Knobias Clip Report (08-26-2008) TUES
Submitted By Knobias ClipReport
TUES: CEO Discusses Impact of Economy on Q4 and FY08 Results
Tuesday , August 26, 2008 13:15ET
By Fain Hughes, fhughes@knobias.com
Tuesday Morning Corporation (TUES) reported Q4 and fiscal 2008 results before the bell on Tuesday. Net sales for Q4 were $196.5 million, compared to $219.4 million for the quarter ended June 30, 2007, a decrease of 10.4%. Net loss for Q4 was ($0.06) per diluted share, compared to net income of $0.05 per diluted share last year. Comparable store sales decreased 12.7% for the quarter.
For the fiscal year ended June 30, 2008, sales were $885.3 million compared to $924.2 million for the same period ended June 30, 2007, a decrease of 4.2%. Net income was $0.35 per diluted share compared to 2007 results of net income of $0.72 per diluted share. Comparable store sales decreased by 7.6% for the fiscal year.
The Company expects FY09 net sales to be in the range of $868 million to $878 million and Net income of $0.21 to $0.27 per diluted share. Comparable store sales are projected to be in the negative mid single digits.
Kathleen Mason, President and CEO, commented in a conference call today, “Categories that have been the cornerstone of our sales, such as high-end textiles and collectibles, were down sharply. This demonstrates consumers’ lack of confidence that the economy and home values will improve in the short term. The regions with the largest sales declines continue to be the areas most affected by housing, such as Florida, California, Nevada and Arizona. The impact of lowered sales was partially offset by a reduction in SG&A costs of 6.5% and a 19.7% reduction in inventory on a per store basis. We expect our investory levels at the end of this year to be flat versus last year. We were able to accomplish this despite the inflationary environment. We also dramatically improved our balance sheet by lowering inventory and reducing revolver debt by $48 million.”
Ms. Mason discussed store closings and explained, “We believe that relocating and expanding stores in our existing store base will improve the overall portfolio of our stores. The flexibility in our execution will better position us for long term growth while maintaining a low cost per square foot expense.”
Ms. Mason concluded, “During fiscal 2009, we are committed to producing annual profits, maintaining our exceptional balance sheet and matching expenses and inventory levels with revenue. We firmly believe that our strong balance sheet, flexible format and ability to generate positive cash flows will place us in a position to overcome the current economic environment for retailers whose primary business is decorative home furnishings. Our goal is to be a formidable niche player in a sector recovery.”
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