LOS ANGELES — Carter Hawley Hale reported earnings before interest and taxes (EBIT) fell 10 percent in the first quarter ended April 30, hampered by the closing of four earthquake-damaged stores.
After heavy interest costs, the department store chain posted a net loss of $18 million.
David L. Dworkin, president and chief executive officer, said the company’s EBIT was in line with analysts’ projections and ahead of the company’s internal plan, despite the four closed stores. He also noted an improving sales trend.
EBIT in the quarter was $4.6 million against $5.04 million a year earlier. Interest costs in the latest quarter were $22.5 million.
The net loss in the quarter was about flat with a pretax loss of $17.3 million a year earlier. The year-ago quarter included a tax benefit of $6.9 million that reduced the bottom line loss to $10.4 million.
Sales slid 2.6 percent to $431.1 million from $442.5 million, reflecting the four closed stores. Same-store sales increased 4.7 percent.
Dworkin said men’s wear, cosmetics and home divisions each showed strong gains.
“While women’s apparel is still lackluster, we are beginning to see better sales trends in some areas of that business also,” he added.
Elayne Garafolo, CHH’s executive vice president of sales promotion and marketing, added that special sizes, including petite and large sizes, are “considerably” ahead of last year and junior is showing good gains.
She said that the softness in career apparel reflected the company’s decision to exit the bridge business.
Dworkin said he was “optimistic in our ability to achieve substantial gains this year over 1993.”
Several analysts, however, said CHH’s turnaround will be tough in a region dominated by larger department store chains as May Department Stores, R.H. Macy & Co. and Nordstrom.
“It’s going to be very difficult for any smaller West Coast department store chain because its competition is limbs of much larger expense structures, which enables them to compete better on pricing,” said Thomas H. Tashjian, at First Manhattan Co. CHH operates 83 department stores under the names The Broadway, Emporium and Weinstocks.