Tuesday Morning Loss Jumps in Q4
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."