WOOLWORTH POSTS $37M PROFIT IN 3RD QUARTER; SALES SLIDE 15.8 PERCENT IN NINE MONTHS
NEW YORK — Without the burden of its underperforming stores, Woolworth Corp. returned to the black in the third quarter with a profit of $37 million, or 28 cents a share. In the 1993 quarter, after a $347 million after-tax restructuring charge, Woolworth lost $350 million. David Poneman, a retail analyst at Sanford Bernstein, said Woolworth’s third-quarter earnings were roughly in line with his expectations.
As reported, Woolworth has closed 970 stores in the U.S. and Canada and sold or closed 142 Canadian Woolco stores. These units contributed nearly $400 million to 1993 sales.
Woolworth noted it would include a special gain of about $29 million from the sale of property in its fourth-quarter results.
At the specialty store group, which includes Foot Locker, Northern Reflections and Champ Sports, operating profit came to $95 million against $61 million after a $72 million provision mainly for workers’ compensation and general liability insurance.
Operating profits in the U.S. rose to $96 million from $5 million, reflecting the special charge. Overall foreign operations were down 68 percent, dented by a loss in Germany. Net revenues in the quarter declined 12.1 percent to $2.1 billion from $2.4 billion. Excluding divested stores, sales would have been up 5.4 percent.
The company said its specialty segment showed strong sales gains in the quarter, mainly from store openings. Domestic stores sales dipped 2.8 percent, but would have been up 4.4 percent excluding divested units. Foreign stores were down 25.9 percent, but would have been up 7.3 percent. In the nine months, Woolworth’s net losses narrowed to $43 million from $384 million. On an operating basis, Woolworth earned $73 million against a loss of $527 million, after the $347 million restructuring charge. Sales slid 15.8 percent to $5.7 billion from $6.8 billion. — Fairchild News Service