YOUNKERS’S NET OFF 44.2 PERCENT IN THIRD QUARTER
NEW YORK — Younkers reported third-quarter earnings plunged 44.2 percent on a 4 percent decline in sales, blaming the poor performance on unseasonably warm weather.
The department store chain said profits in the quarter ended Oct. 29 were $2.6 million, or 28 cents a share, down from $4.6 million, or 50 cents, a year ago. Sales eased to $146.3 million from $152.4 million.
All of the regional chain’s 53 stores have been open at least a year, so its comparable-store sales are identical to the overall results.
Alan Raxter, Younkers’ chief financial officer, told WWD it had not heard from Carson Pirie & Scott since Nov. 8, when Carson stated it would continue pursuing a takeover attempt. So far, Carson’s has come up with one offer, on Oct. 27, for $17 a share in cash.
Soft sales of higher margin goods, such as wool sweaters and coats, put pressure on Younkers’ gross margins, which skidded to 35.3 percent in the quarter, from 36.7 percent. For the nine months, gross margin decreased to 35.7 percent from 36.8 percent.
As of Oct. 29, Younkers’ inventory stood at $147.7 million, which was above plan due to the sales shortfall in the quarter, but was still 5 percent below year-earlier levels.
“I don’t see the inventory level having a dramatic impact on our fourth quarter. The main thing driving [department store] sales today is price,” said Raxter, predicting the industry’s fourth quarter will be more promotional than in the past.
Younkers’ net income for the nine months fell 13 percent to $3.7 million, or 40 cents, from $4.2 million, or 51 cents. Sales in the period were off 3.6 percent, totaling $397.2 million against $412 million.
Nevertheless, Philip Abbenhaus, an analyst at Stifel Nicolaus, St. Louis, remains optimistic about the firm’s fourth-quarter prospects, saying, “They can still earn $1 in the fourth quarter if they get favorable weather, so they can still earn $1.40 per share for the year.”
In fiscal 1993, Younkers’ earnings per share were $1.55.