Bamboo gives Tuesday Morning a lift
Staff Staff -- Furniture Today, January 29, 2008
Dallas – Coming off a difficult second quarter that resulted in falling sales and profits, upscale closeout retailer Tuesday Morning is avoiding further “seasonal and fashion jeopardy” going forward as it marks down seasonal categories and increases inventories in stronger performing businesses such as “green” products – particularly those made from bamboo.
“It is difficult to work against continual loss leaders in this environment, so we’re steering away from what we believe will be continually pressured categories and moving aggressively into some categories where we have had some good results, particularly the ‘green’ movement,” said Kathleen Mason, president and ceo of the 831-unit chain during today’s earnings call.
Net income for the second quarter ended Dec. 31 was $20.5 million or $0.50 per diluted share, compared to $23.8 million or $0.57 per diluted share during the same quarter last year, a 13.9% decline. For the six months year-to-date, earnings fell 19.6% to $21.7 million or $0.52 per diluted share from $27.0 million or $0.65 per diluted share in the year-ago period.
Sales for the quarter were down 3.9% to $308.7 million, with a comp drop of 7.6%. Half-year sales were off 1.0% to $510.3 million, with a same store drop of 5.3%.
Tuesday Morning is No.17 on the HTT Top 50 Retailing Giants list, with 2006 home textiles sales of $263 million.
During the second quarter, Tuesday Morning’s largest decliners included three of its “highly developed businesses,” Mason said – toys, small electrics and collectibles, the latter of which she described as “the ultimate discretionary purchase.”
On the flip side, the retailer, with stores in 47 states, “had good luck” with all bamboo-made products, in particular sheets, towels, closet organizers, and “anything related to energy conservation in any parts of the business,” she said. “All things bamboo seem to be doing really well.”
Also still on the radar are high-end textiles, such as high thread count, finely finished, name brand Italian linens. These, she said, are slow but consistent sellers. In response to consumers’ requests, the retailer is “really moving into those categories and the new categories are exciting categories and we are aggressively priced on those.”
Pricing was another important topic -- the company said its average price per unit has not changed. “We’ve shifted across categories but we’ve been relatively consistent in terms of our overall average price point,” Mason insisted.
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