Tuesday Morning Goes from Loss to Gain in Q2
DALLAS-Thanks to what CEO Michael Rouleau called "a disciplined program aimed at improving operations," Tuesday Morning turned its bottom line from red to black in its fiscal second quarter, posting $17.7 million in net income compared to a net loss of $21.5 million one year ago.
The improvement in the closeout retailer's operations can be seen in its gross margin, which leaped 1,317 basis points to 34.8 percent, due largely to the writedown of inventory related to its business turnaround initiative. Also, selling, general and administrative expenses were down 3.7 percent in dollars and 99 basis points as a percentage of sales, to 28.5 percent.
Net sales finished the quarter essentially flat at $285.8 million, but same-store sales posted a gain of 3.1 percent. Comparable sales in Tuesday Morning's ongoing core categories were up 7 percent, with particularly strong performances from furniture (up 57 percent), sheets and linens (up 23 percent) and home decor (up 20 percent). The retailer exited non-core categories such as women's apparel and footwear in the prior fiscal year.
While the Tuesday Morning team is looking ahead to further improvements for the second half of fiscal 2014, Rouleau said the company will "remain focused on the significant work ahead necessary to complete our business turnaround program."