Stanley Furniture forecasts lower sales, bigger loss than in second quarter
Part of loss due to transition of youth line from Vietnam to North Carolina
Furniture Today -- Kids Today, 9/17/2009 10:55:00 AM
STANLEYTOWN, Va. — Case goods major Stanley Furniture said Tuesday that third-quarter sales will be lower than the second quarter, while its operating loss will be larger.
The company, which plans to announce complete third-quarter financial results Oct. 14, didn’t provide specific estimates. However, it earlier reported second-quarter sales of $42.3 million and an operating loss of $4.08 million.
Stanley said the higher operating loss stems from the temporary disruption as its shifts production of its Young America line to its Robbinsville, N.C., plant.
About one-third of the line is now made in China and Vietnam, but the entire line will be produced in Robbinsville beginning Nov. 16.
“While near term this move will be disruptive to our operating results, we expect the long-term impact to be very beneficial as we clearly distinguish our Young America product line from competition in the marketplace,” said Glenn Prillaman, president and chief operating officer. “This does not impact our blended strategy of combining domestic manufacturing with global sourcing for adult product lines.”
Prillaman also said the lower sales volume and an estimated $900,000 of accelerated depreciation from a warehouse consolidation also will hurt its results.
“We believe our sales performance is indicative of consumer demand for residential wood furniture in our price segment,” added Albert Prillaman, chairman and CEO. “Demand for better goods continues to bump along at very depressed levels.”
In the third quarter of last year, Stanley had sales of $54.5 million and an operating loss of $5.62 million.
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