99 Cents Only Stores produced mixed results in its fourth quarter, gaining sales but growing its net loss.
For the fourth quarter of fiscal 2017, 99 Cents Only Stores posted a net loss of $20.9 million versus a net loss of $18.4 million in the fourth quarter of fiscal 2016 as expenses rose. Net sales increased 6.7% to $552.5 million, while comparable store sales gained 6.4%. Average ticket gained 4.4% and customer traffic increased 1.9%. Operating loss was $6.5 million versus $2.7 million in the period a year prior.
Seasonal merchandise and general merchandise helped drive comps in the quarter, the company stated, while fresh offerings improved due to better product availability, improved in-stock levels and the expansion of the company’s third party distributor partnership.
For the full-year fiscal 2017, net loss was $118.2 million versus a net loss of $248 million in the fiscal year earlier. Net sales increased 2.9% to $2.06 billion as comps gained 2.1% driven by higher average ticket and traffic.
Geoffrey Covert, 99 Cents Only president and CEO, said, “We concluded fiscal 2017 with a strong fourth quarter driven by growth in same store sales, expanding margins and lower inventory levels. As a result, we continued to solidify 99 Cents Only Stores’ liquidity position while generating significant year-over-year growth in adjusted EBITDA. In addition, fourth quarter gross margin of 30.1% improved 340 basis points year-over-year, primarily due to our concerted efforts to improve shrink and scrap and execution in our logistics network. I am also pleased with our continued success in inventory management as total inventory declined on both a year-over-year and sequential quarter basis. Importantly, adjusted EBITDA was $23.4 million for the fourth quarter compared to $2.4 million in the fourth quarter of last year. For the full year, adjusted EBITDA of $50.6 million was up 28% compared to the prior year. We are encouraged by this result, which represents the reversal of a two-year decline in adjusted EBITDA.”
