BURLINGTON COAT NET UP 3.3%
Byline: Evan Clark
NEW YORK — Hurt by unusually warm weather, Burlington Coat Factory Warehouse Corp. still managed a 3.3 percent increase in third-quarter profits, but struggled with double-digit decreases for the year to date.
Net income for the quarter of $37.3 million, or 84 cents a share, compared with year-ago earnings of $36.1 million, or 82 cents. Sales for the period ended March 2 ascended 7.5 percent to $787.5 million from $732.3 million a year ago, while comparable-store revenues dipped 0.4 percent.
Shares of the firm slid 62 cents, or 3.1 percent, to close at $19.13 on the New York Stock Exchange Friday.
A lower level of markdowns in the firm’s non-outerwear departments pumped up its gross margins by 58 basis points to 35.41 percent of sales. At the end of the quarter, inventory was 6 percent above year-ago levels, with comparable-store outerwear inventories up 27.9 percent due to the mild winter.
On a conference call Friday, executive vice president and general merchandise manager Stephen Milstein noted, “Eighty percent of outerwear styles are stable styles that are rebought year after year, and what I’ve learned is when the customer doesn’t want something, price will not move it.” About 70 percent of women’s outerwear styles carry over into the next year, he added.
“Right now, people are thinking spring, and we’re doing very well for spring. The bad styles we have marked down, and the replenishment styles that we’ll go back into next year will be held,” noted Milstein.
Milstein said juniors and young men’s have both been strong so far this spring.
He noted, “There are always opportunities out there. There’s not massive excess like we saw in the fall, but there are massive opportunities.”
Earnings for the nine months dropped 16.3 percent to $58 million, or $1.31 a share. This compared with year-ago profits of $69.3 million, or $1.56, which included an $815,000 extraordinary aftertax charge on the early extinguishment of debt. Without this item, earnings for the most-recent quarter were down 17.3 percent.
Sales ramped up 5.3 percent to $1.99 billion from $1.89 billion in the year-ago period, while comps slid 1.8 percent.
The Burlington, N.J.-based off-pricer operates 312 doors, accounting for 24.4 million square feet, in 42 states.