NEW YORK — Markdown pressures at Burlington Coat Factory Warehouse Corp. reduced a healthy sales gain into slight profit growth in the second quarter.
This story first appeared in the January 13, 2003 issue of WWD. Subscribe Today.
For the three months ended Nov. 30, the Burlington, N.J.-based apparel and footwear retailer reported net income nicked up 0.7 percent to $41.6 million, or 93 cents a diluted share. That compares with earnings of $41.3 million, also 93 cents, in the year-ago quarter. Earnings per share fell short of the Wall Street estimate by a nickel.
Sales for the period rose 5.2 percent to $782.8 million, from $744.2 million a year ago, as same-store sales dipped 1.3 percent. Markdown pressure caused cost of sales to increase 40 basis points to 60.8 percent of sales from 60.4 percent last year. That helped put a crimp in the company’s gross margin, which declined for the first time in eight quarters, dipping 40 basis points to 39.2 percent from 39.6 percent in the prior-year quarter.
“The department that showed the best comps was shoes,” said chief executive officer Monroe Milstein on a conference call with analysts. “That is where our margins did the best. We haven’t really seen any disastrous problems with margins, but we can’t make any predictions.”
Burlington Coat operates 333 stores in 42 states.