Tuesday Morning 1Q Net Loss Rises; COO Marchetti Leaves Company
DALLAS-An increase in the red ink on the company's bottom line provided Tuesday Morning with a difficult beginning to its fiscal year.
The off-price retailer posted a loss of $7 million in its fiscal first quarter, which ended on Sept. 30, up from its loss of $5.7 million in the first quarter of last year. Declining margins and rising expenses combined to hurt the company's bottom line in the quarter.
In its statement announcing the quarterly results, Tuesday Morning also said Michael Marchetti, executive vice president and chief operating officer, has left the company. The statement did not provide a reason for Marchetti's departure, nor did it name a successor.
Net sales in the quarter edged up 1.3 percent to $172.8 million, including an increase in same-store sales of 1.7 percent. However, gross margin fell 51 basis points to 37.6 percent. In addition, selling, general and administrative expenses rose 3.2 percent in dollars and 81 basis points as a percentage of sales, to 43.9 percent.
Brady Churches, who became Tuesday Morning's president and CEO in September, vowed that the company would make "improvement" to its merchandising, store operations and marketing. "We believe our loyal customers will respond positively to these improvements once they are implemented over the course of the next few quarters," Churches said.
Tuesday Morning also said it expects net sales for the fiscal year ending on June 30, 2013, to total between $820 million and $830 million, with same-store sales expected to be flat for the year.
Marchetti joined Tuesday Morning in 2000 and was named executive vice president and chief operating officer in 2003. In June of this year, he assumed the role of interim president and CEO after the retailer relieved Kathleen Mason of these posts, and held these roles until Churches joined the company.