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FAY'S REPORTS INCREASE IN SECOND QUARTER EARNINGS

 LIVERPOOL, N.Y., Sept. 7 /PRNewswire/ -- Fay's Incorporated (NYSE: FAY) reported net earnings for the second quarter ended July 31, 1993, were $3,066,000 or $.15 per share, compared to $2,944,000 or $.15 per share in the second quarter of last year. Included in operating results for the second quarter was an unusual gain of $481,000, net of tax, or $.02 per share, resulting from the termination of obligations under leases for two of the nine Paper Cutter Stores closed during the previous quarter.
 Revenues for the quarter increased 2.6 percent to $221.9 million from $216.4 million a year earlier. Revenues for comparable stores (stores open one year or more as of July 31, 1993) increased 3.5 percent for the quarter. At the end of the second quarter, Fay's was operating 308 stores, compared to 315 stores at the end of the second quarter of fiscal 1993.
 After a one-time non-cash charge of $4.8 million or $.24 per share associated with the adoption of a new accounting standard for postretirement benefits, Fay's incurred a loss of $2,837,000 or $.14 per share for the 26 weeks ended July 31, 1993. Also included in operating results for the first half of the year were charges of $2.4 million or $.12 per share for future rental obligations, abandoned leasehold improvements and other expenses related to the closing of nine Paper Cutter Stores located in the Philadelphia metropolitan market. Excluding the charges relating to the store closings and the charge for the change in accounting method, Fay's net earnings for the first half were $4,321,000 or $.22 per share, compared to $4,481,000 or $.23 per share earned in the first six months of last year.
 Revenues for the first half of the year increased 2.4 percent to $438.7 million from $428.5 million a year earlier. For the first half of the year, revenues from comparable stores increased 3.3 percent.
 Henry A. Panasci, Jr., chairman of the board of Fay's, stated, "We are encouraged by the gains made in comparable store sales during the second quarter. Our focus on cost control will be intensified as we attempt to leverage the positive trend in sales. Efforts made in this regard should result in improved earnings during the second half of the year."
 During the first half of the year, the company acquired seven drug stores and opened two Wheels Discount Auto Supply Stores and one Paper Cutter Store. In addition, one traditional drug store was converted into a Fay's Drug Store and one Fay's Drug Store was sold. At the end of the second quarter, Fay's was operating 250 drug stores in New York, Pennsylvania, New Hampshire and Vermont, together with 32 Wheels Discount Auto Supply Stores and 26 Paper Cutter Stores in the State of New York.
 FAY'S INCORPORATED
 (Unaudited)
 Thirteen Weeks Thirteen Weeks
 Ended Ended
 July 31, 1993 July 25, 1992
 Revenues $221,925,000 $216,364,000
 Earnings Before Taxes 5,220,000 4,982,000
 Net Earnings 3,066,000 2,944,000
 Net Earnings Per Share $ .15 $ .15
 Average Shares Outstanding 20,067,558 19,942,565
 Stores in Operation at End
 of Period 308 315
 Twenty-Six Weeks Twenty-Six Weeks
 Ended Ended
 July 31, 1993 July 25, 1992
 Revenues $438,667,000 $428,520,000
 Earnings Before Taxes 3,344,000 7,579,000
 Earnings Before Cumulative
 Effect of Accounting Change 1,969,000 4,481,000
 Cumulative Effect of Accounting
 Change (4,806,000) ---
 Net Earnings (Loss) (2,837,000) 4,481,000
 Earnings Per Share:
 Earnings Before Cumulative
 Effect of Accounting
 Change $ .10 $ .23
 Cumulative Effect of Accounting
 Change (.24) ---
 Net Earnings (Loss) $ (.14) $ .23
 Average Shares Outstanding 19,982,108 19,901,847
 Stores in Operation at End
 of Period 308 315
 -0- 9/7/93
 /CONTACT: Henry A. Panasci Jr., chairman of the board of Fay's, 315- 451-8000/
 (FAY)


CO: Fay's Incorporated ST: New York IN: REA SU: ERN

KL -- CL011 -- 9395 09/07/93 14:32 EDT
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Publication:PR Newswire
Date:Sep 7, 1993
Words:681
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