SPIEGEL PROFITS DECLINE 47% FOR 4TH QUARTER ON FLAT SALES
DOWNERS GROVE, Ill. — Dragged down by poor results from its catalogs, Spiegel Inc. reported fourth-quarter earnings plunged 47 percent.
In the quarter ended Dec. 31, earnings fell to $19.8 million, or 18 cents a share, from $37.4 million, or 35 cents, a year earlier. Sales were flat at $1.1 billion.
Results were well below Wall Street estimates of 25 cents a share, and shares of Spiegel fell 3/8 to 6 3/4 Wednesday on the over-the-counter market.
For the year, the company widened its loss to $13.4 million from a loss of $9.5 million. Sales eased 1.2 percent to $2.85 billion from $2.89 billion.
John J. Shea, vice chairman, president and chief executive officer, in a statement called overall fourth-quarter and full-year results “disappointing,” though he noted that the performance “was mixed by division.”
Eddie Bauer achieved record results, with sales rising 8 percent to $1.1 billion in the year from $1.02 billion in 1995. Same-store sales rose 1 percent in the quarter and were flat in the year. Margins increased significantly as a result of lower markdowns from improved promotional strategies and inventory planning.
On the downside, catalog sales for the year fell 4.6 percent to $1.67 billion from $1.75 billion, and margins decreased due to liquidated merchandise.
Spiegel Catalog and Newport News were hurt by tightened credit policies and lower productivity from catalog mailings. Shea pointed out that “the continued industrywide trend toward higher charge-offs, particularly bankruptcies, affected credit performance.”
“While 1996 as a whole fell short of our expectations, we made progress in some key areas,” said Shea. “Operating expenses were down, positive cash flow was generated from operations, and total debt was reduced.”