating profits increased by 13.7 percent, to $12.7 million from $11.2 million.
In another big assist to the bottom line, stockpiles were held in check during the period, rising substantially behind the rate of sales growth. Inventories rose by 7.9 percent, to $209.4 million form $194.2 million last year, trailing the gain in sales of 12.5 percent.
Kathleen Mason, Tuesday Morning ceo, said, "Consistent, predictable performance against our sales growth, profitability and cash flow objectives is what Tuesday Morning provides to its shareholders. Our team has put together eight consecutive quarters of strong double-digit increases in net income, and we are positioned to continue this positive trend into the fourth quarter of 2003. Our inventory is fresh and ready to meet the consumer needs in this all-important selling season. We remain confident that we will achieve our projected annual comparable store sales increase of 2 percent to 4 percent."
Tuesday Morning Corp.
|Qtr. 9/30 (x000)||2003||2002||% change|
|a-Third-quarter results include miscellaneous income of $194,000, compared with miscellaneous costs of $197,000 last year; and interest income of $5,000, compared with $9,000 the preceding year.
b-Nine-month results include miscellaneous income of $650,000, compared with $214,000 during the prior-year period; and interest income of $62,000, compared with $194,000 a year ago.
|Oper. income (EBIT)||12,702||11,167||13.7|
|Per share (diluted)||0.15||0.10||50.0|
|Average gross margin||36.3%||35.1%||—|
|Oper. income (EBIT)||37,018||32,383||14.3|
|Per share (diluted)||0.45||0.32||40.6|
|Average gross margin||36.4%||35.5%||—|
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