NEW YORK — The Elder-Beerman Stores Corp.’s fourth-quarter profits withered under the dual pressures of soft sales and higher expenses.
This story first appeared in the March 31, 2003 issue of WWD. Subscribe Today.
For the three months ended Feb. 1, the Dayton, Ohio-based operator of 68 department stores in eight states said net income declined 14.5 percent to $8.3 million, or 72 cents a diluted share, versus prior-year earnings of $9.7 million, or 84 cents. The most recent results included a pre-tax charge of $3.6 million from losses incurred from the termination of a company-defined benefits program.
Net revenues for the period fell 2.3 percent to $222.4 million from $227.8 million, as comparable-store sales fell 2.6 percent.
While merchandise, occupancy and buying costs retracted 100 basis points to 70.2 percent of sales from 71.2 percent a year ago, those efficiencies were more than offset by a 220 basis point expansion of selling, general and administrative expenses to 23.7 percent from 21.5 percent last year.
“Throughout 2002, my primary focus for Elder-Beerman was to improve the organization’s productivity and financial strength,” said chief executive officer Bud Bergren in a statement. “Today, we are in strong financial condition. The improvement in operating results, expense and working capital management, most notably inventory control, and disciplined capital spending provided free cash flow to reduce long-term debt by $33.4 million during 2002.”
Bergren added that yearend revolver borrowings were reduced to $6 million from $36 million at the end of the last fiscal year.
Better inventory management was evidenced by an 8.6 percent decline in yearend inventory levels, compared with the prior year; a retail inventory turnover improvement of 15 percent to 2.2 times in 2002, and an 11 percent gain in inventory freshness.
Overall, for the full fiscal year, Elder-Beerman reported a wider net loss of $14.2 million, or $1.33 a diluted share, compared with its net loss of $920,000, or 8 cents, a year ago.
However, excluding the benefits charge, as well as a noncash aftertax charge of $15.1 million, or $1.32, for a change in accounting principle and other special items amounting to $4.4 million, net income would have been $945,000, or 8 cents.
Net revenues for the year declined fractionally, or 0.4 percent, to $670.6 million from $673.5 million, and same-store sales dipped 2.4 percent.