Cost Plus 1Q Sales, Losses Increase

May 18, 2006  by in UnCategorized   

By Home Furnishings Business in Casual Furniture on May 2006 Casual home furnishings specialty retailer Cost Plus reported a first-quarter 2006 loss of $4.8 million on sales of $213 million.

While sales for the period ended April 29 were up 6.5 percent over first-quarter 2005, the loss in the 2006 increased from the prior year’s loss of $138,000.

Same-store sales for the quarter decreased 4.3 percent, compared to a 1.9 percent decrease for the first quarter of 2005.

Oakland, Calif.-based Cost Plus, parent of World Market, indicated that weaker-than-expected customer traffic and lower sales of upholstered and outdoor furniture were the primary reasons for the comparable store sales decrease. A 260 basis-point decrease in merchandise margin compared to last year contributed to the shortfall in earnings from an earlier guidance. A longer Easter selling season leading to a higher mix of consumable goods in total net sales, and higher markdowns in furniture and textiles had a negative impact on merchandise margin.

Cost Plus opened seven stores and closed two stores in the first quarter. As of Thursday, the company operated 274 stores in 34 states, compared to 240 stores in 30 states at the same time last year.

For second-quarter 2006, Cost Plus expects total sales between $212 million and $221 million versus $202.8 million in the prior-year period; and a net loss between $6.7 million and $8.9 million versus $1.5 million net income in second-quarter 2005.

The company also plans to open two new stores in the second quarter versus 10 stores opened and two closed in last year’s period; and expects a same store sales decrease of 4 percent to flat versus a decrease of 1.7 percent in the prior year second quarter.