After a second quarter that saw comparable store sales decline, Tuesday Morning said it is continuing to focus on its reorganized merchant team as it looks to reshape its off-price buying operations.
Net sales in the company’s second quarter were $324.4 million, compared to $338.4 million for the second quarter of fiscal 2019. The company’s sales comparison to the prior year was largely driven by a decline in comparable store sales performance and was also impacted by the net decrease of 15 stores during the last 12 months.
Comparable store sales decreased 3% compared to the same period a year ago. Transactions increased 0.7% and average ticket decreased 3.7%.
The company reported net income of $10.9 million, or $0.24 per share, for the second quarter of fiscal 2020 compared to net income of $16 million, or $0.35 per share, for the second quarter of fiscal 2019.
Steve Becker, CEO, Tuesday Morning, said, “We again delivered positive transaction growth during the quarter despite a highly promotional environment and fewer shopping days between Thanksgiving and Christmas. This transaction growth, however, did not fully offset the decline in basket, leading to a comp decrease of 3% for the period. Despite our topline performance, we managed our receipts tightly and ended the quarter with store level inventory down approximately 10% versus last year.”
Becker added, “With veteran off-price merchandise leadership in place, we have significantly re-organized our merchant team, replaced the leadership at the divisional level and recruited over ten talented, off-price merchants. We have reshaped this team with a focus on becoming a more flexible and opportunistic off-price buying organization. Our penetration of closeout goods has increased, our values have improved and our vendor base has expanded meaningfully. As we enter the spring season, we are focused on driving improved turn, showing our customers new deals with compelling value and driving inventory receipt freshness. We are highly liquid and well positioned to chase goods in a great environment for sourcing off-price merchandise.”
Regarding its fiscal year 2020 outlook, Becker said, “We continue to experience positive transaction growth entering the spring season. We are undergoing transformational changes led by our new merchant leadership, involving the entire merchant organization, buying processes and assortment, all of which will enable us to operate as a true off-pricer and will drive our success going forward. As we execute these changes, we are withdrawing our prior guidance. We expect adjusted EBITDA for the full year to be positive, although down to last fiscal year.”