Sales, costs hurt Burlington Coat

By Don Hogsett -- Home Textiles Today, 8/25/2003 12:00:00 AM

BURLINGTON, NJ —

Hurt by a losing trifecta of falling same-store sales, eroding margins and higher costs, second-quarter profits at Burlington Coat Factory Warehouse Inc. were slashed by more than two-thirds, falling by 69.4 percent, to $2.7 million from $8.9 million last year.

Overall sales at the retailer edged up by 1.2 percent, to $608.6 million from $601.6 million a year ago, helped by new store openings. But a weak retail environment compounded by poor spring weather caused same-stores to fall by 4.1 percent, putting pressure on costs, margins and the bottom line.

Through its Luxury Linens unit, Burlington is the nation's 13th largest home textiles retailer, slightly ahead of Macy's East, with $273 million in home fashions sales last year.

Average gross margin contracted by 20 basis points, or two-tenths of a percentage point, to 39.3 percent from 39.4 percent a year ago. Doing even more damage, costs climbed higher by 60 basis points, or six tenths of a percentage point, to 35.8 percent of sales from 35.2 percent a year ago. Measured in absolute dollars, costs increased by 2.8 percent, to $217.8 million from $211.8 million the preceding year, pulling about $6.0 million away from the bottom line.

Interest expense more than doubled in the period, climbing by 116.9 percent, to $681,000 from $314,000.

Burlington Coat Factory Warehouse Inc.