Tuesday Morning posts strong Q3, turns focus to core home categories
Home & Textiles Today Staff -- Home Textiles Today, May 9, 2014
Dallas – Coming off the third quarter when it commenced the final phase of its turnaround efforts to improve and refine its business, Tuesday Morning Corporation laid out plans to focus its merchandise mix on its core home categories at the expense of other lagging segments.
As Micheal Rouleau, ceo, explained, the 811-unit closeout chain spent Q3 busy with “the sell-off of exited categories, further reduction of our clearance merchandise and enhancements to our store layouts.”
With those efforts in progress, Tuesday Morning is turning its full attention going forward on its healthier home décor, textiles, rugs, furniture, and other home businesses while actively shedding its “non-core categories” – specifically women’s apparel and footwear, which the company expects to fully exit by late August, noted Rouleau during the retailer’s earnings call Thursday evening.
For the third quarter, ended March 31, Tuesday Morning improved its net loss to $8.4 million, or $0.20 per share, compared to a net loss of $12.4 million, or $0.29 per share, in the year-ago third quarter. Excluding the business turnaround charges, net loss on a non-GAAP basis was $5.7 million, or $0.13 per share, versus a net loss of $4.8 million, or $0.11 per share.
The company also reported a 2.6% increase in net sales to $182.8 million versus the prior year period’s $178.1 million, and a 6.4% comp gain aided by an 8.4% increase in customer transactions but hindered by a 1.9% decrease in average ticket. The company noted Q3 comparable sales in ongoing core categories – not including the women’s apparel and footwear -- increased 10.5%.
Year-to-date net loss improved to $2.8 million, or $0.06 per share, compared to a net loss of $40.8 million, or $0.97 per share last year. The company noted these results were impacted by the effects of the non-recurring items related to its business turnaround initiatives in the prior period and an increase in deferred tax asset valuation allowance in the current year-to-date period. On a non-GAAP basis, Tuesday Morning reported a 19.6% decline in net income to $3.7 million, or $0.09 per share, from $4.6 million, or $0.11 per share, for the same period last year.
Net sales for the nine-month period were up 2.5% to $652.2 million over $636.2 million in the prior year, and comps increased 5.7% -- comprised of a 9.4% boost in customer transactions but offset by a 3.4% decrease in average ticket. For ongoing core categories, Tuesday Morning noted comparable sales increased 10.4%.
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