SPIEGEL, INC. REPORTS FOURTH QUARTER AND FULL YEAR 1991 RESULTS
OAK BROOK, Ill., Feb. 19 /PRNewswire/ -- Spiegel, Inc. (NASDAQ: SPGLA) today reported net earnings for the fourth quarter ended Dec. 31, 1991, of $13.0 million, or $0.25 per share, compared to $36.0 million or $0.69 per share, for the fourth quarter 1990. Spiegel's fourth quarter 1991 results include a nonrecurring charge of $9.6 million pretax, or $.10 per share, to provide for the closing of the 17-store retail division of its Honeybee subsidiary. Total revenues for the quarter were $713.1 million compared to $773.9 million in the prior year's quarter.
For the year net earnings were $16.9 million, or $0.33 per share, down from $61.5 million, or $1.18 per share, last year. In total, 1991's results include expenses of $10.8 million pretax, or $0.11 per share, relating to Honeybee store closings. Total revenues for the twelve months ended Dec. 31, 1991, were $1.976 billion compared to $1.993 billion in 1990.
Fourth quarter gross profit margin on net sales was 34.6 percent compared to 34.8 percent in 1990's fourth quarter. Fourth quarter margin performance showed less pressure than was experienced in the previous quarters of 1991. Inventories at Dec. 31, 1991, were $307.0 million compared to $336.1 million last year.
For the quarter and the full year, gross profit margins have been affected by higher occupancy expenses, resulting from the opening of 112 new Eddie Bauer stores in 1990 and 1991.
Selling, general and administrative expenses increased as a percent of total revenues, though total dollar expenses were held in line with last year's fourth quarter despite higher postal and delivery rates at both Spiegel and Eddie Bauer catalog and increased customer credit card charge-offs.
Circulation strategy and expense for the Spiegel catalog was carefully planned to motivate existing customers. However, the longer than anticipated recession affected spending by those customers.
Sales at the Eddie Bauer store division were also impacted by lackluster consumer spending.
"In 1991 we were dealing with the fastest changing retail environment that our industry has seen in many years," said John J. Shea, vice chairman, president and chief executive officer of Spiegel, Inc. "To meet this challenge, we've taken a number of important steps that will allow us to fully capitalize on the gradually emerging economic recovery."
As previously announced, Spiegel is closing Honeybee's 17-store retail division as it refocuses on high potential, growth business segments.
Spiegel catalog and Eddie Bauer catalog will increase their value offerings throughout all mailings. In addition, Spiegel mailed a 300- page catalog, a collection of 13 focused specialty concepts, for the first time Feb. 18. The new book increases the size of the Spiegel offering for the season, while further penetrating specialty merchandise niches.
Spiegel catalog will also continue to place emphasis on new customer acquisition. To date in 1992, both traditional and nontraditional prospecting efforts have met with very positive response.
Eddie Bauer has completed a company-wide store and merchandise display enhancement program. This is the first step in a store renovation program intended to significantly improve the performance of the store base.
The Eddie Bauer Home Collection and a 33,000-square-foot Eddie Bauer Premier store were both successfully introduced in 1991. Both are being further expanded in 1992.
Spiegel, Inc. is the dominant multi-channel specialty retailer marketing fashionable apparel and home furnishings to discerning customers through catalogs and over 250 specialty retail stores. Spiegel's other businesses include Eddie Bauer, Eddie Bauer Home Collection, All Week Long, Crayola Kids and For You from Spiegel.
SPIEGEL, INC. FINANCIAL HIGHLIGHTS
(in thousands, except per share amounts)
Periods ended Three Months Twelve Months
Dec. 31 1991 1990 1991 1990
Net Sales and other revenues:
Net Sales $652,896 $710,211 $1,733,521 $1,785,265
Finance revenues 45,091 42,850 183,505 151,719
Other revenue 15,150 20,814 59,282 56,444
Total 713,137 773,875 1,976,308 1,993,428
Cost of sales and operating expenses:
Cost of sales, including
occupancy 426,749 463,330 1,173,922 1,172,079
Selling, general and
expenses 233,203 231,131 681,179 647,383
Nonrecurring charge 9,600 -- 10,800 --
Total 669,552 694,461 1,865,901 1,819,462
Operating income 43,585 79,414 110,407 173,966
Interest expense 19,527 20,777 79,614 73,426
Earnings before income
taxes 24,058 58,637 30,793 100,540
Income taxes 11,095 22,675 13,872 39,018
Net earnings $12,963 $35,962 $16,921 $61,522
Net earnings per
common share $0.25 $0.69 $0.33 $1.18
Average number of
outstanding 51,979,998 51,953,877 51,970,199 51,951,756
Certain current and prior year accounts have been reclassified to reconform to current presentation.
/CONTACT: Deborah Koopman, Spiegel (analysts), 708-218-7980; or Robert Longendyke, Spiegel (media), 708-218-7839/
(SPGLA) CO: Spiegel Inc. ST: Illinois IN: REA SU: ERN AH -- NY049 -- 0476 02/19/92 12:54 EST