Hancock Fabrics narrows losses

Economic StockDaily Journal

BALDWYN – Hancock Fabrics saw improvement in its gross profit figures during its second quarter, as well as the first half of its fiscal year, but the craft and fabric retailer wasn’t quite able to pull out of the red.

The company on Tuesday said it recorded a net loss of $2.6 million, or 13 cents a share for the quarter ended July 27. That compares to a loss a year ago of $3.3 million, or 17 cents a share.
Sales for the quarter dipped to $59.1 million from $60.5 million.

Comparable store sales – a key figure measuring sales at stores open for more than a year – fell by 1.7 percent. That’s in improvement over the 5 percent drop in the same period a year ago.

For the first six months of its fiscal year, Hancock Fabrics recorded a loss of $3.1 million, or 15 cents a share. That compares to a $5.7 million loss, or 29 cents a share a year earlier.

And for the first half of its fiscal year, sales fell 1.2 percent to $122.9 million. Comparable store sales declined 0.8 percent.
Hancock’s operating income for the first half of the fiscal year climbed into positive territory at $32,000, compared to an operating loss of $3.2 million in the first half of 2012.

“The second quarter numbers follow the trend we have seen since late last year of good increases in gross profit dollars and rate as well as near-flat SG&A (selling, general and administrative) expense dollars,” said Hancock President and CEO Steve Morgan. “We continue to be encouraged by these improvements to operating income, as they have been accomplished despite the sluggish summer sales we and others in our industry have experienced.

“We have also focused on cash management and have reduced cash used in operations by $5.2 million in the second quarter this year compared to the same period last year.”

Morgan continued, “As we move into the back half of the year, we feel confident that these improvements will continue. We are well positioned with inventory in place and our promotional strategy to have a successful third and fourth quarter.”