Hancock Fabrics looks for boost from holidays

Daily Journal

BALDWYN – The fourth quarter could be key for Hancock Fabrics.

Despite posting another loss in the third quarter, the company pointed to a strong Black Friday weekend in which sales were up nearly 13 percent compared to a year earlier.

That could be a good sign, as the company revamps some of its stores and improves its merchandise mix.

“As we move into the all-important fourth quarter, we remain confident about the holiday season based on our Black Friday weekend performance,” said company president and CEO Steve Morgan. “We believe we are well positioned with inventory in place to have a successful fourth quarter and carry the momentum into fiscal 2014.”

Hancock Fabrics improved its gross profit for a second consecutive quarter and its operating income also moved further into positive territory.

The fabrics and craft retailer also continued to narrow its losses, although its third-quarter results, released Tuesday, showed the company still in the red.

For the quarter ending Oct. 26, Hancock posted a net loss of $600,000, or 3 cents a share, compared to a loss of $2.2 million, or 11 cents a share, for the same period a year ago.

Sales for the quarter were relatively flat – $71.8 million versus $71.9 million.

However, the company did see comparable store sales – a key performance benchmark in retail – increase 1.1 percent. Gross profit improved to 41.6 percent.

Operating income was $800,000, compared to a $900,000 loss a year earlier.

For the fiscal year so far, the company’s net loss is $3.7 million, or 18 cents a share. The year-ago figures showed a loss of $8 million, or 40 cents a share.

Sales for the year were $194.7 million, compared to $196.3 million a year earlier.

Operating income for the year is $900,000, compared to a loss of $4.5 million in 2012. Gross profit rose to 43.9 percent.

During the third quarter, Hancock opened one new store, closed one store and relocated another. The company has 261 stores in 37 sates.