99 Cents Only said it was encouraged by its turnaround efforts in the second quarter, narrowing its net loss and slightly increasing sales.
For the second quarter ended July 29, 99 Cents Only Stores posted a net loss of $35.1 million versus a net loss of $78.1 million for the year-prior period. Net sales in the quarter increased 1.6% to $496.4 million year over year as comparable store sales increased by 1.1%.
“I remain encouraged by our progress in executing our turnaround plan,” said Geoffrey Covert, 99 Cents Only president and CEO. “With measurable improvement this past quarter, we have solid momentum as we enter the second half of fiscal 2017. Progress is evident across many aspects of the enterprise and our improved sales performance provides an indication that our plan is taking hold. During the second quarter, same-store sales were positive 1.1%, and on a year to date basis, same store sales improved to positive 0.5%. Total inventory as of the end of the second quarter was $176 million, down nearly $100 million from $275 million as of the end of the second quarter last year. Our improved sales performance and lower inventory levels have collectively strengthened our liquidity position. Cash borrowings under our ABL facility are now the lowest they have been in the past two years. As of the end of the second quarter, cash borrowings under our ABL facility were $21 million, down $19 million compared to the prior-quarter end and down $86 million from a year ago.”
Still, Covert cautioned, “Since the beginning of our turnaround plan in the third quarter last year, we have maintained that it will take time to operationally address our key issues, and even longer for the changes we are making to be fully reflected in our financial results. However, based on the results of the first half of fiscal 2017, I am optimistic that we remain on-track to return 99 Cents Only Stores to sustained growth in the long-run.”
99 Cents Only operates 394 stores.