WEAK SALES, WARM WEATHER BLAMED AS AMES LOSS GROWS TO $5.1 MILLION
ROCKY HILL, Conn. — Ames Department Stores Inc. said sluggish sales and warm weather contributed to a third-quarter loss of $5.1 million before special items.
This compared with a loss of $2.6 million before special items in the year-ago period.
In the latest quarter, the company’s net loss came to $7.5 million, after a $2.5 million provision for estimated costs related to the closing of a distribution center in Clinton, Mass. After a $928,000 gain on the early extinguishment of debt, the year-ago loss totaled $1.7 million.
Sales dipped 2.9 percent to $511.3 million from $526.5 million and same-store sales declined 1.8 percent.
Joseph R. Ettore, president and chief executive officer, said third-quarter results were hurt by an “industry-wide weak apparel business that was compounded by unseasonably warm weather.” He added that sales were stronger in marked-down apparel, sale-priced items and hard lines categories, which led to lower gross margins. In the nine months ended Oct. 29, Ames narrowed its loss to $12.1 million, before a charge for the early extinguishment of debt, from a loss of $30.5 million in the year-ago period.
After the $1.5 million charge, Ames’s loss in latest nine months was $13.6 million. The latest results also included a $12 million gain from a litigation settlement.
Sales were down 1.4 percent to $1.4 billion from $1.5 billion and same-store sales slid 0.5 percent.
Ettore noted that while sales and EBITDA (earnings before interest, taxes, depreciation and amortization, LIFO expense and extraordinary items) in the third quarter were below last year, year-to-date EBITDA was $8.4 million above last year.
Selling, general and administrative expenses declined $8.7 million in the quarter and $18.7 million in the nine months, Ettore said.
Ames operates 306 discount department stores.
— Fairchild News Service