Tuesday Morning wakes to profit jump
Furniture Today Staff -- Furniture Today, July 26, 2004
Helped by stronger sales, wider margins and a deep cut in interest expense, second-quarter profits shot up 59.1 percent — more than three times as fast as sales — at Tuesday Morning Corp.
Profits at the close-out retailer of upscale home accessories and gifts soared to $10 million from $6.3 million during the same period a year ago.
Aided by continued expansion and strong same-store sales, overall sales jumped 18.8 percent, to $210.7 million from $177.4 million a year ago. The crucial gauge of same-store sales rose 6.6 percent during the quarter, and 4.4 percent for the first six months of the year.
"Our 6.6 comparable-store sales gain for the second quarter marks the tenth consecutive quarter of comp-store gains and the 11th consecutive quarter of double-digit earnings gains," said Kathleen Mason, president and CEO.
Driving the bottom-line growth, in addition to stronger sales, the close-out retailer improved its average gross margin 140 basis points, or 1.4 percentage points, to 36.3 percent from 34.9 percent a year ago, more than offsetting modestly higher costs. Operating costs rose 40 basis points, or four-tenths of a percentage point, to 28.4 percent of sales from 28 percent.
In a big lift to the bottom line, interest costs were slashed 79.5 percent, to $472,000 from $2.2 million last year, generating a cash savings of $1.8 million and accounting for almost half of the earnings gain. In another big savings, the retailer reduced its miscellaneous expenses during the second quarter to $263,000 from $2 million.
Tuesday Morning Corp.
|Qtr. 6/30 (x000)||2004||2003||% chg|
|Oper. income (EBIT)||16,553||12,258||35.0|
|Per share (diluted)||0.24||0.15||60.0|
|Average gross margin||36.3%||34.9%||--|
|6 months||2004||2003||% chg|
|Oper. income (EBIT)||30,034||24,315||23.5|
|Per share (diluted)||0.44||0.30||46.7|
|Average gross margin||37.5%||36.4%||--|
|a-Second-quarter results include miscellaneous income of $206,000, down 13 percent from $237,000 last year; and miscellaneous expenses of $263,000, down 87 percent from $2.0 million during the same period a year ago.|
|b-Six-month results include miscellaneous income of $447,000, down 2 percent form a year ago; and miscellaneous expenses of $429,000, down 90 percent from $4.2 million the preceding year.|
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