Jo-Ann Stores delivers solid operating results
Jo-Ann Stores Inc announced financial results for its fiscal 2010 first quarter ended May 2, 2009. Net income for the first quarter of fiscal 2010 was $8.6 million, or $0.33 per diluted share, compared with net income of $3.0 million, or $0.12 per diluted share for the first quarter last year. The current quarter net income includes a $0.7 million after-tax gain, or $0.03 per diluted share, related to the purchase of a portion of the company's senior subordinated notes. Excluding this gain, net income for the first quarter was $7.9 million, or $0.30 per diluted share.
Net sales for the first quarter increased 3.1% to $460.0 million from $446.1 million for the same period last year. Same-store sales increased 1.0% compared with a 4.5% same-store sales increase for the first quarter last year.
Large-format store net sales for the quarter increased 5.8% to $244.1 million compared to the same period last year. Same-store sales for large-format stores decreased 0.6% compared with an increase of 3.3% in last year's first quarter. Small-format store net sales decreased 0.3% to $206.4 million compared to the same period last year. Same-store sales for small-format stores increased 3.0% compared with an increase of 5.8% for the same period last year. Internet sales through Joann.com were $9.5 million in the first quarter of fiscal 2010 compared to $8.2 million for the same period last year.
Darrell Webb, chairman, president and chief executive officer stated, “During the first quarter of fiscal 2010, Jo-Ann Stores delivered solid operating results as we grew sales, expanded margins, improved earnings, and continued to reduce our debt. As the challenging economy persists, Jo-Ann's product offering is resonating with consumers seeking affordable, family-oriented activities. I am pleased with the growth we are seeing in our core sewing and craft categories, while seasonal and high ticket product sales continue to be challenging.”
“We are benefiting from our sharp focus on controlling costs and generating operating efficiencies and we expect to further leverage these improvements as the economy rebounds. I am pleased with our strong start to the year, but we still have the majority of the year ahead of us and limited visibility into the timing of a sustained retail recovery,” Webb concluded.
Gross margins for the first quarter increased approximately 210 basis points to 48.5% from 46.4% in the first quarter of the prior year due to reduced product costs from global sourcing initiatives, lower clearance levels and reduced freight costs.
Selling, general and administrative expenses for the quarter increased to $190.4 million from $184.5 million for the same period last year. Selling, general and administrative expenses as a percentage of net sales remained flat at 41.4% as the company continues to manage operating costs.
Operating profit for the first quarter was$14.9 million versus $7.4 million for the prior year's first quarter.