Burlington 3Q profits up 3.9%
Clint Engel -- Furniture Today, April 16, 2001
BURLINGTON, NJ — With margins gaining strength on a lower level of markdown activity, and getting another lift from deep cuts in interest expense, Burlington Coat Factory Inc., parent of Luxury Linens, reported a third-quarter profit of $36.1 million, up 3.9 percent from $34.8 million.
Sales during the all-important holiday period increased by 5.2 percent, to $722.7 million from $686.7 million last year, and would have climbed even higher but for a shift in the calendar, which pushed the start of the Christmas quarter back by a week, costing the company a week of holiday sales. On a comparative, same-week basis for the 13-week quarter, sales actually jumped up at a double-digit pace, rising by 10.2 percent, the company said. Same-store sales in the period increased a solid 3.4 percent.
Burlington Coat is parent to Luxury Linens, the nation's 16th largest home textiles retailer with about $211.8 million in 1999 home textiles sales.
In a boost to the bottom line, average gross margin widened by 120 basis points, to 34.8 percent from 33.6 percent the prior year. Gross margin dollars improved by 9.2 percent, to $471.0 million from $456.2 million last year. The strong improvement, the company said, "was primarily due to a lower level of markdowns compared with the prior year. After a strong sell-through in December, the need for promotional activity after Christmas was less than that of the previous year."
Offsetting the strength in margins, operating costs climbed higher by 130 basis points, rising to 26.4 percent from 25.1 percent a year ago.
In a big seven-figure savings, Burlington slashed its interest expense by 89.3 percent, to just $141,000 from $1.3 million last year, a move that saved the company $1.2 million during the quarter
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