Tim Hayes.
April 22nd, 2006, 02:07 PM
Last paragraph.
A.C. Moore Q1 Sales Up 8%
April 21, 2006
By Eric Peterson
BERLIN, NJ-A.C. Moore Arts & Crafts Inc. enjoyed an 8.2% sales increase for Q1 2006 ended March 31, with the final number coming it at $132.9 million compared to ’05’s $122.9 million. However, net income for the period was $136,000, or just $0.01 per diluted share, compared with $1.3 million and $0.06 one year earlier. Company officials also reported yesterday that same store sales were off by 1.8%.
A.C. Moore officials blame the company’s struggling yarn business for the fall-off in profits and same store sales. Noting that the final numbers were in line with earnings estimates, president and COO Lawrence Fine told analysts that, “we expected Q1 sales to be very challenging and impacted by the decline in our yarn business. In fact, we did lose $8.2 million, or 45% in comp store yarn sales during Q1.
“However, the most encouraging news is the rest of the store was up almost 6% on a comp store basis,” Fine said during yesterday’s conference call. “Our best performing department were basic crafts, seasonal and jewelry making. As we move into Q2 and the rest of the year, yarn sales will have a much smaller impact on our total business,” he added, noting that in 2005, Q1 yarn sales were 15.1% of the company’s total business, a figure that dropped to just 6.6% in Q2 as the weather got warmer.
Among other numbers released yesterday by CFO Leslie Gordon: Q1 net income included a net of tax expense amounting to $555,000, or $0.03 per diluted share, for stock-based compensation. Also, the customer count was down .7%, the average ticket was down 1.1% and the gross margin was 40%, “up 80 basis points from 2005.” The company opened four new stores during the period, including its second in Florida, and it will be opening its third Florida store in Q2
Besides the struggling yarn business, the 113-store chain’s sales in the February/March period were negatively impacted by the blizzard in February and the fact that Easter occurred in April this year rather than March, Fine pointed out. “But we feel we will achieve our sales plan for the balance of the year. Many of the merchandising resets we did last year are showing positive effects. The changes we made provided the foundation for improved merchandise adjacencies and departmental flow.”
Fine also announced that the custom framing business in 25 of the company’s stores, currently leased to an outside company, “will be managed and operated by A.C. Moore as of July 1, 2006. We are very excited by our entry into the framing business, and we expect to see significant sales and margin increases. We will also add custom frame shops in at least another 12 stores, including new stores, this year, and in the first four months of 2007 we are looking to add shops in an additional 24 to 30 stores.
A.C. Moore Q1 Sales Up 8%
April 21, 2006
By Eric Peterson
BERLIN, NJ-A.C. Moore Arts & Crafts Inc. enjoyed an 8.2% sales increase for Q1 2006 ended March 31, with the final number coming it at $132.9 million compared to ’05’s $122.9 million. However, net income for the period was $136,000, or just $0.01 per diluted share, compared with $1.3 million and $0.06 one year earlier. Company officials also reported yesterday that same store sales were off by 1.8%.
A.C. Moore officials blame the company’s struggling yarn business for the fall-off in profits and same store sales. Noting that the final numbers were in line with earnings estimates, president and COO Lawrence Fine told analysts that, “we expected Q1 sales to be very challenging and impacted by the decline in our yarn business. In fact, we did lose $8.2 million, or 45% in comp store yarn sales during Q1.
“However, the most encouraging news is the rest of the store was up almost 6% on a comp store basis,” Fine said during yesterday’s conference call. “Our best performing department were basic crafts, seasonal and jewelry making. As we move into Q2 and the rest of the year, yarn sales will have a much smaller impact on our total business,” he added, noting that in 2005, Q1 yarn sales were 15.1% of the company’s total business, a figure that dropped to just 6.6% in Q2 as the weather got warmer.
Among other numbers released yesterday by CFO Leslie Gordon: Q1 net income included a net of tax expense amounting to $555,000, or $0.03 per diluted share, for stock-based compensation. Also, the customer count was down .7%, the average ticket was down 1.1% and the gross margin was 40%, “up 80 basis points from 2005.” The company opened four new stores during the period, including its second in Florida, and it will be opening its third Florida store in Q2
Besides the struggling yarn business, the 113-store chain’s sales in the February/March period were negatively impacted by the blizzard in February and the fact that Easter occurred in April this year rather than March, Fine pointed out. “But we feel we will achieve our sales plan for the balance of the year. Many of the merchandising resets we did last year are showing positive effects. The changes we made provided the foundation for improved merchandise adjacencies and departmental flow.”
Fine also announced that the custom framing business in 25 of the company’s stores, currently leased to an outside company, “will be managed and operated by A.C. Moore as of July 1, 2006. We are very excited by our entry into the framing business, and we expect to see significant sales and margin increases. We will also add custom frame shops in at least another 12 stores, including new stores, this year, and in the first four months of 2007 we are looking to add shops in an additional 24 to 30 stores.