Vendor results mixed in third quarter
By Janice Chamberlain -- Kids Today, 1/1/2006
High Point— The suppliers on Kids Today's third-quarter 2005 vendor scorecard did it again — mixed the good news with the bad, making sure that there is no trend to identify. Of these 10 publicly held suppliers to the juvenile home furnishings market on the scorecard, half achieved revenue increases and four managed profit improvements.
RC2 once again led the way, managing double-digit percentage gains in revenues and net profits and a double digit return-on-revenues. The company, which designs, markets, and produces toys and infant care products, recorded a 29.3% increase in revenues and a 30.6% increase in net earnings, measured against the comparable 2004 period, and ROR of 12.8% for the third quarter of 2005. That's in addition to a second-quarter revenue surge of 56.8% and a 58.2% jump in net profits.
RC2 reported quarterly revenues of $142.6 million, up from $110.3 million in the comparable 2004 period, and net income of $18.3 million, growing from $14 million a year ago.
Next in line in revenue growth was furniture manufacturer and retailer Ethan Allen, up 9.1% to end the quarter with sales of $251.3 million, followed by Stanley Furniture's 8.6% increase to $85.6 million.
Taking the largest revenue tumble was furniture supplier La-Z-Boy, which reported third-quarter revenues of $454.6 million, off 12.7% from the year-earlier period. Also reporting revenue declines were furniture makers Chromcraft Revington, down 2%; Furniture Brands International, off 2.9%; Dorel, down 2.4%; and textiles vendor Crown Crafts, down 7.6%.
In terms of dollar growth in revenue, RC2 once again led the way, for the second consecutive quarter. RC2 added $32.3 million in revenues over the comparable period a year ago. Ethan Allen's $21 million increase put it in second place.
Last quarter, Ethan Allen posted the largest decrease in revenue dollars. In the third quarter, La-Z-Boy led the category, dropping $66.2 million compared with year-earlier revenues.
Collectively, the 10 companies on the scorecard reported revenues of $2.1 billion for the second quarter of 2005, slipping 1.4% from the comparable 2004 period.
Aggregate profits for the suppliers on the scorecard plummeted 48.8% to $42.7 million from $83.3 million in the third quarter of 2004.
Bassett Furniture was first in percentage net income growth, recording an earnings surge of 67.2% to $1.9 million in the latest quarter, measured against $1.1 million in the same period in 2004. Second place went to Crown Crafts. Net profits for the textiles vendor soared 36.4% to $1.2 million.
In terms of actual dollar growth in net earnings, RC2 finished in first place, adding a meager $4.3 million in profits in the third quarter.
As a group, gross margin percentage inched up 0.4%. Martha Stewart Living once again headed the list, for the third quarter in a row, with gross margin improving 13.7 percentage points from the comparable 2004 quarter.
Just three other companies — Bassett Furniture, Ethan Allen and Crown Crafts — saw gross margins improve.
Return-on-revenues varied from company to company, but as a group, companies saw their ROR score slip from 3.9% a year ago to 2% in the latest quarter.
| 2005 GM% | 2004 GM% | Pct. Pt chnge | |
| Martha Stewart Omnimedia1 | 42.8% | 29.1% | 13.7% |
| Bassett Furniture | 30.2 | 25.6 | 4.6 |
| Ethan Allen | 50.4 | 47.9 | 2.4 |
| Crown Crafts | 21.7 | 20.1 | 1.5 |
| Chromcraft Revington | 21.9 | 22.3 | -0.4 |
| Stanley Furniture | 23.9 | 24.6 | -0.7 |
| Dorel | 22.7 | 23.6 | -0.9 |
| La-Z-Boy | 22.0 | 23.0 | -1.0 |
| RC22 | 48.9 | 50.8 | -1.9 |
| Furniture Brands Intl. | 23.5 | 25.3 | -1.9 |
| COMPOSITE | 28.5% | 28.1% | 0.4% |
| 1. Costs for goods sold represents production, distribution and editorial costs. 2. Cost of goods sold includes depreciation expense of $3.7 million in the 2005 quarter. Source: Company reports |
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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. | 9/30 | $557.9 | $574.8 | -2.9% | $9.91 | $19.41 | -48.9% | 1.8% | 3.4% |
| La-Z-Boy | 10/29 | 454.6 | 520.8 | -12.7 | (6.4)2 | 8.92 | — | -1.4 | 1.7 |
| Dorel | 9/30 | 423.33 | 433.83 | -2.4 | 19.84 | 28.0 | -29.3 | 4.7 | 6.5 |
| Ethan Allen | 9/30 | 251.3 | 230.3 | 9.1 | 17.15 | 18.86 | -8.7 | 6.8 | 8.1 |
| RC27 | 9/30 | 142.6 | 110.3 | 29.3 | 18.38 | 14.0 | 30.6 | 12.8 | 12.7 |
| Stanley Furniture | 10/1 | 85.6 | 78.8 | 8.6 | 5.8 | 5.3 | 9.8 | 6.8 | 6.7 |
| Bassett Furniture | 8/27 | 82.7 | 78.6 | 5.3 | 1.99 | 1.19 | 67.2 | 2.3 | 1.4 |
| Martha Stewart Omnimedia | 9/30 | 40.9 | 38.7 | 5.7 | (26.1)10 | (15.0)10 | — | -63.8 | -38.7 |
| Chromcraft Revington | 10/1 | 40.8 | 41.7 | -2.0 | 1.2 | 2.0 | -39.8 | 2.9 | 4.8 |
| Crown Crafts | 10/2 | 21.3 | 23.0 | -7.6 | 1.2 | 0.8 | 36.4 | 5.4 | 3.7 |
| TOTAL | $2,101.1 | $2,130.8 | -1.4% | $42.7 | $83.3 | -48.8% | 2.0% | 3.9% | |
| Note: Figures in parentheses are losses or declines. 1. Includes after-tax restructuring charges of $2.8 million in the 2005 quarter and $1.6 million in the 2004 quarter. The 2005 quarter also includes a $961,000 after-tax charge for severance costs. 2. Includes pretax restructuring charges of $7.8 million in the 2005 quarter and $749,000 in the 2004 quarter. The 2005 quarter also includes a $3.6 million income tax benefit. 3. Includes licensing and commission income of $5 million in the 2005 quarter and $5.4 million in the 2004 quarter. 4. Includes $6.4 million pretax restructuring charge. 5. Includes a $4.2 million pretax restructuring and impairment charge in the 2005 quarter. 6. Includes a $167,000 pretax restructuring and impairment credit in the 2004 quarter. 7. Includes the results of Playing Mantis from its June 2004 acquisition. 8. Includes a $2 million pretax gain on the sale of assets. 9. Includes pretax restructuring and asset impairment charges of $1.7 million in the 2005 quarter and $1.2 million in the 2004 quarter and non-operating income of $2.3 million in the 2005 quarter and $1.6 million in the 2004 quarter. 10. Includes net losses from discontinued operations of $122,000 in the 2005 quarter and $129,000 in the 2004 quarter. The 2004 quarter also includes an $806,000 income tax benefit. Source: Company reports and Kids Today market research. |
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