BALDWYN — Hancock Fabrics Inc. has released financial results for its second quarter ended July 26 and the first half of fiscal 2014.
Net sales for the quarter were $59.3 million compared to $59.1 million for second quarter of last year, and comparable store sales increased 0.9 percent following a 1.7percent decrease for the same period of the prior year, which represents a 260 basis point improvement.
Hancock posted a net loss for the quarter of $3.3 million, or $0.16 per basic share, compared to a net loss of $2.6 million, or $0.13 per basic share in the second quarter of fiscal 2013.
Net sales for the first half of fiscal 2014 were $122.3 million compared to $122.9 million in the first half of last year, and comparable store sales declined by 0.1. Excluding the estimated weather impact from the first quarter of 2014, comparable store sales for the first half of 2014 would be a positive 1.40 percent.
Hancock saw a net loss of $3.8 million, or $0.18 per basic share, in the first half of fiscal 2014, compared to a net loss of $3.1 million, or $0.15 per basic share in the first half of fiscal 2013.
Steve Morgan, Hancock president and CEO, said, “We were able to achieve positive comp sales in the second quarter, typically our lowest sales period and maintain most of the 340 basis point gross profit improvement from the first half of the prior year. Expenses were a challenge in the second quarter as we incurred an unusual amount of health benefit-related costs and expenses related to the going private transaction, which was subsequently withdrawn. However, in the event we pursue going private in the future, we will be able to leverage a good portion of the expenses already incurred. Depreciation also increased from our investments in the newly redesigned web site and the relocation of stores into our new format; however, these investments are increasingly driving comp sales and operating income. As with most retailers, our first half sales and margin results were negatively impacted by the unusually bad weather early in the year but that is now behind us and we see good opportunity going forward.
“As we move into the back half of the year we will continue to focus on maintaining the large margin gains from the prior year. We will accelerate our focus on expense management to recoup the significant one-time expenses from the second quarter and look to keep decreasing expenses going forward. ”