PROFFITT’S POSTS 35% NET RISE; OTHERS STORES CUT LOSSES
NEW YORK — Third-quarter results reported by retailers on Thursday were a mixed lot, with several chains settling for reduced losses and blaming weak store traffic and strong competition.
An exception was Proffitt’s Inc., the Alcoa, Tenn.-based department store chain that has been on the acquisition trail. There, profits leaped 35 percent.
Many of the results were in sharp contrast to robust reports earlier this week from Dayton Hudson Corp., Loehmann’s, Ann Taylor Stores Corp. and The Limited, among others.
On Thursday, Bon-Ton Stores, a 69-unit department store chain, reported a smaller loss, as did two specialty chains, 69-store Charming Shoppes and 289-unit Deb Shops. Catherines Stores Corp. saw its profits plunge 94 percent, a drop that officials of the 461-store large-size apparel chain attributed to light traffic.
Bon-Ton Stores slashed its third-quarter loss to $242,000, from a year-earlier deficit of $3.3 million. Sales rose 6.8 percent to $148.9 million, versus $139.4 million. Comparable-store sales increased 3.2 percent.
Michael L. Gleim, Bon-Ton’s vice chairman and chief operating officer, said third-quarter sales growth reflects continuing strength in women’s sportswear, coats and shoes, which posted gains above the company average.
“The women’s sportswear complex in particular appears to be benefiting from the new alignment of moderate-to-better vendors and is achieving double-digit sales increases,” Gleim added.
In the nine months, the York, Pa.-based firm pared its loss to $4.4 million from a loss of $7.5 million. Sales gained 3.9 percent to $410 million from $394.7 million. Comps edged up 1.6 percent.
As part of its plan to eliminate underperforming stores, Gleim said Bon-Ton will shut five units on Jan. 11 in Johnstown, Frackville and Washington, Pa.; Cortland, N.Y., and Fairmont, W. Va.
Charming Shoppes slashed its third-quarter loss to $3.6 million from a loss of $24.7 million. Sales climbed 9.5 percent, totaling $242.4 million, against $267.7 million, and same-store sales were up 3 percent.
In the nine months, Charming lopped its loss to $9.5 million from $32.2 million. Sales moved up 4.4 percent to $746.5 million from $780.6 million. Same-store sales jumped 5 percent.
Charming opened five new stores and closed 138 during the latest quarter. The Bensalem, Pa.-based firm operates 1,168 stores in 45 states under the names “Fashion Bug” and “Fashion Bug Plus.”
Another specialty retailer, Deb Shops, the 289-store chain based in Philadelphia, trimmed its third-quarter loss to $2.5 million from $2.8 million. Sales leaped 11 percent to $46.8 million from $42.1 million. Deb narrowed its nine-month loss to $6 million from $6.7 million a year ago. Sales rose 7.8 percent to $134.5 million from $124.8 million.
However, poor store traffic and heavy competition were blamed by Catherine Stores for a 94 percent dive in third-quarter profits to $40,000, or 1 cent a share, versus $674,000, or 9 cents. Sales slipped 6 percent to $65.6 million from $69.6 million. Comps slumped 9 percent.
Bernard J. Wein, president and chief executive officer said in a statement, “We continue to find it difficult to achieve sales gains in this very competitive environment and even with strong promotional programs are unable to increase store traffic.”
On the plus side, Wein said merchandise margins are up compared with year-ago levels, while inventories are down.
“This inventory control will aid us in continued improvement of our merchandise margins as we move forward,” Wein forecast.
In the nine months, profits at Memphis, Tenn.-based Catherine’s sank 30 percent to $3.9 million, or 51 cents, from $5.6 million, or 71 cents. Sales were nearly flat at $204.9 million. Comps tumbled 5.2 percent.
In contrast to the weak results, earnings at Proffitt’s advanced to $10.1 million, or 44 cents, from $7.5 million, or 36 cents. The rapidly growing department store chain said it is realizing synergies from its acquisitions of Younkers on Feb. 3, and Parisian on Oct. 11.
After a $400,000 charge for the merger and integration of Younkers, $600,000 in expenses from the attempted takeover of Younkers by Carson Pirie Scott & Co., and a gain of $200,000 for the sale of property, income in the latest quarter was $9.9 million, or 43 cents.
In the year-ago quarter, after special items, net income came to $6.9 million, or 33 cents.
Sales for the quarter ended Nov. 2 totaled $368.3 million, a 14 percent gain from $323 million. Same-store sales grew 4 percent.
Revenue at Younkers was up 1 percent to $150.9 million; McRae’s was up 2 percent to $111 million, and revenues for Proffitt’s stores increased 4 percent to $66.9 million. About $39.5 million in sales came from Parisian.
Same-store sales at Younkers were ahead 7 percent; McRae’s were flat, and Proffitt’s gained 6 percent.
In the nine months, income before special items was $21.1 million, or 97 cents, compared to $14.8 million, or 69 cents.
After a $3 million charge related to the Younkers merger and $1.7 million for the defense against the takeover of Younkers by Carson’s, along with a $1.6 million gain on the sale of properties, profits in the period were $19.7 million, or 91 cents. A year earlier, Proffitt’s netted $13 million, or 60 cents.
Sales in the year to date rose 5 percent to $936.6 million from $888.9 million, and comps climbed 4 percent. Revenue at Younkers slid 1 percent to $401.3 million; McRae’s was up 3 percent to $313.3 million, and Proffitt’s added 2 percent to $182.5 million. Same-store sales increased 4 percent at Younkers, 2 percent at McRae’s and 8 percent at Proffitt’s.