News Column

Weather trims Hancock Fabrics Q1 sales

June 12, 2014

By Dennis Seid, Northeast Mississippi Daily Journal, Tupelo

June 12--BALDWYN -- Like many retailers, Hancock Fabrics saw its sales take a hit in February and March due to the harsh winter weather in many parts of the country.

The Baldwyn-based fabrics and craft retailer said its fiscal first-quarter sales were $63 million, a decline from $63.7 million for the same period a year ago.

The company estimates the weather impacted sales by $1.8 million.

Subsequently, Hancock posted a net loss of $451,000 for the quarter, compared to a loss of $467,000 last year.

If the company had recovered even half of the estimated missed sales, it would have recorded a sales increase, said Hancock Chief Financial Officer James Brown.

He also noted that gross margin was slightly less than last year's quarter -- 45.1 percent versus 45.5 percent, but this year's quarter still showed strong results.

"Gross profit this quarter was slightly less than last year, but last year's gross margin was a 470-basis point improvement over 2012," he said.

Comparable store sales -- a key retail metric -- were down 1.1 percent from a year ago, largely blamed on the weather.

"We have a large footprint with stores in 37 states, and we had some stores that were shut down because of the weather, which affected sales," Brown said.

Sales trends have improved since March, even as Hancock enters its second quarter, traditionally a slower sales period for the company.

Brown said Hancock is focused on its marketing efforts to push sales higher in the quarter, which the company hopes will provide momentum to the critical third and fourth quarters. Back-to-school sales will ensue in two months, followed by the critical holiday selling season.

"I think we're doing OK," Brown said.


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Source: Northeast Mississippi Daily Journal (Tupelo)

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