Tuesday Morning sees new day in 4Q
Furniture Today Staff -- Furniture Today, August 23, 2010
Dallas - Tuesday Morning closed its fourth quarter and fiscal 2010 with "solid improvements," including its third consecutive quarter of positive comp sales increases, a turnaround in its net income and strong sales results for both periods.
The 852-unit closeout retailer reported net income for the quarter ended June 30 of $1.3 million, or 3 cents per share, compared to a net loss of $1.6 million, or a $0.04 loss per share, for the same period last year.
Sales rose 6.4% increased to $200.8 million. Comparable store sales rose 6.0%, comprised of a 5.7% increase in traffic and a 0.3% increase in average ticket.
Gross profit increased $17.9 million, or 6.0%, to $314.0 million for fiscal 2010 compared to gross profit last year of $296.1 million, primarily as a result of higher sales volume. As a percentage of net sales, gross profit increased to 37.9% for fiscal 2010 compared to 36.9% in fiscal 2009. This increase of 1.0% in gross profit percentage was primarily due to decreases in markdowns resulting from tighter inventory control as well as decreases in product cost, shrink and improved leverage of distribution costs.
"This top-line improvement driven by a steady increase in traffic demonstrates that our customers continue to be attracted to our value proposition," explained Kathleen Mason, president and ceo. "Our balance sheet has remained strong as we have effectively controlled expenses and managed inventories resulting in higher cash balances. At June 30, 2010, our cash balance was $23.5 million compared to $5.8 million at the same time last year with no outstanding debt year over year."
For the full fiscal year, sales were up 3.3% to $828.3 million, and comp sales increased 2.2%. The increase in comparable store sales was generated by a 3.4% increase in traffic offset by a 1.2% decrease in average ticket. Earnings per share were 25 cents versus $0.00 last year.
While the fourth quarter and fiscal 2010 results were encouraging, Tuesday Morning is cautious about the new fiscal year.
"Although the economy is uncertain, we are confident and well positioned as we move into our fiscal 2011 year," Mason said. "We expect the retail environment to continue to be economically uncertain during fiscal 2011. As a result, we have considered such challenges in our forecasts for our fiscal year 2011."
The company's guidance for fiscal 2011 includes: net sales to range between $870 million and $880 million; comps in the low single digits; earnings per share between 39 cents and 43 cents; and capital expenditures $17 million.
The company also expects to open 18 new stores in the new fiscal year for a new total of 870 units by yearend.
"We plan to continue to relocate, expand and close stores during fiscal 2011 in a manner and quantity consistent with prior years," Mason said. "The relocated stores have historically shown double digit improvement in sales as well as better profit margins."
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