Jo-Ann Stores reports tough first quarter
March 7, 2006,
Hudson , Ohio -- Hobbled by falling same-store sales, weaker margins and higher costs, and then tripped up by a $27.1 million one-time charge, Jo-Ann Stores recorded a first-quarter loss of $18.0 million, reversing a year-before profit of $32.3 million.
Hampered by stepped-up promotional activity and markdowns, average gross margin thinned substantially, to 41.9% from 45.4% last year. Costs as a percentage of sales rose to 35.8% from 33.3% a year ago.
Chairman, ceo and president Alan Rosskamm said the company is “taking measures to restore gross margins; we expect this improvement to come through tighter purchasing disciplines on fashion and seasonal categories, to reduce end-of-season clearance sales as well as more discreet coupon usage and more disciplined promotional pricing guidelines.”
Rosskamm said a store reset in June will reduce the amount of home décor textiles and finished seasonal goods, while broadening assortments of craft components, reflecting the relative performance of these categories.
Jo-Ann Stores recorded a one-time goodwill impairment charge of $27.1 million reflecting the company's lower market capitalization, declining business trends, softness in the industry and deteriorating performance.
Related Content By Author
The Countdown to the ICON Honors Continues featuring Christophe Pourny