RC2 top revenue gainer; some struggle
By Janice Chamberlain -- Kids Today, 9/1/2005
High Point— It is tempting to call Kids Today's second-quarter 2005 vendor scorecard the Scorecard of Mixed Results. Of the 10 publicly held suppliers to the juvenile home furnishings market on the scorecard, seven achieved revenue increases and six managed profit improvements.
Special honors go to RC2, which recorded a 56.8% revenue increase and a 58.2% net income gain in its quarter ended June 30. That's on top of a first-quarter revenue jump of 57.4% paired with a 166.1% surge in profits.
RC2 reported second-quarter revenues of $108.8 million, up from $69.4 million in the comparable 2004 period, and net income of $9.8 million, growing from $6.2 million a year ago.
Coming in second in revenue percentage growth was Stanley Furniture, up 15.8% to finish the quarter with sales of $83.6 million, followed by Dorel's 6.4% increase to $435 million.
Going in the other direction was textiles supplier Crown Crafts, which recorded second-quarter revenues of $13.7 million, off 19.2% from the year-earlier period. Also reporting revenue declines were furniture makers Ethan Allen, off 1.8%, and La-Z-Boy, down 0.8%.
In terms of dollar growth in revenue, RC2 once again led the way, adding $39.4 million in revenues over the comparable 2004 period. Not far behind was Dorel, which increased revenues by $26.1 million. Although based in Canada, Dorel reports in U.S. dollars.
The largest decrease in revenue dollars was posted by Ethan Allen, which saw sales slip by $4.3 million, followed by La-Z-Boy's $3.6 million decrease.
Collectively, the 10 companies recorded revenues of $2.1 billion for the second quarter of 2005, up 3.5% over revenues of $2 billion for the comparable 2004 period.
Despite a revenue decrease, La-Z-Boy increased net profit dollars by $6.7 million, topping the other vendors on the scorecard. Next in line was Dorel's $3.8 million gain, then came RC2's $3.6 million addition.
Leading the way in profit percentage gain was RC2's 58.2% increase to $9.8 million. Second-place honors went to Ethan Allen, which recorded a 45% gain in net earnings.
On the other end of the scale was Martha Stewart Living Omnimedia, which nearly doubled its quarterly net loss from $17.8 million a year ago to $33.5 million in the latest quarter.
Aggregate profits for the suppliers on the Vendor Scorecard dropped 6.7% to $39 million from $41.8 million in the second quarter of 2004.
As a group, gross margin percentage gained 0.7% percentage points, measured against a 0.5% decline in the first quarter of 2005. Martha Steward Living headed the list for the second quarter in a row, with gross margin improving 14.9% from the second quarter of 2005.
Just three companies — Stanley Furniture, Furniture Brands International and RC2 — saw gross margins slip.
Return-on-revenues varied from company to company but, as a group, companies saw their ROR score slip from 2.1% a year ago to 1.9% in the latest quarter.
RC2's 9% ROR led the way in the latest quarter, with Ethan Allen's 8.1% close behind. Trailing the pack was Martha Stewart Living, which posted an ROR score of a negative 72.9%.
Kids Today's second-quarter scorecard is based on the financial results of 10 publicly traded companies with fiscal quarters ending from May 28 to July 30, 2005. At press time, Culp had not reported second-quarter results. Dan River has emerged from bankruptcy, but no longer releases its quarterly earnings.
| 2005 GM% | 2004 GM% | Pct. chnge | |
| Martha Stewart Omnimedia1 | 45.9% | 31.0% | 14.9% |
| Ethan Allen | 49.9 | 47.5 | 2.4 |
| Bassett Furniture | 26.7 | 25.4 | 1.3 |
| Crown Crafts | 21.7 | 20.5 | 1.2 |
| La-Z-Boy2 | 23.6 | 22.7 | 0.9 |
| Chromcraft Revington | 23.6 | 23.2 | 0.4 |
| Dorel | 22.3 | 22.2 | 0.1 |
| Stanley Furniture | 24.7 | 25.3 | -0.6 |
| Furniture Brands Intl. | 24.5 | 25.6 | -1.1 |
| RC2 | 48.5 | 52.9 | -4.5 |
| Composite | 28.5% | 27.9% | 0.7% |
| 1. Cost of goods sold represents production, distribution and editorial costs. 2. Excludes a $10.4 million pretax restructuring charge. Source: Company reports and Kids Today market research. |
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| revenue in millions | net income in millions | return on revenues | |||||||
| Retailer | Qtr. ended | 2005 | 2004 | change | 2005 | 2004 | Change | 2005 | 2004 |
| Furniture Brands Intl. | 6/30 | $593.8 | $593.1 | 0.1% | $9.6 | $16.6 | -42.2% | 1.6% | 2.8% |
| La-Z-Boy | 7/30 | 451.5 | 455.1 | -0.8 | 3.2 | (3.5)1 | — | 0.7 | -0.8 |
| Dorel | 6/30 | 435.02 | 408.92 | 6.4 | 21.7 | 17.9 | 21.4 | 5.0 | 4.4 |
| Ethan Allen3 | 6/30 | 242.3 | 246.6 | -1.8 | 19.5 | 13.54 | 45.0 | 8.1 | 5.5 |
| RC25 | 6/30 | 108.8 | 69.4 | 56.8 | 9.8 | 6.2 | 58.2 | 9.0 | 8.9 |
| Stanley Furniture | 7/2 | 83.6 | 72.2 | 15.8 | 5.8 | 5.2 | 11.8 | 7.0 | 7.2 |
| Bassett Furniture | 5/28 | 83.1 | 80.4 | 3.4 | 1.06 | 1.9 | -44.5 | 1.3 | 2.3 |
| Martha Stewart Omnimedia | 6/30 | 46.0 | 44.1 | 4.3 | (33.5)7 | (17.8)7 | — | -72.9 | -40.4 |
| Chromcraft Revington | 7/2 | 43.4 | 42.6 | 1.8 | 2.1 | 2.0 | 2.6 | 4.8 | 4.8 |
| Crown Crafts | 7/3 | 13.7 | 16.9 | -19.2 | (0.3) | (0.1) | — | -2.0 | -0.6 |
| TOTAL | $2,101.0 | $2,029.3 | 3.5% | $39.0 | $41.8 | -6.7% | 1.9% | 2.1% | |
| Note: Figures in parentheses are losses or declines. 1. Includes a $10.4 million pretax restructuring charge, a $2.2 million income tax benefit and $129,000 in net income from discontinued operations. 2. Includes licensing and commission income of $5.2 million in the 2005 quarter and $4.7 million in the 2004 quarter. 3. 2004 figures are restated. 4. Includes a $12.8 million pretax restructuring and impairment charge. 5. Includes the results of Playing Mantis from its June 2004 acquisition. 6. Includes a $2.5 million pretax impaired asset charge. 7. Includes pretax non-cash equity compensation charges of $21.3 million in the 2005 quarter and $1 million in the 2004 quarter, and net losses from discontinued operations of $120,000 in the 2005 quarter and $127,000 in the 2004 quarter. Source: Company reports and Kids Today market research |
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