Whitehall Q3 Sales Down, Losses Up

Whitehall Jewellers reported growing losses yesterday with a third quarterly loss in a row on flat sales since the start of the fiscal year while the ailing company, until recently under federal investigation, is trying to turn its fortune around and offer higher-end luxury goods.

 

The jewelry retailer reported third quarter sales of $63.3 million compared to $66.2 million for the third quarter last year. Net loss for the third fiscal quarter of 2004 was $8.3 million compared to net loss of $7.4 million for the same period a year ago.

For the nine-month period ended October 31, Whitehall reported flat sales of $208.7 million compared to $208.1 million last year.

Net loss was $15.2 million versus a net loss of $13.0 million for the same period a year ago.

Professional fees, incurred mostly in connection with the consolidated Capital Factors actions and the related investigations by the United States Attorney and SEC, amounted to approximately $4.7 million compared to approximately $2.6 million last year.

Third quarter results were negatively impacted by a lower income tax benefit. The effective tax rate used to determine the tax benefit for the third quarter was lower than in the first two quarters of the current fiscal year.

 “In July the company began offering price reductions on certain items that will not be part of the company's merchandise assortments going forward. Sales of this merchandise represented 22 percent of third quarter merchandise sales, which, because of the price reductions, had a negative effect on margin,” commented Chairman and CEO, Hugh M. Patinkin.