Tuesday Morning (TUES) Misses Q4 EPS by 11c

Tuesday Morning (NASDAQ: TUES) reported Q4 EPS of ($0.39), $0.11 worse than the analyst estimate of ($0.28). Revenue for the quarter came in at $223.6 million versus the consensus estimate of $226.84 million.

• Fourth quarter comparable store sales increased 1.8%; the Company estimates the increase would have been approximately 2.5% when adjusted for the Easter timing shift
• Reduced ending inventory level by $20 million compared to the prior year
• Reduced outstanding revolver borrowings by $10 million compared to the third quarter of fiscal 2017

Steve Becker, Chief Executive Officer said, “Our distribution network is currently operating effectively and we believe we are well prepared for peak. This quarter, our comparable sales were up 1.8%, and after adjusting for the Easter timing shift, we estimate the comp increase would have been approximately 2.5%. We also made progress against our strategic priorities – we reduced our inventory levels versus last year by $20 million, we reduced our bank line usage by $10 million compared to the prior quarter, we implemented an organizational restructuring, we continued to improve our supply chain efficiency while advancing our real estate strategy and are preparing to launch our new Tuesday Morning brand initiative. It is also important to note that our fourth quarter operating loss was significantly burdened by the non-cash impact of previously incurred and capitalized supply chain costs.”

Mr. Becker continued, “Looking to fiscal 2018, we expect to see comparable store sales in the range of 2% to 5%. We currently project that EBITDA will improve significantly year over year in spite of the amortization of the remaining portion of the elevated supply chain costs that we experienced in fiscal 2017. We remain committed to funding our growth through internally generated cash flow and working capital management as we continue to see great prospects for the future of Tuesday Morning.”

For earnings history and earnings-related data on Tuesday Morning (TUES) click here.

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