Wednesday,consumer goods retailer 99 Cents Only Stores (NDN), reported a swing to profit for the third quarter from a loss last year, on lower operating expenses as well as higher sales for the period. Comparable store sales for the quarter increased to 2.3% compared with a year-ago.
The City of Commerce, California based company's second quarter net income was $9.6 million or $0.14 per share, compared with a loss of $9.4 million or $0.13 per share in the prior year period.
On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the second quarter rose 2.2% to $324.7 million from $317.8 million in the year-ago period. Ten analysts expected revenues of $323.82 million for the quarter.
Same-store sales for the second quarter increased 2.3% from the prior-year quarter.
Retail operations yielded higher revenues of $314.82 million, up from $307.4 million a year ago. Wholesale operations decline to $9.87 million from $10.37 million last year.
Non-Texas retail net sales increased 4.1% year-on-year to $287.8 million and same-store sales increased 0.9%, while Texas operations contributed 12.9% lesser at $27 million than the year-ago period, hurt by the closure of 17 stores. Same-store sales in Texas operations, however, increased 19.8% from last year.
Gross margins improved 130 basis points of sales to 39.9% from 38.6% last year, as cost of sales remained flat year-over-year at $195.09 million.
Results for the recently ended quarter were favorably impacted by a decline in total SG&A expenses at $114.61 million, compared to $134.46 million last year, led by lower operating expenses at $107.73 million compared with $125.77 million in the comparable period one-year ago.
The company posted an operating income of $14.98 million compared with a loss of $11.77 million in the year-ago period. Operating margins improved to 4.6% from 3.7%, or 830 basis points from the prior year.
For the first half of fiscal 2010, the company reported a net income of $19.11 million or $0.28 per share compared with a loss of $10.93 million or $0.16 per share in the same period last year. Total net sales improved 5.5% to $656.8 million from $622.7 million in the previous year.
Looking forward to the third quarter of fiscal 2010, the company expects positive same-store sales in the low single digits. The company expects to exceed its previously announced fiscal 2012 target for earnings before taxes of 4.7% by 30-60 basis points for the current fiscal year.
NDN finished Wednesday's regular trading sessions up 0.75% or 9 cents, at $12.04 on a volume of 1.06 million shares.
In after-hours trading, shares lost 19 cents or 1.58%, trading at $11.85.
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