A NOT-SO-GOOD QUARTER FOR GOODY’S
Byline: Dan Burrows
NEW YORK — A changing retail environment, compounded by war, recession, warm winter weather and Sept. 11, plagued Goody’s Family Clothing Inc.’s sales and profits in the fourth quarter and fiscal year.
The Knoxville, Tenn.-based moderate retailer reported its toughest year ever ended with a fourth-quarter net loss of $7.7 million, or 24 cents a diluted share, compared with net income of $11.1 million, or 34 cents, in the year-ago period.
Sales for the 13 weeks ended Feb. 2 slumped 9.3 percent to $363.1 million from $400.3 million in last year’s 14-week quarter. Comparable-store sales dropped 8.7 percent.
In better news, the company did beat Wall Street forecasts by 11 cents.
In a conference call with analysts, chief executive officer Robert Goodfriend said last year marked “the first time in the company’s history that the company sustained a loss for the full year. As our sales and financial results clearly indicate, we have struggled as the retail environment has changed so dramatically.”
Goodfriend added that the company is poised for a turnaround in 2002 based on its strong balance sheet, good cash flow, absence of long-term debt, solid inventory and capital expenditures of $11 million. Moreover, Goody’s conducted a test advertising and marketing campaign that produced promising results.
“The results of the Goody’s Good Friend Bus tour were impressive,” said president Lana Krauter in a conference call with analysts. “Stores in the test ad campaign had comparable-store sales more than 5 percent better than those recorded in our other stores.”
Overall, in the 52-week fiscal 2001, Goody’s reported a net loss of $20.2 million, or 62 cents, against net income of $13.3 million, or 41 cents, in last year’s 53 weeks. That also beat Wall Street expectations of a 74-cent loss. Sales stumbled 4.6 percent to $1.19 billion from $1.25 billion in fiscal 2000. Same-store sales declined 8.5 percent.
Results for the more recent quarter and year include pretax costs aggregating to $1.3 million.