Jo-Ann Stores net income takes spotlight in fiscal 2010
Michael J. Knell -- Furniture Today, March 10, 2011
Hudson, Ohio - Despite the impact of raw material price increases, Jo-Ann Stores reported a record fourth quarter and experience "significant growth" over fiscal 2010 when its net income leapt 40% over the prior year.
"Our record fourth quarter was driven by solid execution among our entire organization, which helped drive customers to our stores and delivered improved results despite the impact of unfavorable weather and raw material cost inflation," said Darrell Webb, chairman and ceo, during the 751-unit 48-state fabric and craft chain's earrings call this week.
Fourth quarter net income rose 8.9% to $40.4 million, or $1.53 per diluted share, versus the year-ago period's $37.1 million, or $1.36 per diluted share. These results include expenses of $2.0 million after tax, or $0.07 per share, related to the pending acquisition by an affiliate of Leonard Green & Partners, L.P. announced on December 23, 2010. Excluding these expenses, net income for the fourth quarter of fiscal 2011 was $1.60 per share.
Total net sales for the fourth quarter, which ended January 29, increased 3.6% to $624.1 million from $602.2 million last year. Same-store sales increased 2.0%.
Internet sales through Joann.com increased 29.3% to $15.9 million for the fourth quarter compared to the same period last year.
Small-format store net sales for the quarter increased 4.6% to $277.6 million compared to the same period last year, and same-store sales increased 3.8%.
Large-format store net sales for the quarter increased 1.8% to $330.6 million, and same-store sales increased 0.7% compared with an increase of 3.1% in the fourth quarter last year.
President and coo Travis Smith explained that the chain's large-format units "continue to be affected by weak performance in home-related categories, such as home décor fabrics and home accents along with other higher-priced discretionary categories like custom framing."
Better news stemming from the fourth quarter, he added, was that the company's sewing business represented 49% of the period's selling volume, a 1.8% increase on a same-store-sales basis versus the 6% increase in the prior year.
"We continue to experience positive same store sales in the majority of our fabric and sewing notions product categories," he explained.
The highlight for the full year, fiscal 2011, was Jo-Ann's 40% leap in net income to $93.1 million, or $3.46 per diluted share, compared with $66.6 million, or $2.51 per diluted share, in the prior year. These results include expenses of $2.0 million after tax, or $0.07 per share related to the pending merger. Excluding these expenses, net income for fiscal year 2011 was $3.53 per share.
Net sales for the fiscal year increased 4.4% to $2.079 billion versus $1.991 billion in fiscal 2009. Same-store sales increased 3.5%.
Internet sales through Joann.com for the year increased 17.4% to $44.5 million.
Small-format store net sales grew by 5.4% to $924.4 million, and same-store sales were up 5.6%.
Large-format store net sales rose 3.2% to $1.110 billion, and same-store sales increased 1.9%.
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