DALLAS-Reduced margins and one-time charges increased the fourth-quarter net loss for Tuesday Morning from $2 million to $15.6 million. For the fiscal year, the closeout retailer reported a net loss of $56.4 million, compared to net income of $3.9 million for the prior fiscal year.
Increased markdowns on clearance inventory—along with a flow-through of more buying, distribution and freight costs—cut gross margin by 440 basis points to 33 percent. Tuesday Morning also posted non-recurring charges related to legal, consulting, severance and recruitment expenses, store reorganization and cleanup costs, and the cessation of its e-commerce operation.
All of these offset a net sales gain of 2.9 percent to $202.1 million, including a 4.6 percent increase in same-store sales. For the fiscal year as a whole, which ended on June 30, Tuesday Morning reported net sales of $838.3 million, up 3.1 percent and including same-store sales pickup of 3.9 percent. Selling, general and administrative expenses roses 1.4 percent in dollars but declined 57 basis points as a percentage of sales, to 38.6 percent.
Michael Rouleau, recently named permanent CEO, said Tuesday Morning showed “good progress on the short-term priorities we laid out for the organization, and that is evidenced by the visibly cleaner stores, reduction in the level of clearance merchandise and improved flow of fresh merchandise … Our sights are now set on the next set of priorities as we further position ourselves to execute the turnaround of Tuesday Morning.”