Tuesday Morning Narrows Loss in 3Q
May 10, 2010-- Home Textiles Today,
Despite cutting overhead and improving gross profit, Tuesday Morning Corporation today reported a loss for the third quarter. But sales trended up, and cash on hand more than quintupled.
Net loss for the quarter ended March 31 was $4.3 million, or 10 cents per share, compared to a net loss of $6.8 million, or 16 cents per share, for the same period last year.
Sales rose 3.0% to $172.0 million compared. Comps were up 1.6% as a 2.9% increase in traffic was offset by a 1.3% drop in average ticket.
Kathleen Mason, president and ceo, noted that the third quarter was the second consecutive period when comparable store sales were positive.
“Despite severe weather that affected promotional events early in the quarter, traffic and comp sales continued on a positive trend,” she said. “Our customer is shopping more frequently but she is still purchasing smaller baskets.”
She added that the impact on the home furnishings sector from the housing and credit crisis “continues to affect us in certain regions of the country,” mainly Florida, California, Nevada and Arizona.
Even so, “we have been successful in maintaining a strong balance sheet,” Mason continued, having ended the third quarter debt-free compared to $22 million last year. At the end of the quarter, Tuesday Morning had $26.6 million in cash compared to $5.5 million at the same time last year.
“Our credit facility remains available to fund seasonal inventory purchases and to take advantage of opportunistic buys as needed,” she said. “We had approximately $113 million in availability at quarter's end.”
Tuesday Morning's inventory by the end of the third quarter was $258 million compared to $260.6 million a year ago. Average store inventory was slightly below last year when the closeout chain had already significantly lowered its inventory levels “to aptly match customer demand. Markdowns were taken to address aged and slow-moving inventory.”
For the fiscal year to date, earnings per share shot up to 22 cents compared to 4 cents for the same period in fiscal 2009. Sales increased 2.4% to $6113.1 million, while comps rose 1.0%.
This increase in comps was comprised of an increase in traffic of 2.6% offset by decreased of average ticket of 1.6%.
“We are pleased with these results and we are well-positioned as we move into the last quarter of our fiscal year,” said Mason.
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