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Jo-Ann Q4 profit up despite higher raw material costs
11 Mar '11
5 min read
Large-format store net sales for the fiscal year ended January 29, 2011 increased 3.2% to $1.110 billion compared to the prior year. Same-store sales for large-format stores increased 1.9% compared with a 1.4% increase in the prior year. Small-format store net sales for the fiscal year increased 5.4% to $924.4 million compared to the prior year. Same-store sales for small-format stores increased 5.6% versus a 5.1% increase in the prior year. Internet sales through Joann.com for the fiscal year increased 17.4% to $44.5 million compared to the prior year.
Operating Results
Gross margins for the fourth quarter increased approximately 50 basis points to 48.1% compared to the same period last year primarily due to global sourcing efforts as well as improved inventory management.
Selling, general and administrative expenses ("SG&A") as a percentage of net sales increased approximately 60 basis points to 35.1%. SG&A expenses include pre-tax expenses of $3.2 million related to the pending acquisition. Excluding these expenses, SG&A as a percentage of net sales increased approximately 10 basis points for the fourth quarter versus the same period last year.
Operating profit for the fourth quarter was $64.3 million versus $61.1 million for the same period last year.
Balance Sheet
The cash balance of $214.8 million at the end of the fourth quarter decreased by $2.3 million compared to the end of the fourth quarter last year. The company had no debt outstanding at the end of the fourth quarter compared to $47.5 million of debt at the end of the fourth quarter last year. This $45.2 million improvement in cash, net of debt, was primarily the result of cash generated from operations.
Share Repurchase
During the fiscal year ended January 29, 2011, the company bought back approximately 1,735,000 shares of its common stock at an average price per share of $42.95.
Store Openings, Closings and Remodels
During the fourth quarter of fiscal 2011, the company opened one large-format and five small-format stores and closed 11 small-format stores. During fiscal year 2011, the company opened six large-format and 24 small-format stores and closed 25 small-format stores.
During the fourth quarter of fiscal 2011, the company remodeled three stores. During fiscal year 2011, the company remodeled 42 stores of which one was transitioned from a small-format to a large-format layout.
In fiscal 2012, as previously announced, the company is accelerating new store openings to be in the range of 55 to 60 stores and is planning to remodel approximately 60 stores.
Operating Results
Gross margins for the fourth quarter increased approximately 50 basis points to 48.1% compared to the same period last year primarily due to global sourcing efforts as well as improved inventory management.
Selling, general and administrative expenses ("SG&A") as a percentage of net sales increased approximately 60 basis points to 35.1%. SG&A expenses include pre-tax expenses of $3.2 million related to the pending acquisition. Excluding these expenses, SG&A as a percentage of net sales increased approximately 10 basis points for the fourth quarter versus the same period last year.
Operating profit for the fourth quarter was $64.3 million versus $61.1 million for the same period last year.
Balance Sheet
The cash balance of $214.8 million at the end of the fourth quarter decreased by $2.3 million compared to the end of the fourth quarter last year. The company had no debt outstanding at the end of the fourth quarter compared to $47.5 million of debt at the end of the fourth quarter last year. This $45.2 million improvement in cash, net of debt, was primarily the result of cash generated from operations.
Share Repurchase
During the fiscal year ended January 29, 2011, the company bought back approximately 1,735,000 shares of its common stock at an average price per share of $42.95.
Store Openings, Closings and Remodels
During the fourth quarter of fiscal 2011, the company opened one large-format and five small-format stores and closed 11 small-format stores. During fiscal year 2011, the company opened six large-format and 24 small-format stores and closed 25 small-format stores.
During the fourth quarter of fiscal 2011, the company remodeled three stores. During fiscal year 2011, the company remodeled 42 stores of which one was transitioned from a small-format to a large-format layout.
In fiscal 2012, as previously announced, the company is accelerating new store openings to be in the range of 55 to 60 stores and is planning to remodel approximately 60 stores.
Jo-Ann Stores Inc
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