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Bombay 1Q same-store sales up 25%

Clint Engel -- Furniture Today, May 25, 2003

Fort Worth, Texas — The Bombay Company posted a 25% same-store sales increase and cut losses in its first quarter, citing better inventory availability and marketing.

The company also said it soon would name a new chief executive, one that could lead it to the $1 billion annual sales mark.

Total revenues for the 423-store home furnishings specialty chain grew 31.2% to $119.2 million in the quarter ended May 3. The net loss was trimmed to $1.3 million from $3.4 million a year ago.

Chief Financial Officer Elaine Crowley said all categories had double-digit sales growth, with furniture showing the biggest gains and representing 51% of business in the quarter, up from 48% a year ago.

Bombay saw double-digit same-store sales increases in all U.S. regions and in Canada. Crowley said greater investments in inventory and marketing led to a 17% increase in transactions and an 11% hike in the average ticket.

The chain also better leveraged its occupancy costs and other expenses, resulting in better gross margins, more than offseting lower product margins, the company said.

Bombay expects low double-digit same-store sales gains in the second quarter and a loss of 4 to 6 cents per share, vs. a 10-cent loss per share in the second quarter a year ago.

For the year, it now expects revenues of $585 million to $600 million and earnings per share in the range of 31 to 35 cents, compared to revenues of $494 million and net earnings of 22 cents per share in the previous year.

Bombay plans to open about 60 Bombay stores this year and 30 Bombay Kids units. It will close 41 stores.

Revenues from non-store activity, including Internet and catalog sales and its wholesale operations, grew to 9% in the quarter from 7% a year ago. The company cited strong Internet activity, noting it now has over 250,000 subscribers to its e-mail marketing program and expects to have 500,000 by year's end.

In a conference call with analysts, Chairman Jim Carreker announced the promotion of Steve Farley to executive vice president of marketing and merchandising. He joined the company in June 2002 and was senior vice president of marketing and merchandising.

Carreker also said an announcement on a new CEO should be "forthcoming in the near future." Former President and CEO Carmie Mehrlander left last year. The search became focused on a CEO who would "embrace the things that are occurring right now and take the team to the next level," Carreker said.

Newly elected to Bombay's board are Susan Groenteman, chief investment officer and director of Dallas-based Crow Holdings investment company; and Laurie Shahon, president and founder of New York-based investment firm Wilton Capital Group.

The Bombay Company
Earnings per share are fully diluted, and all figures in parentheses are loses or declines.
Quarter ended 5/3	2003	2002	Change
(a) Includes income tax benefits of $831,000 in the 2003 quarter and $2.2 million in the 2002 quarter.
Revenues	$119,237,000	$90,855,000	31.2%
Operating income	(2,246,000)	(5,774,000)	—
Net income (a)	(1,273,000)	(3,432,000)	—
Earnings per share	(0.04)	(0.10)	—

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