NEW YORK — The Elder-Beerman Stores Corp.’s fourth-quarter profits withered under the dual pressures of soft sales and higher expenses.
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.
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