Retail Ventures slashes loss
June 14, 2004-- Home Textiles Today,
Building sales, boosting margins and whittling interest expense; Retail Ventures Inc., parent of Value City Department Stores and Filene's Basement, edged its way towards a turnaround. The company pared its first quarter loss almost 90 percent, to $1.5 million from $13.2 million last year.
Sales at the diversified retailer increased 9.8 percent, to $646.3 million from $588.5 million, largely on the strength of sharply improved same-store sales at its Filene's Basement and DSW Shoe Warehouse operations, up 15.8 percent and 10.6 percent respectively. But same-store sales at Value City Department Stores continued their slide, dipping 4 percent following a 4 percent drop the prior year. Overall same-store sales improved 4.2 percent.
Climbing back on track and building up margins, the value-oriented retailer recorded an operating profit of $4.2 million, swinging back from a deep operating loss of $14.3 million the preceding year.
Supporting the rebound in operating profits, the retailer pushed margins sharply higher, 330 basis points, or 3.3 percentage points, to 40.1 percent from 36.8 percent a year ago. But costs remain a problem, inching up modestly, by 20 basis points, or two-tenths of a percentage point, to 39.5 percent of sales from 39.3 percent the prior year.
Providing a further lift to the bottom line, the retailer pared interest expense 13 percent, to $8.3 million from $9.6 million last year, generating a cash savings of $1.2 million.
The retailer banked $1.6 million in license fees and miscellaneous income, up 3.7 percent from $1.5 million a year ago.
Inventories remained well controlled, rising just 3.6 percent, to $469 million from $452.9 million last year, well beneath the 9.8 percent increase in sales.
Retail Ventures Inc.
|Qtr. 5/1 (x000)||2004||2003||% chg|
|Oper. income EBIT)||4,174||(14,321)||—|
|Per share (diluted)||(0.05)||(0.39)||—|
|Average gross margin||40.1%||36.8%||—|
|a-First-quarter results include $1.6 million in license fees and other income, up 3.7 percent from $1.5 million last year; and an income-tax benefit of $1.1 million, compar3ed with a year-before income-tax benefit of $$9.2 million.|
First quarter segment results
|Value City Department Stores||-1.1%||-4.0%|
|DSW Shoe Warehouse||10.6%||-3.6%|
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