Hancock Fabrics narrows quarterly loss

By NEMS Daily Journal

BALDWYN – Craft and fabrics retailer Hancock Fabrics narrowed its first-quarter loss from last year, even as sales declined slightly.
On Tuesday, the Baldwyn-based company reported sales of $63.7 million for the quarter ending April 27. That compares to sales of $63.9 million for the same period a year ago, representing a 3 percent decline.
Hancock saw an 8 percent drop in e-commerce sales – from $985,000 to $906,000 – which it said was caused primarily by a reduction in promotional sales.
For the quarter, Hancock recorded a loss of $467,000, or 2 cents a share, versus a loss of $2.4 million, or 12 cents a share last year.
The company did reverse its operating loss from a year ago, posting operating profit of $1.3 million. In the first quarter of 2012, Hancock had an operating loss of $1.2 million.
“We are glad to report the ongoing improvement in operating income. … for the first time since 2010, we have had positive operating income in the first quarter,” said company President and CEO Steve Morgan. “This is an encouraging accomplishment, even as top line sales were hurt from the unusual weather losses we had this spring, we were able to drive gross profit improvements. These gains continue the trend from the fourth quarter last year and we continue to strive to enhance this as we move forward in 2013.”
During that fourth quarter, Hancock saw net sales pick up marginally. It also drastically trimmed its quarterly loss from $5.2 million to about $600,000. For the full fiscal year, the company’s sales rose 2.2 percent, its best showing in at least seven years.
For the first quarter of this year, Hancock saw its gross margin rise nearly 5 percentage points. Net sales per square foot also rose.
Apparel and craft fabrics accounted for 40 percent of the company’s merchandise mix, followed by sewing accessories (39 percent), non-sewing accessories (17 percent) and home decorating fabrics (13 percent).
The company opened two new stores and closed four stores in markets it chose to no longer stay in, giving it a total of 261 stores in 37 states.