Impairment charges dragged Burlington Coat Factory Investments Holdings Inc. to a large third-quarter loss despite improvements in sales and EBITDA.
The Burlington, N.J.-based off-price chain sustained a net loss of $150.9 million in the three months ended Feb. 28 versus net income of $26.8 million in the prior-year quarter. Included in the loss were pretax impairment charges of $279.3 million related to its trade name and $28.1 million connected to its stores.
EBITDA, however, rose 3.9 percent to $122 million from $117.4 million. The company said average inventory per store declined 14 percent and that overall inventory dropped to $726.8 million at quarter’s end, 7.3 percent below the prior-year level of $784.1 million.
The company expects to realize more than $60 million in expense reductions between the just concluded quarter and the current one.
Tom Kingsbury, chief executive officer, said, “Our strong inventory management has provided us the liquidity to take advantage of the many opportunistic buys available in the marketplace.”
Net sales rose 3.4 percent to $1.02 billion from $987.1 million in the 2007 period, and same-store sales declined 4.3 percent.
Cost of sales rose 3.6 percent in the quarter, to $634.4 million, while selling and administrative expenses declined 2.9 percent to $265.6 million.
The company recorded $2.6 million in expenses related to Kingsbury’s recruitment as ceo and the terms of the separation with his predecessor, Mark Nesci.
Long-term debt, excluding current maturities, declined to $1.34 billion from $1.48 billion last May 31.
For the nine months, the net loss grew to $165.2 million from $442,000 as sales rose 4.5 percent to $2.61 billion. Same-store sales dropped 2.3 percent.
Bain Capital LLC bought Burlington for $2.1 billion and took it private in 2006. The firm, which operates 427 stores, continues to disclose its financial results because of public debt.