ELDER-BEERMAN PERIOD NET OFF 26.6%
NEW YORK — The Elder-Beerman Stores Corp. said earnings slumped 26.6 percent in the fourth quarter, dragged down by a $4.6 million charge to write down an investment in a cooperative buying group.
The Dayton, Ohio-firm, which operates 60 department stores, earned $17.5 million, or $1.20 a share, down from $23.8 million, or $1.51, a year ago.
Beerman said that excluding special items and applying a normalized tax rate of 38 percent, earnings inched ahead 2.8 percent to $11.1 million, or 76 cents a share, from $10.8 million, or 69 cents, a year ago. Results topped Wall Street’s consensus estimate of 75 cents.
Beerman also noted that year-ago results were boosted by a $6.5 million pretax LIFO inventory credit. Sales advanced 5.4 percent to $228.2 million, with same-store sales at its department stores ahead 2.8 percent.
Frederick J. Mershad, chairman and chief executive, said the fourth quarter and year were in line with plans the firm had for “modest growth” given its 23 percent square-footage increase in 1998.
He said the firm successfully tested a prototype — including centralized cash-wrap service centers, a combined juniors and young men’s area called Zone and self-select cosmetics and shoe departments — in two stores and are opening two more under this concept in the fall.
“We expect a 3 percent comparable-store sales increase in 2000, and we expect pretax income to increase by approximately 10 percent,” said Mershad. “We expect to incorporate one aspect of the new stores — centralized cash-wrap service centers — into at least half of our stores this year, with the remainder of our stores converted in 2001. We are also planning to expand our test-marketing of the ‘Zone’ concept, a combined juniors’ and young men’s department, into three stores in the Dayton area this year. The Zone has performed well in our concept stores.”
In the full year, profits slumped 40 percent to $15.3 million, or 99 cents, from $25.5 million, or $1.76. Excluding special items and using a normal tax rate, earnings slid to $10.7 million, or 70 cents, from $14.2 million, or 98 cents, a year ago, Beerman said. Sales gained 9.3 percent to $667.1 million.