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Jo-Ann Stores Stymied in Q4

Sees Flat Year Ahead

Craft and fabric retailer Jo-Ann Stores lost ground in the fourth quarter, but increased both same-store sales and overall profit for the full fiscal year ended January 31; projections were guarded.

Net income for the year was $21.9 million, or 86 cents per diluted share, convincingly above the prior-year income of $15.4 million, or 62 cents EPS.

Quarterly income of $20.4 million, or 79 cents EPS, was down from $27.5 million, or $1.10 one year ago.

Sales showed a similar pattern, with a 2.4% dip in Q4 $571.9 million, as comps slumped 2.9%. For the full year, net sales of $1.901 billion up 1.2% from 2007, and comps up a slim 0.5%.

Jo-Ann management sees somewhat rougher times ahead, however, and projected a fiscal 2010 (the current year) same-store sales decline of 2% to 4%. Earnings are projected in the range of 70–85 cents EPS.

Still, the 764-unit chain feels the past year's performance has validated its strategies. "The successful execution of our strategic growth initiatives allowed us to deliver same-store sales growth, SG&A expense leverage, and a consistent margin rate, which resulted in increased earnings and strong free cash flow for fiscal year 2009," said Darrell Webb, chairman, president and ceo.

Webb added, "Our core sewing and crafts businesses continued to exhibit growth throughout the year, despite the deterioration in economic conditions."

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