Cost Plus hurt by internal costs
March 16, 2006-- Home Textiles Today,
Oakland, Calif. -- Hurt by weakening same-store sales, thinning margins and soaring interest costs, fourth quarter profits at Cost Plus Inc. slid by 8.3%, to $21.5 million from $23.5 million last year.
Helped by new store openings, sales at the diversified low-price chain rose by 7.0%, to $367 million from $363 million last year. But same-store sales slipped by 2.1%, weakening further from a 1.3% decline during the same period a year ago.
Taking a bite out of the bottom line, average gross margin contracted to 34.0% from 35.1% the prior year. At the same time, operating costs climbed slightly higher. Putting further pressure on profits, interest expense jumped to $1.3 million from $726,000 last year.
Even as sales climbed higher, inventories remained stable at $253 million, whittled down by one-tenth of a percentage point.