Jo-Ann accelerating new store openings in fiscal 2012

30 Aug '10

5 min read

Jo-Ann Stores, Inc. announced financial results for its fiscal 2011 second quarter ended July 31, 2010. Net income for the second quarter was $5.4 million, or $0.20 per diluted share, compared with a net loss of $3.2 million, or ($0.13) per diluted share, for the second quarter last year.

Net sales for the second quarter increased 4.7% to $439.3 million from $419.4 million for the same period last year. Same-store sales increased 4.4% compared with a 1.8% same-store sales increase for the second quarter last year.

Large-format store net sales for the quarter increased 3.9% to $238.2 million compared to the same period last year. Same-store sales for large-format stores increased 3.0% compared with an increase of 0.1% in the second quarter last year. Small-format store net sales for the quarter increased 5.4% to $192.4 million compared to the same period last year. Same-store sales for small-format stores increased 6.2% compared with an increase of 3.9% in the second quarter last year. Internet sales through Joann.com increased 16.0% to $8.7 million for the quarter compared to the same period last year.

Darrell Webb, chairman and chief executive officer stated, "Our results marked not only record earnings performance but also the first time in five years that we have generated positive earnings in the second quarter. These results were driven by better than expected performance from our new stores, significant sales lift from our remodels and successful new product assortments."

Webb concluded, "Given our solid balance sheet and cash position, we are excited to announce an acceleration of our new store openings for fiscal year 2012. We remain committed to executing our strategic initiatives and expect to deliver balanced and sustainable improvement in our results in the future."

Net sales for the six-month period ended July 31, 2010 increased 4.6% to $919.6 million versus $879.4 million in the prior year. Same-store sales increased 4.2% for the six-month period compared with a 1.4% increase in the prior year.

Large-format store net sales for the six-month period increased 3.9% to $496.1 million compared to the prior year. Same-store sales for large-format stores increased 2.4%, versus a 0.2% decrease in the prior year. Small-format store net sales for the six-month period increased 5.1% to $404.5 million compared to the prior year. Same-store sales performance for small-format stores increased 6.6% versus a 3.4% increase in the prior year. Internet sales through Joann.com for the six-month period increased 11.8% to $19.0 million compared to the prior year.

Operating Results
Gross margins for the second quarter increased approximately 120 basis points to 50.5% compared to the same period last year primarily due to global sourcing efforts as well as improved inventory management.

Selling, general and administrative expenses for the quarter increased 0.6% to $194.5 million compared to the same period last year. Selling, general and administrative expenses as a percentage of net sales improved by approximately 180 basis points to 44.3% compared to the same period last year due to expense leverage from the increase in sales as well as continued efforts to control expenses.

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