Cutting its losses: Elder-Beerman improves earnings

DAYTON, OH— An improvement in its operating results helped Elder-Beerman Stores Corp. reduce its red ink in the third quarter.

The department store chain posted a $2.1 million net loss in the quarter just concluded, as opposed to the $6.8 million loss it reported for the third quarter of 2001.

Among other hopeful signs, Elder-Beerman recorded an operating profit in the quarter, $4.6 million, as opposed to the operating loss of $2.4 million from the 2001 third quarter. Key to this performance was the company's ability to control its expenses. Elder-Beerman slashed its selling, general and administrative expenses by more than 18 percent in the quarter, to $43.2 million. Its ratio of SG&A to sales fell 590 basis points, to 28.6 percent.

"Our strategies in expense control and inventory management are paying off at the bottom line," said Byron Bergren, Elder-Beerman's president and ceo.

"We continue to improve operating performance despite a difficult sales environment."

Underscoring that difficult environment, Elder-Beerman's third-quarter sales slipped 1.7 percent, to $150.9 million. The company's same-store sales declined 2.2 percent from the third quarter of last year.

Along with the dropoff in sales, Elder-Beerman's cost of goods sold ticked up slightly in the quarter. This led to a 150-basis-point fall in its average gross margin, to 26.8 percent.

The company now totals 66 department stores in Ohio, West Virginia, Indiana, Michigan, Illinois, Kentucky, Wisconsin and Pennsylvania. It also operates two furniture galleries.