NEW YORK — Minor cost increases offset a small sales gain as Burlington Coat Factory Warehouse Corp.’s profits dipped slightly in the third quarter.
This story first appeared in the April 7, 2003 issue of WWD. Subscribe Today.
For the three months ended March 1, the Burlington, N.J.-based retailer said net income slipped 1.6 percent to $36.7 million, or 83 cents a share. That compares with last year’s earnings of $37.3 million, or 84 cents. Earnings per share exceeded the Wall Street consensus estimate by 3 cents.
Net revenues for the period rose 2.7 percent to $808.7 million from $787.5 million last year. Of that, sales grew 2.6 percent to $799.9 million from $779.8 million a year ago, as same-store sales declined 2.5 percent.
“It’s been an up and down quarter in terms of sales,” said chief accounting officer Robert LaPenta Jr. on a conference call. “It was a very soft Christmas and then it got very cold after Christmas and that sustained the outerwear sales and cold weather product into January and February, when you saw nice comparative sales increases. Then out of nowhere we got hit with that snowstorm over the President’s Day weekend in the Northeast and Midwest and we had stores that had to outright close.”
December sales comped down 4.2 percent, January comps increased 2.4 percent and February same-store sales fell 2.3 percent.
Despite the slender sales gain, a number of minute expense increases caused profits to regress. While selling, general and administrative costs remained constant at 26.6 percent of sales, cost of sales grew 4 basis points, depreciation charges rose 28 basis points and interest expense climbed 3 basis points. Amortization charges, however, dipped 4 basis points. LaPenta added that initial markups and initial markdowns were “very consistent” with the prior-year quarter.
For the first nine months of the year, Burlington Coat reported a 7.3 percent gain in net income to $62.2 million, or $1.40, versus last year’s earnings of $58 million, or $1.31.
Net revenues increased 6 percent to $2.11 billion from $1.99 billion a year ago. Of that, net sales rose 5.7 percent to $2.09 billion from $1.98 billion, but same-store sales decreased 1.1 percent.
During the nine-month period the company opened 17 new stores and relocated three existing stores. Burlington Coat said it expects to open five Burlington Coat Factory stores and one MJM Designer Shoe store in the fourth quarter.