Burlington Coat Factory Investment Holdings Inc. lifted its second-quarter profits nearly a third despite decreases in net and same-store sales.
This story first appeared in the January 21, 2010 issue of WWD. Subscribe Today.
For the three months ended Nov. 28, the Burlington, N.J.-based off-price chain reported net income of $24.2 million, 33.2 percent above the $18.2 million reported during the comparable 2008 period. The quarter included an impairment charge of $2.8 million for long-lived assets, higher than the $296,000 charge in last year’s period.
Sales declined 3.7 percent to $965 million from $1 billion in the year-ago quarter and fell 5.2 percent on a same-store basis.
Adjusted earnings before interest, taxes, depreciation and amortization, a non-GAAP measure used by Burlington Coat to exclude the effects of impairment charges and other items, rose 1.2 percent to $111.5 million from $110.2 million a year ago. The increase was “primarily the result of continued cost reduction initiatives,” Burlington Coat said.
The combination of the cost of sales and selling and administrative expenses dropped $40.4 million, or 4.4 percent, to $868.8 million year-over-year.
Tom Kingsbury, president and chief executive officer, noted the bottom-line improvement came “despite the unseasonably warm weather in November which negatively impacted overall sales. In addition to our continued emphasis on expense control, focused inventory management has allowed us to reduce our average inventory per store by 12 percent while simultaneously improving both the currency and content. This has us well-positioned for the future.”
For the six months to date, net income hit $807,000 versus a net loss of $14.3 million in the first half of 2008. Net sales dropped 2.3 percent, to $1.67 billion from $1.71 billion, while same-store sales decreased 5.9 percent.
Burlington Coat was acquired for $2.06 billion and taken private by Bain Capital Partners in 2006. It discloses its financial results because of public debt.