Tuesday Morning Q4 Loss Narrows, But Results Miss View

(RTTNews) - Home accessories and housewares retailer Tuesday Morning Corp. (TUES) on Thursday reported a loss for the fourth quarter that narrowed from last year on higher sales and lower expenses.

Excluding business turnaround charges, adjusted loss for the quarter also narrowed, but came in wider than analysts' expectations, while revenues missed their estimates.

Michael Rouleau, Chief Executive Officer of Tuesday Morning, said, "During the fourth quarter, we continued work on the final phase of the Company's turnaround program which includes the sell-off of exited categories, expansion of replacement categories, a further reduction of our clearance merchandise, and enhancements to our store layouts."

The Dallas, Texas-based company's fourth-quarter net loss was $7.41 million or $0.17 per share, narrower than loss of $15.58 million or $0.37 per share in the comparable quarter last year.

The latest quarter's results include, among others, inventory write-down and merchandise category exit costs of $2.51 million, store reorganization expenses of $714 thousand and deferred tax asset valuation allowance of $1.22 million.

Adjusted net loss for the quarter was $3.39 million or $0.08 per share, compared to adjusted net loss of $5.44 million or $0.13 per share in the year-ago period. On average, five analysts polled by Thomson Reuters expected the company to report loss of $0.07 per share. Analysts' estimates typically exclude special items.

Net sales for the quarter rose 5 percent to $212.63 million from $202.13 million in the year-ago period. Analysts had a consensus revenue estimate of $213.11 million for the quarter.

Comparable store sales increased by 7.4 percent compared to the same period a year ago, and were comprised of a 9.8 percent increase in customer transactions. This was partially offset by a 2.1 percent decrease in average ticket.

Since the second quarter of fiscal 2013, the company has exited a number of non-core categories. Comparable sales in ongoing core categories for the quarter increased 12.9 percent, compared to the year-ago period.

Goss margin for the quarter expanded 50 basis points to 33.5 percent.

Selling, general and administrative expenses declined less than 1 percent from last year to $77.53 million. Other expense, net, for the quarter declined to $1.05 million from $4.27 million a year ago.

For fiscal 2014, Tuesday Morning's net loss narrowed to $10.18 million or $0.24 per share from $56.38 million or $1.33 per share last year.

Adjusted net income for the year was $333 thousand or $0.01 per share, compared to adjusted net loss of $841 thousand or $0.02 per share in the previous year.

Net sales for the year increased 3 percent to $864.84 million from $838.31 million in the prior year.

Street expected the company to report earnings of $0.01 per share for the year on revenues of $866.19 million.

Comparable store sales for the year increased by 6.1 percent compared to the same period last year, and were comprised of a 9.5 percent increase in customer transactions. This was partially offset by a 3.1 percent decrease in average ticket.

Comparable sales for the company's ongoing core categories increased 12.3 percent for the year compared to last year.

Rouleau said, "Looking forward, we have high expectations for very successful fall and holiday seasons and, over the longer term, expect to continue to improve our sales productivity and bottom line profitability."

TUES closed Thursday's regular trading session at $17.09, down $0.72 or 4.04 percent on a volume of 1.08 million shares. In after-hours, the stock gained $0.31 or 1.81 percent to $17.40.