Bombay loss widens as sales decline 2.8%
By Furniture Today Staff -- Furniture Today, June 5, 2006
Fort Worth, Texas — The Bombay Company said sales were down 2.8% in its first quarter ended April 29, and the specialty retailer reported a larger loss than it did in the same period a year earlier.
"The overall environment for specialty home furnishings remains challenging," said Chairman and CEO James Carreker, who will be leaving the chain soon. "We saw a significant decline in traffic and business after Easter that adversely affected results."
Bombay reported a net loss of $15.6 million on sales of $118.7 million in the latest quarter. Same-store sales were down 1.2% from a year ago.
In a conference call with the investment community, Bombay officials said large furniture items accounted for a greater share of sales in the quarter, but that overall margins were down due to increased promoting. May business was off to a soft start, the officials said.
The net loss in the 2005 first quarter was $8 million. In that period, Bombay recorded an income tax benefit of $5.5 million, but the amount in the most recent quarter was just $404,000, because the company doesn't expect to receive any benefit related to its U.S. operations.
Bombay said it opened four stores in the quarter and closed 20, ending the period with 482 units, compared with 495 at the end of 2005's first quarter. Square footage, however, has declined only 0.5% as the company has migrated to larger, off-mall stores in the past 12 months.
In the current quarter, the company expects to open three stores and close 10 to 14. It's looking for a year-end store count of 460 to 465.
"We continue to control expenses, investing in areas to drive business to remain competitive," Carreker said. "We are testing national television broadcasts on select cable networks during May and early June. We are tightly controlling our inventory levels and carefully managing liquidity and markdown levels in order to maintain flexibility. We enter the second quarter with an improved inventory content compared to last year and what we believe to be an improved assortment."
During the conference call, Bombay Director Nigel Travis said the company probably is two to three weeks away from naming a new CEO to replace the outgoing Carreker.
| The Bombay Company | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| Quarter ended 4/29 | 2006 | 2005 | Change |
| (a) Includes income tax benefit of $404,000 in the 2006 quarter and $5.5 million in the 2005 quarter. | |||
| Revenues | $118,664,000 | $122,111,000 | (2.8%) |
| Operating income | (15,750,000) | (13,148,000) | — |
| Net income (a) | (15,553,000) | (7,969,000) | — |
| Earnings per share | (0.43) | (0.22) | — |
