Sat Feb 11 2012
by Laura Freeman
Reporter
Hudson -- The second quarter earnings for Jo-Ann Stores Inc. are the best the fabrics and crafts store has seen in five years.
"Our results marked not only record earning performance, but also the first time in five years that we have generated positive earnings in the second quarter," said Darrell Webb, chairman and chief executive officer.
Based on the second quarter results, Jo-Ann Stores expects to see all its sales figures improve for the year, Webb said.
Jo-Ann Stores Inc. released its financial results Aug. 25 for its fiscal 2011 second quarter, which ended July 31.
Net income for the second quarter was $5.4 million, or 20 cents per diluted share, compared with a net loss of $3.2 million in last year's second quarter.
The net sales for the second quarter increased 4.7 percent, with $439.3 million compared to $419.4 million for the same period last year.
Same store sales increased 4.4 percents compared to a smaller increase of 1.8 percent for the second quarter last year.
Net sales for both large-format and small-format stores increased for the quarter at 3.9 percent and 3 percent.
Webb said new stores performed better than expected and remodeled stores had significant sales, which were strong in sewing machines, quilting and notions, food crafting, kid crafts and craft textiles.
Internet sales increased 16 percent to $8.7 million compared to the same quarter as last year. Webb said the website appears to fuel store visits.
Jo-Ann Stores has benefited from Wal-Mart removing fabric from 1,850 of its stores since 2006, Webb said.
In the past year, Jo-Ann Stores opened four large-format stores and 10 small-format stores and closed eight small-format stores.
For fiscal 2011, the company expects to open approximately 30 new stores and close about 25 stores. The company expects to remodel at least 40 stores during fiscal 2011.
Because of the strong performance in the second quarter, Webb said, Jo-Ann Stores will accelerate new store openings in fiscal 2012 with at least 50 new stores and the remodeling of at least 50 other stores.
Consumers still appear to be reluctant to purchase high price items, but the number of items purchased increased, Webb said.
Webb said he was concerned about higher shipping rates, which is factored into the remaining year's outlook. At least 50 percent of Christmas items have been shipped, but some items may have price increases due to the increase shipping costs.
E-mail: lfreeman@recordpub.com
Phone: 330-688-0088 ext. 3150
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