Tandy Brands Accessories Inc. said higher sales, cost-cutting and improved sourcing and distribution strategies allowed the company to narrow its third-quarter net loss.
For the period ended March 31, the Dallas-based firm reported a net loss of $3.3 million, or 48 cents a diluted share, versus a loss of $12.3 million, or $1.78 a share, in the year-ago period. Excluding onetime charges, Tandy recorded an adjusted net loss of $1.6 million, or 23 cents a diluted share.
Sales for the quarter increased 10.5 percent to $27.7 million from $25.1 million, a year earlier.
Analysts surveyed by Yahoo expected a loss of 88 cents a share on revenue of $27.7 million.
The company said excluding a $7.5 million inventory writedown in the third quarter of 2009, quarterly gross margins improved to 38.5 percent of sales versus 36.6 percent. The increase in gross margin was driven by improved margins in the accessories segment.
Selling, general and administrative costs were reduced 14.7 percent to $11.2 million from $13.1 million.
“Our strong performance in the third quarter is a testament to the positive operational and financial milestones we have achieved today,” president and chief executive officer Rod McGeachy said Thursday on the company call. “We believe our core competencies of design, sourcing and distribution serve strong underlying fundamentals to weather the challenging operating environment and emerge as a stronger and more profitable company.”
For the nine months, the vendor swung to a profit of $4.6 million, or 65 cents a diluted share, compared with a net loss of $12.6 million, or $1.82, in 2009. Revenues rose 10.4 percent for the period to $113.2 million from $102.6 million.
Tandy reiterated its guidance of 8 to 12 percent annual sales growth, or revenue ranging from $139.3 million to $144 million. “Sharp improvements in profitability” are also expected for the year, the company said.
Wall Street is projecting a loss of 36 cents for the year on annual sales of $141.3 million.