Tuesday Morning saw its net loss widen in the third quarter, as well as a decline in comps and net sales, and pointed to the negative impact of lower than planned store inventories.
For the third quarter, Tuesday Morning posted a net loss of $14.8 million, or 34 cents per diluted share, versus a net loss of $5.2 million, or 12 cents per diluted share, in the year-previous period. Tuesday Morning missed an analyst average estimate of a 31 cents per diluted share loss published by MarketBeat.
Comparable store sales slipped 2.7%. Net sales were $203 million versus $211.4 million in the previous third quarter. Operating loss was $14.7 million versus an operating loss of $5.9 million in the 2016 period. The company said that net sales during the third quarter were negatively impacted by lower than planned store level inventories due to challenges in the company’s supply chain operations and 24 fewer stores.
During the third quarter, seven stores were relocated, seven stores were opened, two stores were expanded, and 23 stores were closed, for an ending store count of 724.
Steve Becker, Tuesday Morning CEO, said, “Our third quarter comparable sales performance largely reflected decreased inventory levels in certain core categories in January and February as well as a late seasonal set. As our inventory filled in, we saw improvement during the quarter and we have experienced positive comparable store sales growth in March and April. We have now turned our attention to consistent improvement in our supply chain with a focus on driving our costs down. While we have already made progress, we have considerable work to do and efficiencies to be gained.”
In terms of its outlook, Tuesday Morning said that the company currently expects to invest capital of approximately $37 million to $40 million in fiscal 2017, with a continuing focus on its real estate strategy for new stores, relocations and expansions of existing stores, and information technology infrastructure and enhancements.
