Bombay same-store sales plummet 18% in 3rd qtr.
By Clint Engel -- Furniture Today, November 21, 2004
Fort Worth, Texas — Specialty retailer The Bombay Company beat analysts' third-quarter loss projections, but the double-digit same-store sales gains of last year have turned into double-digit declines this year.
The Top 100 chain said last week it would exit the wholesale business by divesting its Bailey Street Trading Co. by the end of the year. The company said it hadn't decided whether to sell or liquidate the business.
Bombay posted a net loss of $7.3 million in its third quarter ended Oct. 30, compared to a loss of $148,000 in the same period a year ago. Revenues fell 6.4% to $126.7 million as same-store sales dropped 18%.
For the nine months, the net loss came to $19.4 million vs. a net loss of $2.2 million last year. Revenues were down 3.2% and same-store sales were off 15%, compared to a 21% increase a year ago.
"Declines in both traffic and average ticket impacted overall results and our ability to leverage fixed costs," said Chairman and CEO Jim Carreker.
The average ticket dropped 3% to $86 as sales of high-dollar items, including bedroom and home office furniture, declined. Higher distribution center and transportation costs as a percentage of revenues, and a 14% increase in retail square footage led to higher expenses on lower sales.
Carreker said Bombay would continue to migrate stores from malls to off-mall locations.
In a conference call with analysts, Executive Vice President of Operations Brian Priddy said same-store sales at off-mall units are running three to four percentage points better than mall stores for the year to date. Off-mall combination Bombay and BombayKIDS stores also are proving successful, he said.
By the end of 2005, Bombay expects to have about 249 off-mall locations, with 234 mall stores and 47 outlets.
Chief Financial Officer Elaine Crowley said Bombay will take a $2 million to $3 million non-cash charge in connection with the divestiture of Bailey Street Trading, which accounted for about $16 million in revenues last year.
Bombay expects fourth-quarter revenues to be in the $210 million to $220 million range, and same-store sales in the negative mid-single-digits to flat range.
Fourth-quarter income from ongoing activities is projected in the $8 million to $12 million range.
| The Bombay Company | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 10/30 | 2004 | 2003 | Change |
| (a) Includes income tax benefits of $3 million in the 2004 quarter, $98,000 in the 2003 quarter, $10.4 million in the 2004 nine months and $1.4 million in the 2003 nine months. (b) Based on average shares outstanding of 35.8 million in the 2004 quarter, 35.1 million in the 2003 quarter, 35.6 million in the 2004 nine months and 34.4 million in the 2003 nine months. |
|||
| Revenues | $126,669,000 | $135,361,000 | (6.4%) |
| Operating income | (9,992,000) | 128,000 | — |
| Net income (a) | (7,286,000) | (148,000) | — |
| Earnings per share (b) | (0.20) | 0.00 | — |
| 9 months ended 10/30 | 2004 | 2003 | Change |
| Revenues | $372,729,000 | $384,871,000 | (3.2%) |
| Operating income | (29,501,000) | (3,381,000) | — |
| Net income (a) | (19,360,000) | (2,189,000) | — |
| Earnings per share (b) | (0.54) | (0.06) | — |
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