05/01/2024 | Press release | Distributed by Public on 05/01/2024 14:30
•
|
Diluted earnings per common share ("EPS") of $0.14 versus $0.74.
|
•
|
Consolidated sales decreased 18.1% to $184.0 million. Comparable-store sales decreased 18.5%.
|
•
|
Gross profit margin increased to 60.3% from 59.1%.
|
Results of Operations
|
||||||||
Three Months Ended March 31,
|
||||||||
2024
|
2023
|
|||||||
Sales
|
$
|
184.0
|
$
|
224.8
|
||||
Gross Profit
|
111.0
|
132.8
|
||||||
Gross profit as a % of sales
|
60.3
|
%
|
59.1
|
%
|
||||
SGA
|
||||||||
Variable
|
37.0
|
44.9
|
||||||
Fixed
|
72.4
|
73.5
|
||||||
Total
|
109.4
|
118.4
|
||||||
SGA as a % of sales
|
||||||||
Variable
|
20.1
|
%
|
20.0
|
%
|
||||
Fixed
|
39.3
|
%
|
32.7
|
%
|
||||
Total
|
59.4
|
%
|
52.7
|
%
|
||||
Pre-tax income
|
3.2
|
15.4
|
||||||
Pre-tax income as a % of sales
|
1.7
|
%
|
6.9
|
%
|
||||
Net income
|
2.4
|
12.4
|
||||||
Net income as a % of sales
|
1.3
|
%
|
5.5
|
%
|
||||
Diluted earnings per share ("EPS")
|
$
|
0.14
|
$
|
0.74
|
Other Financial and Operations Data
|
||||||||
Three Months Ended March 31,
|
||||||||
2024
|
2023
|
|||||||
EBITDA (in millions)(1)
|
$
|
6.6
|
$
|
18.8
|
||||
Sales per square foot
|
$
|
169
|
$
|
208
|
||||
Average ticket
|
$
|
3,208
|
$
|
3,192
|
Liquidity Measures
|
|||||||||||||||||
Three Months Ended March 31,
|
Three Months Ended March 31,
|
||||||||||||||||
Free Cash Flow
|
2024
|
2023
|
Cash Returns to Shareholders
|
2024
|
2023
|
||||||||||||
Operating cash flow
|
$
|
3.1
|
$
|
11.1
|
Share repurchases
|
$
|
-
|
$
|
-
|
||||||||
Dividends
|
4.8
|
4.5
|
|||||||||||||||
Capital expenditures
|
(6.4
|
)
|
(6.7
|
)
|
Cash returns to shareholders
|
$
|
4.8
|
$
|
4.5
|
||||||||
Free cash flow
|
$
|
(3.3
|
)
|
$
|
4.4
|
||||||||||||
Cash at period end
|
$
|
117.9
|
$
|
127.0
|
(1)
|
See the reconciliation of the non-GAAP metrics at the end of the release.
|
•
|
Total sales down 18.1%, comp-store sales down 18.5% for the quarter. Total written sales were down 12.6% and written comp-store sales declined 13.0% for the quarter.
|
•
|
Gross profit margins increased to 60.3% in 2024 from 59.1% in 2023.
|
•
|
SG&A expenses were 59.4% of sales versus 52.7% and decreased $9.0 million. The primary drivers of this change are:
|
◦
|
decrease of $4.8 million in selling expenses, primarily variable costs tied to commissioned-based compensation expense and third-party creditor costs.
|
◦
|
decrease in warehouse and delivery costs of $3.2 million primarily from reduced headcount via attrition and lower expenditures for supplies and fuel.
|
◦
|
decrease of $0.6 million in advertising expenses driven by reduced spending on television and interactive marketing partly offset by increased technology costs.
|
•
|
Cash, cash equivalents, and restricted cash equivalents at March 31, 2024 are $117.9 million.
|
•
|
Generated $3.1 million in cash from operating activities primarily from earnings and changes in working capital including a $5.1 million increase in customer deposits, a $1.9 million reduction in inventories, and a $12.8 million decrease in vendor repayments and accrued liabilities.
|
•
|
Invested $6.4 million in capital expenditures.
|
•
|
Paid $4.8 million in quarterly cash dividends.
|
•
|
No debt outstanding at March 31, 2024 and credit availability of $80.0 million.
|
•
|
We are increasing our expectations for gross profit margins for 2024 to be between 60.0% to 60.5%. The adjustment is based on our merchandising mix and anticipated changes in product and freight costs. Gross profit margins fluctuate quarter to quarter in relation to our promotional cadence.
|
•
|
Fixed and discretionary expenses within SG&A for the full year of 2024 are expected to be in the $290.0 to $292.0 million range, a reduction in our previous guidance related to advertising and other costs. Variable SG&A expenses for the full year of 2024 are anticipated to be in the 19.9% to 20.2% range.
|
•
|
Our effective tax rate for 2024 is expected to be 26.5% excluding the impact from discrete items and any new tax legislation.
|
•
|
Planned capital expenditures for the full year of 2024 are approximately $32.0 million. We expect retail square footage will increase approximately 3.4% in 2024 over 2023.
|
|
|
|
Three Months Ended
March 31, |
|||||||
(In thousands, except per share data)
|
2024
|
2023
|
||||||
Net sales
|
$
|
183,997
|
$
|
224,754
|
||||
Cost of goods sold
|
72,978
|
91,969
|
||||||
Gross profit
|
111,019
|
132,785
|
||||||
Expenses:
|
||||||||
Selling, general and administrative
|
109,356
|
118,361
|
||||||
Other expense (income), net
|
23
|
(4
|
)
|
|||||
Total expenses
|
109,379
|
118,357
|
||||||
Income before interest and income taxes
|
1,640
|
14,428
|
||||||
Interest income, net
|
1,555
|
1,010
|
||||||
Income before income taxes
|
3,195
|
15,438
|
||||||
Income tax expense
|
802
|
3,066
|
||||||
Net income
|
$
|
2,393
|
$
|
12,372
|
||||
Basic earnings per share:
|
||||||||
Common Stock
|
$
|
0.15
|
$
|
0.77
|
||||
Class A Common Stock
|
$
|
0.13
|
$
|
0.72
|
||||
Diluted earnings per share:
|
||||||||
Common Stock
|
$
|
0.14
|
$
|
0.74
|
||||
Class A Common Stock
|
$
|
0.13
|
$
|
0.71
|
||||
Cash dividends per share:
|
||||||||
Common Stock
|
$
|
0.30
|
$
|
0.28
|
||||
Class A Common Stock
|
$
|
0.28
|
$
|
0.26
|
(In thousands)
|
March 31,
2024 |
December 31,
2023 |
March 31,
2023 |
|||||||||
Assets
|
||||||||||||
Current assets
|
||||||||||||
Cash and cash equivalents
|
$
|
111,818
|
$
|
120,635
|
$
|
120,170
|
||||||
Restricted cash and cash equivalents
|
6,045
|
7,142
|
6,876
|
|||||||||
Inventories
|
92,078
|
93,956
|
114,254
|
|||||||||
Prepaid expenses
|
17,361
|
17,067
|
11,430
|
|||||||||
Other current assets
|
13,697
|
12,793
|
19,590
|
|||||||||
Total current assets
|
240,999
|
251,593
|
272,320
|
|||||||||
Property and equipment, net
|
173,128
|
171,588
|
139,212
|
|||||||||
Right-of-use lease assets
|
196,976
|
202,306
|
207,673
|
|||||||||
Deferred income taxes
|
15,594
|
15,641
|
16,332
|
|||||||||
Other assets
|
13,832
|
13,005
|
12,878
|
|||||||||
Total assets
|
$
|
640,529
|
$
|
654,133
|
$
|
648,415
|
||||||
Liabilities and Stockholders' Equity
|
||||||||||||
Current liabilities
|
||||||||||||
Accounts payable
|
$
|
16,980
|
$
|
18,781
|
$
|
15,632
|
||||||
Customer deposits
|
40,912
|
35,837
|
46,382
|
|||||||||
Accrued liabilities
|
35,681
|
46,289
|
40,372
|
|||||||||
Current lease liabilities
|
37,572
|
37,357
|
36,180
|
|||||||||
Total current liabilities
|
131,145
|
138,264
|
138,566
|
|||||||||
Noncurrent lease liabilities
|
174,680
|
180,397
|
185,866
|
|||||||||
Other liabilities
|
28,014
|
27,106
|
27,571
|
|||||||||
Total liabilities
|
333,839
|
345,767
|
352,003
|
|||||||||
Stockholders' equity
|
306,690
|
308,366
|
296,412
|
|||||||||
Total liabilities and stockholders' equity
|
$
|
640,529
|
$
|
654,133
|
$
|
648,415
|
(In thousands)
|
Three Months Ended
March 31, |
|||||||
2024
|
2023
|
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net income
|
$
|
2,393
|
$
|
12,372
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
4,946
|
4,362
|
||||||
Share-based compensation expense
|
2,643
|
1,957
|
||||||
Other
|
58
|
(840
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Inventories
|
1,878
|
4,079
|
||||||
Customer deposits
|
5,075
|
(1,587
|
)
|
|||||
Other assets and liabilities
|
(1,104
|
)
|
5,721
|
|||||
Accounts payable and accrued liabilities
|
(12,754
|
)
|
(14,990
|
)
|
||||
Net cash provided by operating activities
|
3,135
|
11,074
|
||||||
Cash Flows from Investing Activities:
|
||||||||
Capital expenditures
|
(6,399
|
)
|
(6,655
|
)
|
||||
Proceeds from sale of land, property and equipment
|
48
|
13
|
||||||
Net cash used in investing activities
|
(6,351
|
)
|
(6,642
|
)
|
||||
Cash Flows from Financing Activities:
|
||||||||
Dividends paid
|
(4,845
|
)
|
(4,528
|
)
|
||||
Taxes on vested restricted shares
|
(1,853
|
)
|
(2,788
|
)
|
||||
Net cash used in financing activities
|
(6,698
|
)
|
(7,316
|
)
|
||||
Decrease in cash, cash equivalents and restricted cash equivalents during the period
|
(9,914
|
)
|
(2,884
|
)
|
||||
Cash, cash equivalents and restricted cash equivalents at beginning of period
|
127,777
|
129,930
|
||||||
Cash, cash equivalents and restricted cash equivalents at end of period
|
$
|
117,863
|
$
|
127,046
|
Three Months Ended March 31,
|
||||||||
(in thousands)
|
2024
|
2023
|
||||||
Income before income taxes, as reported
|
$
|
3,195
|
$
|
15,438
|
||||
Interest income, net
|
(1,555
|
)
|
(1,010
|
)
|
||||
Depreciation
|
4,946
|
4,362
|
||||||
EBITDA
|
$
|
6,586
|
$
|
18,790
|