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RoomStore sales drop 7.7% in fourth quarter

Furniture/mattress retailer reported a sale increase of 1.7% for the fiscal year

Jay McIntosh -- Furniture Today, June 6, 2011

RICHMOND, Va. — RoomStore's sales declined 7.7% from a year earlier to $72.9 million in its fiscal fourth quarter ended Feb. 28, the 149-store Top 100 company reported in a Securities and Exchange Commission filing last week.

The Richmond-based retailer posted a loss of $2.8 million or 30 cents per share in the quarter, compared with a loss of $1.1 million or 11 cents per share in the comparable period a year ago.

RoomStore, which operates 66 full-line furniture stores and also is 65% owner of 83 Mattress Discounters stores in Maryland, Virginia, Delaware and Washington, D.C., reported a 1.7% sales gain for the full fiscal year, to $323.4 million.

But the net loss for the year grew to $12.7 million or $1.30 per share from $7.8 million or 80 cents per share the previous year. That was partly because the company had an income tax expense of $338,000 in fiscal 2011, compared with a $2.6 million tax benefit the previous year.

Management said continued weakness in the economy and the retail furniture industry was still affecting the company, but it was able to increase sales slightly during the year partly as a result of new ad campaigns and marketing strategies.

Sales in the RoomStore chain were up 1.2% for the year to $261.8 million with 3.6% growth in same-store sales, while Mattress Discounters sales rose 3.5% with a same-store gain of 0.9%.

"We continue to work on new strategies to help draw new customers into the stores and new ways to attract customers via the Internet. We expect that the furniture industry will continue to be negatively impacted by the economy and the availability of credit to the consumer," the company added in the filing.

It said the RoomStore segment's gross margin declined to 41.2% last year from 42.9% in fiscal year 2010, mainly because of higher ocean freight and fuel costs and more sales price discounting. Mattress Discounters segment margins, however, improved to 49.9% from 45.4% a year earlier. In 2010, the chain sold more floor samples and other discontinued items.

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RoomStore Sales Down 7.7% in Fourth Quarter

Jun 16, 2011

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