LNT looks to Q4
October 20, 2004-- Home Textiles Today,
CLIFTON, N.J. — Putting a soft third quarter behind it, Linens 'n Things today said it is working to boost both store traffic and average transaction in the fourth quarter.
Reallocating space for some new and expanding businesses was among the initiatives executives pointed to during a conference call with analysts this morning. LNT has shifted space at roughly 250 of its 479 stores to accommodate larger presentations of furniture, area rugs and home environment products, according to Jack Moore, president and chief operating officer."Overall, the reallocation of space represents the most comprehensive change in some time," he added.LNT is looking for that and other shifts to galvanize the business. With sales stalled by slower traffic, hurricanes in the South and a soft back-to-school season, and earnings under pressure from a change in how the retailer accounts for vendor allowances, third-quarter profits tumbled 17.9 percent, to $17.2 million from $21 million last year.Skewing the profit picture for the superstore retailer was a $2.3 million non-cash charge stemming from its vendor allowance accounting. Excluding the effect of the non-cash accounting charge, earnings declined at a more moderate pace of 6.7 percent, to $19.6 million.The one-time accounting charge underlines the increasingly important contribution that vendor allowances make to a retailer's bottom line, bringing in about $2.3 million during the third quarter, down considerably from $4.1 million during the second quarter.Overall sales at Linens 'n Things improved 8.5 percent, to $654.2 million from $602.8 million last year, the growth fueled by continued rapid expansion. But the crucial gauge of same-store sales edged down 0.5 percent.
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