LNT openings, comps push 4Q higher
February 10, 2003-- Home Textiles Today,
Clifton, NJ — Rolling out new units at a rapid clip, and at the same time building same-store sales, home furnishings big box Linens 'n Things pushed fourth-quarter earnings before one-time items up by 26.0 percent, to $40.2 million.
Sales jumped up by 23.0 percent on the strength of aggressive expansion, to $723.3 million from $587.9 million last year. Same-store sales expanded by 4.0 percent, continuing a rebound from weakness last year, and built on a 1.8 percent increase during the third quarter.
Overall profits rose by almost 400 percent, to $40.2 million from $8.2 million last year, but only because last year's bottom line was weighed down by a $23.7 million after-tax charge to cover restructuring and store closing costs.
The number that Wall Street watches carefully, fully diluted earnings per share before one-time items, rose by 15.4 percent, to $0.90 from $0.78.
For the first quarter, Axelrod forecast overall sales to rise by 10 percent to 13 percent, with same-store sales moving up in the low single digits.
First-quarter earnings are expected in the range of 10 to 12 cents per share, blunted by 3 cents per-share charge the company will take in connection with last week's resignation of president Steve Silverstein.
Firming up the bottom line during the all-important Christmas quarter, LNT widened its average gross margin by 70 basis points, to 41.4 percent form 40.7 percent a year ago. Gross margin dollars increased by 25.0 percent, to $299.3 million from $239.4 million. Operating costs were whittled down slightly, by 10 basis points, to 32.3 percent of sales from 32.4 percent a year ago. In another strong assist to profits, the retailer slashed its interest expense by 61.8 percent, to $408,000 from $1.1 million, generating a cash savings of $660,000.