NEW YORK — Higher sales and lower costs allowed Friedman’s Inc. to return to profitability in the third quarter of fiscal 2002.
For the three months ended June 29, the Savannah, Ga.-based jewelry retailer reported net income of $2 million, or 11 cents a diluted share. In last year’s quarter the company posted a net loss of $7 million, or 49 cents. Earnings per share beat Wall Street estimates by a penny.
Sales for the period grew 6.8 percent to $91 million from $85.3 million a year ago. Comparable-store sales likewise increased, gaining 4 percent during the quarter.
Greater efficiency accrued to the bottom line as selling, general and administrative expenses declined 17.3 percent to $37.2 million from $44.9 million last year.
“We are pleased with the operating and financial results. Profits exceeded expectations on solid gains and improved expense levels,” said chief executive officer Bradley Stinn in a statement, asserting that Friedman had succeeded at “improving the daily execution of our business formula and enhancing our competitive position, while materially strengthening our financial position.”
In another matter, Friedman’s reported the signing of a commitment for a new $150 million senior credit facility and anticipates the signing of a commitment for a new $50 million senior credit facility for its West Coast affiliate, Crescent Jewelers. Underwritten by Bank of America and CIT Group, the new credit lines will eliminate Friedman’s guarantee of Crescent’s debt. Friedman’s will continue its financial support of Crescent in the form of direct investment.
Overall, for the nine months ended June 29, Friedman’s reported earnings shot up 84.1 percent to $23.4 million, or $1.39 a share. That compares to last year’s net income of $12.7 million, or 88 cents. Sales improved 5.9 percent to $367 million from $346.8 million a year ago as same-store sales increased 3.3 percent.
In guidance, the company reaffirmed its projection of low-single-digit comp-store-sales growth in the upcoming quarter.