Burlington Coat Q1 loss at $17M

By Don Hogsett -- Home Textiles Today, 10/20/2003 12:00:00 AM

BURLINGTON, NJ —

With same-store sales declining, and spending more than it's making selling its goods — as it historically has during the first fiscal quarter — Burlington Coat Factory Warehouse Corp. recorded a $17.1 million loss during its opening quarter ended in August 30, modestly paring a year-ago deficit of $16.1 million.

Sales at the parent of Luxury Linens improved by 4.7 percent, to $529.6 million from $506.1 million the preceding year. But the crucial gauge of same-store sales declined by 1.6 percent, the retailer reported.

Forcing the company into a loss, the retailer recorded costs of $205.2 million during the quarter, exceeding the gross profit of $193.1 million it made selling its merchandise.

On the upside, the retailer expanded its margins substantially during the period, and margins also grew at a faster pace than costs, relieving some of the pressure and helping the company to narrow its losses from year-ago levels.

Average gross margin increased by 90 basis points, or nine-tenths of a percentage point, to 36.5 percent from 35.6 percent a year ago. Gross margin dollars improved by 7.1 percent, to $193.1 million from $180. 3 million last year.

Operating costs grew by 20 basis points, or two-tenths of a percentage point, to 38.7 percent from 38.5 percent last year.

Putting additional pressure on the bottom line, interest expense, while still relatively low, increased by 73.8 percent, to $782,000 from $450,000 a year ago.

Providing some relief to the bottom line, the retailer recorded an income-tax benefit of $10.8 million, modestly more than a $9.8 million tax benefit last year.

During the opening quarter, the retailer opened 11 new Burlington Coat Factory Warehouse stores, while closing two others. It also shuttered its seven Decelle stores and plans to convert them to other nameplates.

By the end of August, Burlington operated 337 stores in 42 states. The retailer said it will open an additional 16 to 20 stores this year, while relocating eight during the balance of the year.

Burlington Coat Factory Warehouse Corp.