ShopKo sales, profit down slightly
May 23, 2003-- Home Textiles Today,
Green Bay, WI — Hit by falling sales and a $900,000 after-tax charge stemming from the way it now accounts for vendor allowances, ShopKo Stores recorded a first-quarter loss of $1.1 million , recovering from a year-ago loss of $185.6 million when it piled-on non-cash accounting charges stemming from its earlier acquisition of Pamida Stores.
Pulling out all the one-time items to create a clearer picture , operating profits fell by 34.3 percent, to $9.1 million from $13.9 million, hurt by lower sales and higher costs, which offset stronger margins and improvement in the Pamida business.
Overall ShopKo sales fell by 2.9 percent, to $707.9 million from $728.8 million last year in a notably weak retail environment. Same-store sales declined by 2.7 percent.
Hardest hit was the core ShopKo business, where overall sales and same-store sales both fell by 4.0 percent, to $530.5 million from $552.5 million last year, detracting from a turnaround in the smaller Pamida segment. Pamida sales inched ahead by 0.6 percent, to $177.4 million from $176.3 million, while same-store sales improved by 1.3 percent.
Operating profits in the ShopKo segment tumbled by 36.9 percent, to $15.8 million from $25.1 million. Pamida, meanwhile, slashed its losses in half, by 49.9 percent, to $1.4 million from $2.7 million, largely on the strength of substantial margin expansion. Average gross margin at Pamida Stores improved by 230 basis points, or 2.3 percentage points, to 26.1 percent from 23.8 percent a year ago. Ironically, margins were somewhat stronger at Pamida, 26.1 percent, than at the larger ShopKo business, 25.7 percent.