Tuesday Morning Reports Comp Rise, Net Loss

Tuesday Morning saw its comparable store sales rise in the fourth quarter, but supply chain costs resulted in a wider net loss.

For the fourth quarter ended June 30, comparable store sales increased 1.8%. Comp sales were comprised of a 2.6% increase in customer transactions, partially offset by a 0.8% decrease in average ticket. Net sales were $223.6 million compared to $222.8 million from the prior year period.

The company’s operating loss for the fourth quarter of fiscal 2017 was $17.1 million, compared to an operating loss of $6.3 million in the fourth quarter of fiscal 2016. The company reported a net loss of $17.3 million, or $0.39 per share, in the fourth quarter of fiscal 2017, compared to a net loss of $3.9 million, or $0.09 per share, in the fourth quarter of fiscal 2016.

The off-price retailer said its fourth quarter results were adversely impacted by the recognition of previously capitalized supply chain and freight costs, driven significantly by elevated costs resulting from its supply chain issues experienced earlier in the year.

Steve Becker, CEO, Tuesday Morning, said, “Our distribution network is currently operating effectively and we believe we are well prepared for peak. This quarter, our comparable sales were up 1.8%, and after adjusting for the Easter timing shift, we estimate the comp increase would have been approximately 2.5%. We also made progress against our strategic priorities— we reduced our inventory levels versus last year by $20 million, we reduced our bank line usage by $10 million compared to the prior quarter, we implemented an organizational restructuring, we continued to improve our supply chain efficiency while advancing our real estate strategy and are preparing to launch our new Tuesday Morning brand initiative. It is also important to note that our fourth quarter operating loss was significantly burdened by the non-cash impact of previously incurred and capitalized supply chain costs.”