Home / Knowledge / News / Textiles / Eddie Bauer reports improvement in Full Year EBITDA
Eddie Bauer reports improvement in Full Year EBITDA
29
Jan '09
Eddie Bauer Holdings Inc reported preliminary comparable store sales and estimated adjusted EBITDA for the fourth quarter and full year. The Company is taking the step of releasing its estimated fourth quarter and full year adjusted EBITDA early because it is a key component of the Company's loan covenants. The Company also announced that SG&A expense for the year is expected to be down by $45 to $50 million, well ahead of its previously announced target.

For fiscal 2008, the Company estimates that adjusted EBITDA will be in the range of $50 to $55 million, an increase of $8 to $13 million from the prior year. Estimated fourth quarter adjusted EBITDA will be in the range of $53 to $58 million, a decrease of $2 to $7 million from fourth quarter 2007. The estimated EBITDA presented is adjusted for certain non-recurring and nonoperational items.

"The retail environment in the fourth quarter was brutal, the worst in decades," said Neil Fiske, President and Chief Executive Officer. "In spite of the recession in 2008, we managed to improve our year-over-year adjusted EBITDA and cash flow. Our sales were soft, but much of the market fared worse. Our turnaround program continues to show results, even in a tough environment."

Preliminary combined comparable store sales fell 5.7% for the quarter and 1.1% for the fiscal year when excluding the effect of foreign exchange rates resulting from the sharp fall in the Canadian dollar.

Comparable store sales for both the fourth quarter and fiscal 2007 have been calculated to include the addition of the first week of fiscal 2008, to make 2007 (a 52-week year) comparable to fiscal 2008, which is a 53-week fiscal year.

Preliminary net merchandise sales for the fourth quarter declined 5.7% and for the full-year net merchandise sales for 2008 declined 1.8%, driven by a small decline in comparable store sales and a smaller store base. Comparisons for net merchandise sales are between fiscal years and are not adjusted for a 52 or 53 week period. The Company ended the year with 16 fewer retail stores and one more outlet store than at year-end 2007. Merchandise margins for the fourth quarter and year were lower due to the high level of promotional activity in the market.

Inventories at quarter-end were down approximately 13.8% in total and approximately 8.2% on a per store basis. Inventory percentages have not been adjusted for Canadian currency fluctuations or the 53rd week.

At year-end, cash balances were $60.4 million. There were no short-term borrowings outstanding and the balance outstanding under the senior term loan was $192.8 million at the end of the year. As of the end of the fourth quarter of 2008, the Company was in compliance with all its loan covenants. The Company will be closely monitoring covenants in the first quarter of 2009. The Company will explore possible modifications to its current debt terms and has engaged the investment banking firm of Peter J. Solomon Company to assist in this process.

Selling, general, and administrative expenses (SG&A), excluding non- recurring costs and the impact of the 53rd week in 2008, are estimated to be down $45 to $50 million for the year. This exceeded the upper end of the Company's stated target of $25-30 million in SG&A reduction, and is primarily due to substantial savings from lower revenue-related expenses and better cost management. The Company benefited from substantial savings in revenue-related expenses.

The Company is taking further aggressive action to manage its cost structure and expenditures in 2009 in the face of the continuing economic downturn, including:

-- Setting a target for an additional $10-15 million reduction in year over year SG&A costs, excluding non-recurring items and the impact of the 53rd week in 2008;
-- Limiting net capital spending to approximately $15 million;
-- Freezing salaries;
-- Adjusting certain benefits programs;
-- Cutting the size of its Board of Directors and reducing total Board costs by 40-50%, including approximately $0.5 million per year in cash payments; and
-- Accelerating product innovation and new launches.

Eddie Bauer


Must ReadView All

Textiles | On 19th Aug 2017

New fabric interfaces to interact with computers

As computer capabilities evolve, new fabric-based interfaces are...

Textiles | On 19th Aug 2017

Brazilian cotton prices drop in first fortnight of August

Cotton prices dropped in the Brazilian market in the first fortnight...

Apparel/Garments | On 19th Aug 2017

Target to acquire Grand Junction for faster deliveries

Target Corporation has announced that it has agreed to acquire Grand...

Interviews View All

Headhonchos
Indian textile value chain

Adopt innovative techniques, go for automisation rather than being...

Karan Toshniwal
Orange O Tec

Contemporary industry is paying more and more attention to the...

Top executives
Textile industry

The foremost issue is bridging the skill gap

Paolo Ocleppo
Sandvik Hyperion

Paolo Ocleppo, Rotary Cutting Segment manager, Sandvik Hyperion discusses...

Larry L Kinn
Suominen Corporation

Larry L Kinn, Senior Vice President - Operations Americas of Suominen...

Marten Alkhagen
Swerea IVF AB

Marten Alkhagen, Senior Scientist - Nonwoven and Technical Textiles of...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Sanjukta Dutta
Sanjukta's Studio

<b>Sanjukta Dutta</b> creates unique garments by clubbing prints of...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

August 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Active Poll

Do you see sustainability as a route to business growth?

Yes
66.7%
No
16.7%
Skip
16.7%

Total Votes: 30

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Active Poll

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes
43.3%
No
36.7%
Skip
20.0%

Total Votes: 30

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Active Poll

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes
83.3%
No
6.7%
Skip
10.0%

Total Votes: 30

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

Active Poll

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes
60.0%
No
10.0%
Skip
30.0%

Total Votes: 30


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search