Improvements in net and same-store sales allowed Claire’s Stores Inc. to increase fourth-quarter profits and reverse a year-ago loss with a profit for the full year.
In the three months ended Jan. 29, the Chicago-based retailer of accessories and jewelry posted net income of $21.3 million, up 9.5 percent from the $19.5 million taken in during the 2009 quarter. Adjusted EBITDA — a non-GAAP measure which eliminates interest, taxes, depreciation and amortization as well as a number of nonrecurring items — grew 3.8 percent to $97 million from $93.4 million.
Net sales expanded 2.7 percent to $421.9 million from $410.7 million. Comparable-store sales were up 3.2 percent, with North American comps up 4.7 percent and Europe, calculated in local currencies, up 0.6 percent. Gross margin receded to 52.7 percent of sales from 53.2 percent in the 2009 quarter.
“We are encouraged by the fact that we have had five straight quarters of same-store sales growth,” said Gene Kahn, chief executive officer of the firm. “While we benefited to some degree by the stabilization of the broader economy, we were still well positioned at the forefront of our peer group of specialty retailers.”
In comments on the company’s quarterly conference call, Kahn said, “Accessories growth was driven by non-wearable accessories [such as handbags and wallets] and seasonal merchandise across both divisions. Jewelry demonstrated growth in the ring and necklace classifications as well as ear piercing.”
In response to analysts’ questions, company officials disclosed that accessories accounted for 55 percent of 2010 sales, versus 45 percent for jewelry, and that proprietary brands made up between 85 percent and 90 percent of its offering.
For the full year, net income came to $4.3 million versus a loss of $10.4 million in 2009. Adjusted EBITDA grew 12.8 percent to $263.9 million from $233.9 million. Sales were up 6.3 percent, to $1.43 billion from $1.34 billion, and improved 6.5 percent on a same-store basis.
Cash and cash equivalents, including restricted cash, finished the year at $279.8 million, up from $198.7 million at the close of 2009. Long-term debt fell to $2.24 billion from $2.31 billion.
The company ended the fiscal year with 3,376 stores of which 2,981, in North America and Europe, are owned by the company.
Apollo Management acquired Claire’s for $3.1 billion and took it private in 2007.