Jennifer posts net loss in 1Q
By Clint Engel -- Furniture Today, January 29, 2007
Woodbury, N.Y. — Specialty retailer Jennifer Convertibles posted a fiscal first quarter net loss of $637,000, noting that it finally felt the effects of industry-wide sales weakness.
The loss for the period ended Nov. 25 compared with a gain of $848,000 for the same period the year before, which included a $195,000 gain from early termination of a store lease.
Revenues from continuing operations for the Woodbury, N.Y.-based Top 100 company decreased 8.5% to $32.7 million, and same-store sales dropped 9%.
"The softness that has been experienced for some time in the retail furniture industry finally impacted our results," said Harley Greenfield, Jennifer CEO. The company noticed the weakening demand at the end of its fourth quarter and made changes, including adjustments to margins, merchandising and advertising, to counter.
Jennifer believes "these changes will return the company to profitability in the near future, even if the softness in the industry continues," Greenfield said.
Operating margins from continuing operations decreased to 29.9% of revenues from 32.4% for the first quarter a year ago. Selling, general and administrative expenses increased to 31.5% from 29.9%.
On the bright side, Greenfield said the retailer's cash and investments increased to more than $15.5 million and customer deposits were up by nearly $3.5 million. Jennifer's first Ashley Furniture HomeStore is expected to open in Carle Place, N.Y., in April, and it's evaluating locations for two more.
"We believe, based on our analysis of stores in similar metropolitan areas, that these stores will add substantial growth to our solid Jennifer base. We expect each store to generate between $15 million and $20 million in revenues with solid profits," Greenfield said.
The sofa-sleeper specialty retailer has 171 Jennifer Convertibles and 16 Jennifer Leather stores, including 24 licensed stores.
| Jennifer Convertibles | |||
|---|---|---|---|
| Earnings per share are fully diluted, and all figures in parentheses are losses or declines. | |||
| 1. Includes income from discontinued operations of $134,000 or 2 cents per share in the 2005 quarter. 2. Based on average shares of 6.8 million in the 2006 quarter and 7.5 million in the 2005 quarter. | |||
| 13 weeks ended 11/25 | 2006 | 2005 | Change |
| Revenues | $32,699,000 | $35,742,000 | (8.5%) |
| Operating income | (533,000) | 879,000 | — |
| Net income | (637,000) | 848,0001 | — |
| Earnings per share2 | (0.09) | 0.11 | — |
