Hancock Fabrics losses narrow as sales rise

By Dennis Seid/NEMS Daily Journal

BALDWYN – Hancock Fabrics saw its sales improve and narrowed its losses for the fourth quarter and its fiscal year, the company said Friday.
For the quarter ended Jan. 26, the Baldywn-based craft and fabric retailer reported net sales of $81.7 million, marginally higher than the $81.4 million logged a year earlier. Comparable-store sales – sales of stores open at least a year, a key retail figure – increased 1.4 percent. Hancock did post a loss for the quarter of $600,000, or 3 cents a share.
However, that compares to the year-ago quarterly loss of $5.2 million, or 26 cents a share.
For the full fiscal year, sales rose 2.2 percent to $278 million – its best showing in at least seven years.
Comparable store sales for the year increased 2.9 percent, a reversal of the 0.8 percent loss in fiscal 2011.
Internet sales for the company increased 8 percent to $5.2 million, a reversal of its 7.9 percent decline a year earlier
Hancock did narrow its loss for the year to $8.5 million, or 42 cents a share. Since filing for bankruptcy protection in 2007 and emerging from it in 2008, the company has posted a net profit once – a $1.8 million gain in fiscal year 2009.
Still, the loss for fiscal year 2012 was the smallest loss it has posted since 2007. In fiscal year 2011, its losses totaled $11.3 million, or 57 cents a share.
“We are pleased to report improved performance in the fourth quarter and the momentum that it brings us going into 2013,” said President and CEO Steve Morgan. “Operating income was up $6.8 million over last fourth quarter and although we had a net loss of $600,000 for the fourth quarter, this included one-time refinancing expenses of $1.5 million. We feel that the decision to refinance early even though it was not planned at the beginning of the year, despite the resulting negative impact to the fourth quarter results, had a positive impact as we expect it to provide us stability for the next four years.”
During the past year, Hancock Fabrics opened one store, closed three and relocated eight to end the year with 261 stores in 37 states.
In March, James Brown joined the company as executive vice president and chief financial officer, replacing Robert Driskell, who resigned in December. Larry Fair has been interim CFO.
“With our full leadership team in place and the momentum from the fourth quarter, we expect that 2013 will continue with the trend we saw in the fourth quarter,” Morgan said. “We have now completed 15 consecutive months of positive comparable sales.”

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