FBI sales drop 9.2% in third quarter
Company plans to close about 20 of the stores it owns
By Furniture Today Staff -- Furniture Today, November 1, 2007
ST. LOUIS — Furniture Brands International, the No. 2 furniture producer and importer, said third-quarter sales fell 9.2% and the company incurred a net loss of $13.7 million.
Meanwhile, the company said it will take a fourth-quarter charge of 18 to 22 cents per share to close an undisclosed number of company-owned stores.
In a conference call with analysts this morning, Ralph Scozzafava, vice chairman and CEO-designate, declined to specify which stores had met the company’s financial and strategic criteria to be closed. However, he indicated that the number would be somewhere around half of the 44 stores FBI now owns.
About 20 of the company-owned stores are Lane and Broyhill units, and based on the direction laid out at a Furniture Brands investor conference last week, it’s likely that many of the closings will be in that group.
The company also owns some of its Thomasville and Drexel Heritage stores, but Scozzafava said today that FBI is more likely to keep those stores open, even if they are weak on the financial metrics, to maintain distribution in certain metro areas.
“The one-time charges resulting from these closings are investments, in our view, in our profitability for 2008 and beyond,” he said.
Furniture Brands blamed the third-quarter net loss largely on a series of one-time restructuring and asset impairment charges. The company said it would have eked out a profit of $807,000 without the special charges.
Sales for the quarter ended Sept. 30 totaled $516.3 million, compared with $568.9 million in the third quarter of 2006.
The most recent quarterly loss, which equaled 28 cents per share, compared with net earnings of $5.8 million, or 12 cents per share, in last year’s third quarter.
“Our financial results for the third quarter were as expected, as the home furnishings industry continues to show the effects of cautious consumer spending,” said Mickey Holliman, chairman and CEO.
The company also said it sold its corporate airplane in the quarter for a $9 million cash benefit, a move that added $3 million to pretax earnings.
Sales for the first nine months of the year totaled $1.63 billion, an 11.3% drop from the $1.83 billion in sales in the first nine months of 2006.
The nine-month net loss came to $4.97 million, or 10 cents share. In the comparable period last year, Furniture Brands had net income of $53 million, or $1.08 per share.
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FBI sales decline 9.2% in 3Q
Nov 4, 2007
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