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99 Cents Only Produces Mixed Results In Q4

99 Cents Only Stores produced mixed results in its fourth quarter, gaining sales but growing its net loss.

For the fourth quarter of fiscal 2017, 99 Cents Only Stores posted a net loss of $20.9 million versus a net loss of $18.4 million in the fourth quarter of fiscal 2016 as expenses rose. Net sales increased 6.7% to $552.5 million, while comparable store sales gained 6.4%. Average ticket gained 4.4% and customer traffic increased 1.9%. Operating loss was $6.5 million versus $2.7 million in the period a year prior.

Seasonal merchandise and general merchandise helped drive comps in the quarter, the company stated, while fresh offerings improved due to better product availability, improved in-stock levels and the expansion of the company’s third party distributor partnership.

For the full-year fiscal 2017, net loss was $118.2 million versus a net loss of $248 million in the fiscal year earlier. Net sales increased 2.9% to $2.06 billion as comps gained 2.1% driven by higher average ticket and traffic.

Geoffrey Covert, 99 Cents Only president and CEO, said, “We concluded fiscal 2017 with a strong fourth quarter driven by growth in same store sales, expanding margins and lower inventory levels. As a result, we continued to solidify 99 Cents Only Stores’ liquidity position while generating significant year-over-year growth in adjusted EBITDA. In addition, fourth quarter gross margin of 30.1% improved 340 basis points year-over-year, primarily due to our concerted efforts to improve shrink and scrap and execution in our logistics network. I am also pleased with our continued success in inventory management as total inventory declined on both a year-over-year and sequential quarter basis. Importantly, adjusted EBITDA was $23.4 million for the fourth quarter compared to $2.4 million in the fourth quarter of last year. For the full year, adjusted EBITDA of $50.6 million was up 28% compared to the prior year. We are encouraged by this result, which represents the reversal of a two-year decline in adjusted EBITDA.”