Furniture Today Staff -- Furniture Today, June 2, 2008
Dillard's Keys on Cost Control
Dillard's projected $204 million in capital expenditures and the opening of just four new stores — but will continue initiatives to upscale segments of its merchandise mix, ceo William Dillard II told shareholders at the 326-store chain's annual meeting. He said the $7.2 billion department store retailer should save about $50 million this year from new cost-control efforts. Dillard's first-quarter net earnings dropped 94% to $2.7 million, while sales fell 4.9% and comps were down 6.0%.
Fred's Profit Flat on Wider Sales
While growing its first-quarter sales by 5% to $464.3 million, neighborhood general merchandiser Fred's Inc. fought to keep profits roughly flat at $7.3 million, down from $7.4 million for the year-ago period. Comp-store sales rose 2.1%. While gross profit was up 4% to $132.5 million, gross margin was off 20 basis points to 28.5% of sales — but SG&A costs were trimmed by 20 basis points. Michael Hayes, ceo, said, "A key to our first-quarter performance was the strong 1.7% improvement in comparable customer traffic." He said Fred's would keep up its new marketing initiatives to drive traffic.
Turnaround Tough at Cost Plus
Cost Plus World Market reported a first quarter loss of $32 million, or $1.45 per share, compared with a loss of $11.1 million, or 50 cents per share last year. Sales climbed 5% to $211.7 million, with comps up 0.6%. Barry Feld, president and ceo of the 292-unit specialty chain, said that minor comp gain "was four years in the making." Regarding a boost in home goods, Feld said, "The increase in home was generated by the furniture division and was primarily the result of the early in-store presentation of our outdoor furniture."
Profits Bloom as Costco Drives Sales
Warehouse club Costco reported profits up 31.7% to $295.1 million for the third quarter ended May 11, as revenues boomed 13.3% to $16.6 billion. Non-gasoline U.S. comps rose 4%. Costco has notched $884.9 million in net profit for the 36 weeks year-to-date of its fiscal 2008, a big expansion in income over the same period for 2007 — which included $83.5 million in after-tax one-time charges. Even leaving those charges out of the equation, Costco drove profits up 11.5% year-to-date.
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