Value City loss widens in second qtr.
By Don Hogsett -- Home Textiles Today, 9/15/2003
COLUMBUS, OH — Hobbled by thinning margins and rising costs, Value City Department Stores recorded a widening second-quarter loss of $3.6 million, weakening further from a year-ago deficit of $726,000.
Sales at the parent of Value City, Filene's Basement and DSW Shoe Warehouse rose by 6.2 percent, to $604.6 million from $569.1 million last year, helped by a strong rebound in same-store sales and the roll-out of new shoe stores.
Same-stores grew by 1.6 percent, recovering from a year-before drop of 4.3 percent. The biggest improvement in same-store sales was reported at Value City units, where comps increased by 0.6 percent vs. a prior-year loss of 6.1 percent. Filene's Basement sales rose by 0.3 percent vs. a stronger year-ago gain of 1.2 percent. Same-stores at DSW were up by 4.5 percent, improving after a last-year decline of 2.1 percent.
Helping to fuel the quarterly loss, costs climbed higher by 50 basis points, or half a percentage point, to 39.0 percent of sales from 38.5 percent a year ago. Measured in absolute dollars, costs increased by 7.5 percent, to $235.9 million from $219.3 million last year, pulling more than $16 million away from the bottom line.
Margins thinned out modestly, by 20 basis points, or two-tenths of a percentage point, to 39.1 percent from 39.3 percent a year ago.
But with stronger sales offsetting margin erosion, gross margin dollars still improved by 5.7 percent, to $236.4 million from $223.6 million the year before.
The retailer took in $1.3 million in licensing fees and other revenue, but even then that figure was down by 46.9 percent from $2.4 million the preceding year.
Value City recorded an income-tax benefit, stemming from earlier losses, of $2.6 million, up from a prior-year tax benefit of $451,000.
| Qtr. 8/2 (x000) | 2003 | 2002 | % change |
| Sales | $604,594 | $569,062 | 6.2 |
| Oper. income (EBIT) | 491 | 4,255 | -88.5 |
| Net income | (3,648)a | (726)a | — |
| Per share (diluted) | (0.11) | (0.02) | — |
| Average gross margin | 39.1% | 39.3% | — |
| SG&A expenses | 39.0% | 38.5% | — |
| Six months | |||
| Sales | 1,193,126 | 1,154,974 | 3.3 |
| Oper. income (EBIT) | (18,830) | 4,172 | — |
| Net income | (16,821)b | (5,501)b | — |
| Per share (diluted) | (0.50) | (0.16) | — |
| Average gross margin | 38.0% | 38.7% | — |
| SG&A expenses | 39.1% | 38.3% | — |
| (loss) a-Second-quarter results include $1.3 million in licensing fees and other revenues, compared with $2.4 million in the year-ago period; and a $2.6 million income-tax benefit vs. a prior-year tax benefit of $451,000. b-Six-month results include $2.8 million in licensing fees and other revenue, compared with $4.6 million the preceding year; and an income-tax benefit of $11.9 million vs. $2.0 million during the first six months of 2002. Six-month 2002 results included a $2.1 million charge stemming from a change in accounting. |
|||
