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HOUSE OF FABRICS HAS RECORD THIRD QUARTER AND FIRST NINE MONTHS OF ITS FISCAL YEAR

 HOUSE OF FABRICS HAS RECORD THIRD QUARTER AND
 FIRST NINE MONTHS OF ITS FISCAL YEAR
 SHERMAN OAKS, Calif., Nov. 25 /PRNewswire/ -- House of Fabrics Inc. (NYSE: HF) today reported that net income surged 42 percent in the third quarter on sales that were 35 percent above the prior-year level.
 Net income for the quarter climbed to $6,422,000, equal to 43 cents per share, from $4,518,000, or 38 cents per share, as adjusted for the 2-for-1 stock split effected on April 30, 1991. Average shares outstanding increased 26 percent to 14,989,000 from 11,895,000 a year ago, reflecting the acquisition of Fabricland Inc. on July 16, 1991.
 Sales for the third quarter advanced 35 percent to $140,443,000 from $104,360,000 in the prior year.
 For the first nine months, net income totaled a record $11,345,000 equal to 86 cents per share, up 54 percent from $7,375,000, or 60 cents per share, as adjusted for the previously mentioned stock split.
 Sales for the year-to-date period jumped to $339,763,000, an increase of 22 percent from $278,137,000 one year earlier.
 Gary L. Larkins, president and chief executive officer, said: "We are very pleased with the record results being posted to date. The assimilation of Fabricland is progressing very well, and our team, both in Southern California and in Portland, has done an outstanding job in accomplishing a great deal in a very short period of time.
 "It is important to note that the quarter reflected higher than normal general and administrative expenses since cost reduction measures related to redundant facilities were not completed until nearly the end of the period. All related costs were absorbed during the third quarter.
 "Our performance in the fourth quarter, which is always the year's most substantial period, will benefit from a lower cost structure. In addition, as we go forward, we expect to see additional benefits from the Fabricland acquisition. Our plan is to fine tune operations and take steps to increase operating efficiencies and profitability.
 "Several important factors are driving House of Fabrics' progress. Despite the economy, our stores continue to perform very well, demonstrating that we are largely recession-resistant. Second, the super store conversion program is basic to our strong growth and profit improvement. In this respect, it should be noted that we acquired 83 super stores in the Fabricland transaction. Located primarily in the Northwest, these stores continue to post very favorable sales results.
 "We are also expanding our own base of super stores. We now operate 455 super stores and 216 mall-based units. In the first nine months, we opened approximately 42 new super stores and closed 59 stores, 53 of which were smaller mall locations. It is expected that we will open a total of 45 new super stores this year, with substantial additional openings anticipated in the following fiscal year.
 "Our strategy is to convert the company from a reliance on smaller, mall-based units of approximately 4,500 square feet to become an operator of super stores averaging 10,000 to 12,000 square feet of space with a much more comprehensive array of merchandise. Customers have responded very positively to these large stores with their excellent displays and expanded fabric, craft, notion and sewing machine departments. Today these larger stores produce 77 percent of sales and an even higher percentage of operating profit, clearly demonstrating the effectiveness of this program which we launched six years ago.
 "All of our programs are on target, and our stores conintue to generate very positive sales results. Moreover, further benefits from our major acquisition and the continuing development and seasoning of our super store base will support the company's strong growth trends over the next several years.
 "Our company is now much stronger and more broadly based than ever before in its history. By all indications, House of Fabrics should continue to gain momentum in the fourth quarter, and we believe that the three months ended Jan. 31, 1992 will be, by a wide margin, the most substantial quarter in the company's history. Thus, fiscal 1992 will be a record year in revenues, net income and net income per share for House of Fabrics."
 House of Fabrics Inc. is the nation's largest chain of company owned and operated retail fabric stores with 671 currently in operation.
 HOUSE OF FABRICS INC.
 Summary of Consolidated Operations
 (Unaudited)
 Three Months Ended Oct. 31
 1991 1990
 Sales $140,443,000 $104,360,000
 Income before income
 taxes $10,743,000 $7,594,000
 Net income $6,422,000 $4,518,000
 Net income per share $ .43 $ .38 (a)
 Average shares outstanding 14,988,894 11,895,022
 Nine Months Ended Oct. 31
 1991 1990
 Sales $339,763,000 $278,137,000
 Income before income
 taxes $18,697,000 $12,395,000
 Net income $11,345,000 $7,375,000
 Net income per share $.86 $.60 (a)
 Average shares outstanding 13,258,318 12,383,690
 (a) Adjusted to reflect a 2-for-1 stock split effected on April 30, 1991
 -0- 11/25/91
 /CONTACT: Gary L. Larkins, president of House of Fabrics, 818-995-7000/
 (HF) CO: House of Fabrics Inc. ST: California IN: REA SU: ERN


AL-SE -- LA008 -- 6677 11/25/91 08:33 EST
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Date:Nov 25, 1991
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