NEW YORK — Decreased sales and heavy promotions drove Goody’s Family Clothing Inc.’s third-quarter results into the red.
The Knoxville, Tenn.-based firm registered losses of $3.1 million, or 10 cents a share, for the period ended Nov. 2. This compared with year-ago earnings of $276,000, or 1 cent.
Results for the most-recent quarter included one-time expenses aggregating to 3 cents a share aftertax, related to a severance agreement and fees incurred during a potential acquisition of the company. Discussions surrounding a possible acquisition ended Nov. 1.
Sales for the 328-door chain dipped 3.9 percent to $268.3 million in the quarter from $279.3 million. Comparable-store sales decelerated by 3.9 percent.
“The company was more promotional this quarter when compared to plan and last year’s third quarter in an effort to stimulate sales and reduce inventories,” said chairman and chief executive Robert Goodfriend in a statement. Lower-than-planned sales, more promotional activity and the special items resulted in the quarter’s loss, he said.
Inventories, which were 7.3 percent below year-ago levels at the close of the quarter, were also below plan. Selling, general and administrative expenses rose by 120 basis points to 30.9 percent of sales.
For the nine months, Goody’s managed profits of $3.7 million, or 11 cents a share. This compared favorably with year-ago losses of $12.5 million, or 39 cents.
Sales for the period inched up 0.8 percent to $835.9 million from $829.4 million a year ago. Comps waned 1.6 percent.
Lower comps so far this year and higher-than-planned advertising expenditures in the second half have Goody’s looking for an SG&A reduction for the full year of a less than the previously expected 100 basis points.