Furniture Brands Logs $21.2 Million Q1 Loss
ST. LOUIS-Decreased sales, a higher expense-to-sales ratio and some one-time charges combined to put Furniture Brands International in the red in its first quarter, to the tune of $21.2 million, compared to net income of $379,000 in last year's first quarter.
Net sales fell 11.3 percent, to $254.7 million, in the quarter, which ended on March 30. Included in the top-line result was a 2.3 percent decline in same-store sales at Furniture Brands' Thomasville company-owned stores.
Although selling, general and administrative expenses were down by 1.2 percent, they rose 278 basis points as a percentage of sales, to 27.1 percent. Gross margin fell 466 basis points as a percentage of sales, to 20.2 percent.
Furniture Brands' interest expense tripled in the quarter, to $2.4 million. The company also posted charges for product rationalization, charges related to "dark" stores and impairment charges related to assets held for sale.
Acknowledging that the first quarter was difficult for Furniture Brands, Ralph Scozzafava, chairman and CEO, said the company is "aggressively addressing the issues." Scozzafava said the company "made significant progress in revamping our stationary line at Lane and introduced a new line of motion upholstery at Broyhill."
In addition, he said, Furniture Brands saw some positives from its continued transition of Thomasville's product line and marketing. It is also progressing in its supply-chain efficiency program with the consolidation of its Mount Airy, N.C., plant into its Longview, N.C., facility. "Finally, we continued our overall cost-containment efforts and have identified further opportunities for meaningful reductions," Scozzafava said.