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Burlington 2Q profits on the rise

Calendar shift helps boost results

Don Hogsett -- Home Textiles Today, January 22, 2001

BURLINGTON, NJ -Building sales by more than 20 percent and at the same time slashing costs and interest expense, Burlington Coat Factory Warehouse, parent of Luxury Linens, drove second-quarter profits up by 61.5 percent, to $47.5 million from $29.4 million last year.

Sales in the period ended Dec. 2, including the start to the all-important Christmas season, jumped up by 20.3 percent, to $735.3 million from $610.9 million last year, as the retailer boosted the top line by almost $125 million. The crucial gauge of same-store sales rose by 5.1 percent.

Leveraging the big increase in sales, the retailer whittled down its overhead by 210 basis points, to 27.4 percent from 29.5 percent the prior year. And in a big cash savings after working down its debt earlier during the year, Burlington slashed its interest expense by 56.9 percent, to $553,000 from $1.3 million last year, generating a savings of $731,000.

In a further prop to the bottom line, the retailer boosted its margins by 60 basis points, to 38.8 percent from 38.2 percent the previous year. Gross margin dollars improved by 22.3 percent to $285.3 million from $233.2 million.

With sales and margins both growing and costs coming down, operating profits shot up by 51.4 percent, to $89.3 million from $59.0 million.

But this quarter's good news could mean a weaker Christmas season, the company pointed out. Coming off last year's 53-week retail calendar, this year's second fiscal quarter began and ended one week later than last year's comparable period, which had the effect of pulling a week's worth of holiday sales out of the traditional Christmas season, "which may cause weaker results for that period on a comparative and/or absolute basis," according to the company.

Underlining the calendar shift, the company noted that while sales in the quarter rose by 20.3 percent, the increase is substantially smaller when measured on a comparable-weeks basis, with sales rising by 14.3 percent.

BURLINGTON COAT FACTORY WAREHOUSE CORP.


Qtr. 12/2 (x000) 2000 1999 %CHG

Sales

$735,262

$610,942

20.3

Oper. income (EBIT)

89,307

58,992

51.4

Net income

47,510

29,427

61.5

Per share (diluted)

1.07

0.64

67.2

Average gross margin

38.8%

38.2%

-

SG & A expenses

27.4%

29.5%

-

SIX MONTHS

2000

1999

%CHG

Sales

1,150,933

988,731

16.4

Oper. income (EBIT)

79,638

55,352

43.9

Net income

33,159a

19,393a

71.0

Per share (diluted)

0.75

0.42

78.6

Average gross margin

37.2%

37.2%

-

SG & A expenses

31.3%

32.5%

-


a-Earnings in the six-month period include a one-time loss of $815,000 from the early retirement of debt. Prior-year results include a one-time loss of $1.4 million stemming form a change in accounting.

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