Hancock posts gains in profits, sales
May 21, 2003-- Home Textiles Today,
Tupelo, MS — With sales and margins both climbing higher, first-quarter profits at Hancock Fabrics, a diversified crafts and fabric retailer, climbed by 8.8 percent, to $4.1 million from $3.7 million last year.
Sales advanced by 3.4 percent, to $107.6 million from $104.1 million, somewhat beneath the company's expectations, stymied by weather and the war in Iraq. Same-store sales rose by 4.2 percent, compared with a 7.4 percent increase in the same period a year ago.
Lending strength to the bottom line, average gross margin improved by 40 basis points, or four-tenths of a percentage point, to 50.9 percent from 50.5 percent a year ago. Operating costs were steady at 43.5 percent. Advertising costs rose during the quarter, along with insurance and pension costs. But increases there, the company said, were offset by lower store payroll costs, and fixed expenses were leveraged downward by the increase in same-store sales. A major expense, the retailer said, was the start-up of a new distribution center, and its impact on the company's costs is expected to continue throughout the year.