Loss Grows For 99 Cents Only Stores

99 Cents Only Stores saw its net loss widen in the fourth quarter and fiscal year.

For the fourth quarter of fiscal 2016, ended January 29, the retailer’s net sales increased 1% to $517.8 million, compared to $512.6 million in the fourth quarter of the prior fiscal year. Same-store sales decreased 3.2% due to lower customer traffic of 4.8%, partially offset by higher average ticket of 1.6%.

Net loss was $11.7 million in the fourth quarter of fiscal 2016 compared to net loss of $2.3 million for the fourth quarter of fiscal 2015. 

For fiscal 2016, the company’s net sales increased 4% to $2 billion, compared to $1.9 billion in fiscal 2015. Same-store sales decreased 2.7% due to lower customer traffic of 4.5%, partially offset by higher average ticket of 1.9%. Net loss was $241.2 million in fiscal 2016, compared to net income of $5.5 million in fiscal 2015.

As previously announced, during the third quarter of fiscal 2016, the company recorded a $120 million non-cash goodwill impairment charge relating to the retail reporting unit. The company completed the analysis in the fourth quarter of fiscal 2016 and recorded an adjustment of $28 million, lowering the goodwill impairment charge to $92 million. 

Geoffrey Covert, 99 Cents Only Stores president and CEO, stated, “The new senior leadership team is in the early stages of executing our plan to improve the operating performance through aligning around our four key strategic priorities and focusing on improving our customers’ experience. The team has focused on and delivered significant improvements in our liquidity through monetizing and reducing inventory by nearly $100 million as compared to last year and proactively amending and extending our ABL facility. While it will take time to completely address the issues we are facing and even longer for our efforts to be reflected in the company’s financial results, I am quite pleased with our initial progress.”

99 Cents Only currently operates 391 stores.