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Tuesday Morning Posts Q2 Turnaround

For the fiscal 2014 second quarter ended December 31, 2013, Tuesday Morning Corp. posted net income of $17.7 million, or 41 cents per share, versus a net loss of $21.5 million, or 51 cents per share, in the fiscal 2013 period. Excluding business turnaround charges, non-GAAP basis net income was $19.3 million, or 45 cents per share, versus $15.5 million, or 37 cents per share, in the fiscal 2013 second quarter, the company stated.

Comparable store sales gained 3.1% compared to the second quarter of fiscal 2013, Tuesday Morning noted, with a 7% increase in customer transactions partially offset by a 3.9% decrease in average ticket. Net sales were $285.8 million, essentially flat compared with $285.3 million in the fiscal 2013 second quarter.

In the fiscal 2014 period, Tuesday Morning pointed out that it had exited a number of non-core categories such as women’s apparel and footwear. The company added that comps in ongoing core categories increased 7% and were led by exceptional strength in Furniture, up 57%, Sheets/Linens, up 23%, and Home Décor, up 20%. 

Operating income in the second quarter was $18.3 million, Tuesday Morning reported, versus an operating loss of $22.6 million in the fiscal 2013 period. Excluding business turnaround charges, adjusted operating income on a non-GAAP basis was $20.3 million, compared to non-GAAP adjusted operating income of $24.6 million in last year’s second quarter. The company attributed the decrease in non-GAAP operating income to lower non-GAAP gross profit and increased store costs.

Michael Rouleau, Tuesday Morning CEO, said in announcing the financial results, “During the second quarter, our experienced team executed a disciplined program aimed at improving operations, enhancing merchandising and strengthening the Tuesday Morning offering to our value-oriented consumer. Our progress to date includes improved customer service in well-stocked stores displaying fresh, new merchandise at great values, all of which yielded solid comparable store sales results, increased inventory turnover and a strong cash position. We are pleased with our progress and results this quarter and are confident we will demonstrate continued improvement in the second half of our fiscal 2014, yet remain focused on the significant work ahead necessary to complete our business turnaround program.”