Stanley Furniture sales decline 8% in third quarter
Cecile Corral -- Furniture Today, October 17, 2012
STANLEYTOWN, Va. — Stanley Furniture reported an 8% decline in third quarter sales from the same period a year ago, which the company attributed to decreased sales in its Young America youth furniture line.
The company posted a loss of $1.9 million or 13 cents per share for the quarter ended Sept. 29, compared with a loss of $1.7 million or 12 cents per share a year earlier.
"While retail activity in our segment of the industry was softer than we anticipated, we did see increased sales in our Stanley line," said Glenn Prillaman, president and CEO. "The overall decline in sales for the quarter can be attributed to our Young America line, but this was expected due to the short-term disturbances related to consecutive initial production runs of new product in our factory and the difficulties one would expect at retail when exchanging all floor samples for that new product at a time when consumer traffic is slow.
"However, our Young America backlog grew significantly during the quarter and now stands at the highest level since we consolidated all products into our single factory in Robbinsville," he said.
Stanley previously produced some of the Young America line overseas, but now makes the line in the Robbinsville, N.C., plant.
Prillaman said the company has improved its service on the Stanley furniture line, which he said "had been a factor hindering growth in this part of our business throughout the year." He added that the company had spoken with its dealers at the fall High Point Market, which is now winding down.
"They are increasingly complimentary of the quality enhancements to our product, our new designs and our improved service positions for both product lines, but they reminded us that it does take time to regain the confidence of the retail salesperson even though our work to reposition the product lines is now effectively complete," he said.
For the first nine months of the year, sales of $75.2 million were down 6% from the comparable period in 2011. The company posted net income of $33.4 million or $2.30 per share for the nine months - mainly because of $39.4 million it received from the government, from antidumping duties on Chinese-made bedroom furniture - compared with a net loss of $6.2 million or 43 cents per share a year earlier.
Prillaman said that for the fourth quarter, "given the lack of momentum in our segment of the retail marketplace in recent months, we could see overall sales ranging from flat to slightly down from the same quarter a year ago.
"However, we expect to reduce our Young America backlog to a more normal level during the current quarter, contributing to improved financial results for Young America. Additionally, we are in an excellent service position on the Stanley line should retail activity improve."
Furniture Today's Ray Allegrezza Speaks with Stephen Bogart about Fine Furniture's New Bogart Line