Beating Wall Street estimates by 4 cents a share, Dress Barn Inc., Suffern, N.Y., reported first-quarter earnings ballooned 31.4 percent to $7.9 million, or 35 cents a share, as sales grew 9 percent to $142.8 million. The 728-unit off-price retailer netted $6 million, or 27 cents a share, on sales of $137.4 million, in the prior-year period.
Lower costs and heftier merchandise margins fueled the strong earnings growth, said Elliot S. Jaffe, chairman and chief executive officer, in a statement. He also cited the positive impact of closing marginal units and opening larger-sized stores on the firm’s performance in the first quarter, which ended Oct. 26. During the period, Dress Barn opened or converted 29 units to the larger formats and closed seven of its smaller-sized older stores.
Better cost controls and beefier gross margins lifted third-quarter earnings 18.4 percent at Duckwall-Alco Stores, the 181-unit discount chain based in Abilene, Kan. Despite a 4 percent drop in same-store sales, profits advanced to $701,000, or 17 cents a share, from $592,000, or 15 cents.
Glen L. Shank, president and chief executive officer, said in a statement that the firm eliminated three promotional circulars in the year, thereby reducing markdowns and advertising costs, but dampening same-store sales. Overall sales for the three months ended Oct. 27 climbed 6.7 percent to $64.9 million from $60.8 million.
On Jan. 31, Duckwall will get the rights to 14 former Val Corp. retail locations in eastern Indiana and western Ohio and will reopen them as ALCO stores by May 4, the end of its first quarter. A total of 40 store openings are planned for 1997.
For the nine months, Duckwall’s net ran up 19.4 percent to $2.6 million, or 65 cents, from $2.2 million, or 55 cents. Sales grew 8 percent to $192.6 million from $178.3 million, with same-store sales down 2.4 percent. The company completed a secondary public offering in October, raising $13.1 million, and now has 5.08 million shares outstanding.
Hurt by heavy back-to-school markdowns and a special charge, Hills Stores Co. reported a third-quarter loss of $5 million, compared with year-ago earnings of $22.4 million, or $2.01 a share. The $2.2 million after-tax charge in the latest quarter was due to the early extinguishment of debt; prior-year results include a tax gain of $20.3 million. Sales at the 165-store discount chain rose 2.9 percent to $461 million from $448 million. Same-store sales edged up 1.5 percent in the quarter ended Nov. 2. For the nine months, the company widened its losses to $32.1 million from $27.1 million. This year’s loss includes after-tax extraordinary losses of $4.2 million from the early extinguishment of debt, as well as a pretax, noncash charge of $11.7 million for the impairment of long-lived assets. Sales were up 1.6 percent to $1.22 billion from $1.20 billion.