Value City rebounds in 4Q
By Staff -- Home Textiles Today, 4/21/2003
COLUMBUS, OH — Building sales, slashing costs and bulking up margins, Value City Department Stores Inc., climbed back on track during the fourth quarter, recording a profit of $5.3 million, recovering from a year-before loss of $8.7 million.
Sales at the off-price retailer — which operates Value City Department Stores, DSW Shoe Warehouse and Filene's Basement stores — climbed by 7.2 percent, lifted by continued expansion, to $678.8 million from $632.9 million last year. But the acid test of same-store sales dropped off by 4.8 percent vs. 0.9 last year.
In a big lift to the bottom line, average gross margin widened substantially, by 250 basis points, or 2.5 percentage points. Gross margin dollars shot up by 14.7 percent, to $256.2 million from $223.5 million, driven by the combination of stronger sales and margins.
In another big assist, costs were pared back sharply, by 270 basis points, or 2.7 percent, to 35.2 percent of sales from 37.9 percent the preceding year. Measured in absolute dollars, costs were whittled down by 0.3 percent, generating a cash savings of $696,000.
Helped by the stronger margins and lower costs, the retailer put up an operating profit of $17.2 million, bounding back from last year's $16.3 million operating loss.
Additionally, the retailer kept a watchful eye on stockpiles, and inventories declined by 1.8 percent, or $7.0 million from the year-before level.
However, the retailer's interest expense more than doubled in the closing quarter, rising by 106.7 percent, to $9.5 million from $4.6 million last year, an increase of almost $5 million.
| Qtr. 2/1 (x000) | 2002 | 2001 | % change |
| Sales | $678,755 | $632,884 | 7.2 |
| Oper. income (EBIT) | 17,178 | (16,283) | — |
| Net income | 5,332a | (8,675)a | — |
| Per share (diluted) | 0.16 | (0.26) | — |
| Average gross margin | 37.8% | 35.3% | — |
| SG&A expenses | 35.2% | 37.9% | — |
| 12 months | |||
| Sales | 2,450,719 | 2,283,878 | 7.3 |
| Oper. income (EBIT) | 26,517 | (34,311) | — |
| Net income | (3,665)b | (28,723)b | — |
| Per share (diluted) | (0.11) | (0.85) | — |
| Average gross margin | 38.2% | 37.4% | — |
| SG&A expenses | 37.1% | 38.9% | — |
| (loss) a-Fourth-quarter results include $638,000 in license fees from affiliates, compared with $5.4 million last year; $917,000 in miscellaneous income, compared with $1.5 million last year; and a $3.9 million income-tax provision, compared with a $3.3 million income-tax benefit in 2001. Prior-year results included a $2.0 million loss form a joint venture. b-12-month results include $2.6 million in license fees form affiliates, compared with $12.1 million last year; $4.8 million in miscellaneous income, compared with $5.7 million last year; a $944,000 provision for income taxes, compared with a $16.5 million income-tax benefit the preceding year; a $2.1 million extraordinary charge; and a $2.1 million charge stemming from an accounting change. |
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