Whitehall Jewellers Posts Q3 Losses, But Share Gains
December 23, 03
Embattled jewelry retailer Whitehall Jewellers posted yesterday increased third quarter losses, amid legal woes and turbulent times. Surprising, however is the positive response in the market as share prices jumped $1.33 (15 percent) to $10.17.
The company reported a net loss for the third fiscal quarter of $7.4 million compared to a net loss of $5.1 million for the same period last year and sales of $66.2 million compared to $61.8 million for the third quarter 2002.
For the nine-month period ended October 31, 2003, the company reported sales of $208.1 million, compared to $212.7 million last year. The net loss was $13.0 million versus a net loss of $4.8 million for the same period a year ago. Comparable store sales decreased 4.5% in the nine-month period.
The retailer blamed expenses related to the Capital Factors lawsuit and related SEC and US Attorney investigations to the tune of approximately $560,000 and another $2.37 million in a change in the estimated annual income tax rate, a sales tax accrual adjustment, higher than estimated insurance costs and increased advertising expenses.
Hugh M. Patinkin, Chairman and CEO, commented, “Although the third quarter was a challenging period for the company, we are pleased that total and comparable store sales experienced solid increases in the quarter, driven largely by the new sales initiatives announced earlier this year.
“Further evidence that our sales programs have firmly taken hold is an increase in November comparable store sales of 9.1 percent, primarily due to the success of a new two-day event. Sales growth has continued in December, as strong holiday season demand has generated comparable store sales that are up in the mid-single digits as a percentage through December 21st.”
Regarding the investigations Patinkin expects legal fees to mount. “We continue to cooperate fully with the SEC and US Attorney in connection with their respective investigations and are taking significant steps to enhance our internal controls,” he adds.