Hancock Fabrics 13-week sales ended July 30 drop 7.3%
17 Aug '05
3 min read
Fabric wholesale merchant Hancock Fabrics Inc announced the unaudited results of 2005's second quarter.
Sales in the 13 weeks ended July 30, 2005 decreased 7.3 percent to $83.2 million from $89.8 million in the same quarter of 2004. The Company reported a net loss of $5.4 million, or $.29 per diluted share, compared with a loss of $2.7 million, or $.15 per diluted share, in the second quarter a year ago.
The earnings comparison was negatively affected by an increase in the government's Producer Price Index that the Company uses to measure inflation in inventories, which resulted in a higher LIFO charge to cost of sales this year. Although having no cash impact, the LIFO charge caused a negative swing in the after-tax loss comparison of $.05 per share.
In commenting on the results, Jane Aggers, Chief Executive Officer, stated, "A decline in comparable store sales of 8.1 percent was the overriding factor weighing on the second quarter's results, although the effect was partially mitigated by a higher gross margin and control of expenses. Even with the much higher non-cash LIFO charge, gross margin increased over the previous year's second quarter, representing the first quarterly increase in margin since 2003."
"Also, selling, general and administrative expense dollars continued to be well controlled, despite having 13 more stores, incurring incremental costs in connection with the ongoing store makeovers and contending with normal expenseinflationary pressures," Aggers stated.
marketing@alchempro.com
