Jennifer posts 1Q net loss
By Furniture Today Staff -- Furniture Today, January 16, 2005
Woodbury, N.Y. — Sofa-Sleeper specialist Jennifer Convertibles reported a net loss of $2.5 million in its first quarter ended Nov. 28, coupled with a revenue drop of 6.1%.
Revenues came to $31.7 million, compared with $33.7 million a year ago. The figures include sales of $29.6 million in the 2004 quarter and $31.5 million in the 2003 period, plus service contract revenues of $2 million in the latest quarter and $2.2 million in the comparable period last year.
The net loss in the latest quarter was $700,000 more than the $1.7 million loss in the same period last year.
While sales were off 5.9% in the 2004 quarter, the company also held the line on operating costs, with the cost of goods sold decreasing to $22.8 million in the latest quarter, measured against $23.7 million in the 2003 quarter.
Selling, general and administrative expenses also declined in the most recent quarter to $10.7 million from $11.3 million in the year-earlier period.
During the quarter, Jennifer closed four stores and opened one. Revenues from the discontinued stores amounted to $261,000 in the 2004 quarter and $274,000 in the comparable 2003 quarter. The company posted a net loss from discontinued operations of $177,000 in the latest quarter for the closed stores, compared with net income of $84,000 in the 2003 quarter.
CEO Harley Greenfield said, "Although we are not pleased with the results achieved during this quarter, we believe, as I had indicated when we reported our results for the fiscal year, that our new supply chain is now in place. We expect to begin to see its benefits in written sales towards the end of our second fiscal quarter.
"The furniture industry has experienced a significant change in source of supply, from Europe and the United States to China, which has resulted in a reduction in unit prices for customers, which impacts revenues. We believe we have several merchandising and marketing initiatives now in place which will provide incredible values for customers yet increase unit sales per customer at acceptable margins."
Jennifer Convertibles is the owner and licensor of 199 Jennifer Convertible stores and 16 Jennifer Leather stores. As of Nov. 27, the company owned 138 stores and licensed 77.
| Jennifer Convertibles | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 11/28 | 2004 | 2003 | Change |
| (a) Includes service contract revenues of $2 million in the 2004 quarter and $2.2 million in the 2003 quarter. (b) Includes a $177,000 net loss from discontinued operations. (c) Includes $84,000 in net income from discontinued operations. | |||
| Revenues (a) | $31,660,000 | $33,724,000 | (6.1%) |
| Operating income | (1,856,000) | (1,322,000) | — |
| Net income | (b)(2,465,000) | (c)(1,691,000) | — |
| Earnings per share | (0.43) | (0.30) | — |
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Jennifer posts 1Q net loss
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