99 Cents Only ends Q3 with long-term debt of $915.5 million; new team focused on improvements

By Lisa Kerner

Charlotte, N.C., Dec. 14 – 99 Cents Only Stores LLC ended its third quarter on Oct. 30 with cash of $2.6 million and long-term debt, net of current portion, of about $915.5 million.

This compares to $12.5 million and $901 million at Jan. 30, according to the company’s earnings news release.

Net sales were up 2.8% quarter over quarter at $491.5 million, said president and chief executive officer Geoffrey Covert during the company’s earnings call on Monday. Covert took over the CEO job on Sept. 11.

Chief financial officer Felicia Thornton joined the company about six weeks ago.

“With a new senior executive team now in place, we are aggressively identifying the issues that have led to our disappointing results in recent quarters,” Covert said.

99 Cents is “focused on improving the customer experience, reducing shrink and scrap, enhancing inventory management practices and getting the right products to the right stores at the right time,” said Covert.

Gross margin, as a percentage of sales, was down 460 basis points from the third quarter at 26.8%. The decline was attributed to the negative impact of an increase in cost of goods sold and higher shrink and scrap.

Third-quarter net loss was $152.6 million, compared to $3.8 million for the third quarter of fiscal 2015.

Adjusted EBITDA was $5.1 million for the quarter, compared $27.1 million in the third quarter of fiscal 2015.

For the first nine months of fiscal 2016, the company’ net sales increased 5.1% year over year $15 billion. The company had a net loss of about $230 million compared to net income of $7.8 million. Adjusted EBITDA was $37 million in the first nine months of fiscal 2016, compared to $109 million for the first nine months of fiscal 2015.

The company did not open any new stores during the third quarter, but did open two stores subsequent to quarter end for a total store count of 391.

99 Cents Only is a City of Commerce, Calif.-based operator of extreme-value retail stores.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.