Stanley Q1 Net Loss Widens
STANLEYTOWN, Va.-With sales dropping and costs on the rise, Stanley Furniture posted a net loss of $4.4 million in its fiscal first quarter, compared to a net loss of $2.1 million in last year's first quarter.
Net sales fell 16 percent to $21.9 million in the quarter, which ended on March 29. Selling, general and administrative expenses rose 11.6 percent in dollars and 611 basis points as a percentage of sales, to 24.8 percent. Gross margin fell 663 basis points to 6.4 percent.
During the quarter, Stanley announced that it would discontinue its Young America brand, which added $1.2 million in non-cash restructuring charges to its costs. Speaking of this move, Glenn Prillaman, Stanley's president and CEO, said, "We made great strides towards building a business model that would successfully compete in a quickly changing consumer marketplace, but concluded we could not ultimately achieve profitability within an acceptable amount of time."
Prillaman added that the Stanley brand achieved double-digit order growth in the quarter. "We expect further growth in the coming periods as new introductions gain traction," he said. "We will also benefit from the increased time, attention and resources focused on a single brand."