Openings, comps push 4Q higher
Playthings Staff -- Gifts & Dec, February 10, 2003
Rolling out new units at a rapid clip, and at the same time building same-store sales, home furnishings big box Linens 'n Things pushed fourth-quarter earnings before one-time items up by 26.0 percent, to $40.2 million.
Sales jumped up by 23.0 percent on the strength of aggressive expansion, to $723.3 million from $587.9 million last year. Same-store sales expanded by 4.0 percent, continuing a rebound from weakness last year, and built on a 1.8 percent increase during the third quarter.
Overall profits rose by almost 400 percent, to $40.2 million from $8.2 million last year, but only because last year's bottom line was weighed down by a $23.7 million after-tax charge to cover restructuring and store closing costs.
The number that Wall Street watches carefully, fully diluted earnings per share before one-time items, rose by 15.4 percent, to $0.90 from $0.78.
For the first quarter, Axelrod forecast overall sales to rise by 10 percent to 13 percent, with same-store sales moving up in the low single digits.
First-quarter earnings are expected in the range of 10 to 12 cents per share, blunted by 3 cents per-share charge the company will take in connection with last week's resignation of president Steve Silverstein.
Firming up the bottom line during the all-important Christmas quarter, LNT widened its average gross margin by 70 basis points, to 41.4 percent form 40.7 percent a year ago. Gross margin dollars increased by 25.0 percent, to $299.3 million from $239.4 million. Operating costs were whittled down slightly, by 10 basis points, to 32.3 percent of sales from 32.4 percent a year ago. In another strong assist to profits, the retailer slashed its interest expense by 61.8 percent, to $408,000 from $1.1 million, generating a cash savings of $660,000.
Linens 'n Things Inc.
|Qtr. 1/4 (x000)||2002||2001||% change|
|a-Earnings in the prior-year fourth quarter were reduced by a $23.7 million after-tax restructuring charge. Excluding the one-time item, net income rose by 26 percent, and fully diluted earnings per shore increased by 15.4 percent.
b-Earnings for all of 2001 were reduced by the $23.7 million after-tax restructuring charge and a $4 million litigation charge stemming from employee lawsuits. Excluding the one-time items, full-year net income in 2002 rose by 24 percent, and fully diluted earnings per share increased by 17.6 percent.
|Oper. income (EBIT)||65,503||48,884||34.0|
|Per share (diluted)||0.90a||0.20a||350.0|
|Average gross margin||41.4%||40.7%||—|
|Oper. income (EBIT)||114,269||90,486||26.3|
|Per share (diluted)||1.60b||1.72b||122.2|
|Average gross margin||41.0%||40.7%||—|
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