As expected, Carter Hawley Hale Stores on Thursday reported a $24.2-million loss for the fourth quarter, compared to net income of $18.9 million in the year-ago quarter, primarily because of special charges resulting from the company's pending restructuring.
But before accounting for those charges, operating earnings for the quarter jumped to $65.95 million from $23.97 million. Sales increased to $1.342 billion from $1.317 billion.
Carter Hawley Hale's business last year was "excellent, maybe even better than that," and the Los Angeles company's department stores had better earnings growth than its specialty stores, Chairman and Chief Executive Philip M. Hawley commented.
"We had a very, very good year," Hawley said in an interview. "We're really getting payout from all the strategic changes we made in the last five years."
"I think department stores are the sleeping giants in retailing," Hawley said. "While both (department stores and specialty stores) are growing well, I think you can see what's happening to our department stores."
For the year ended Jan. 31, Carter Hawley posted net income of $4.2 million, compared to $48 million in the previous fiscal year. Operating earnings were $140.2 million, compared to $72.6 million. Sales for the year were $4.08 billion, compared to the previous year's $3.98 billion, which included some operations that were subsequently sold.
Hawley attributed the company's improved operating results to higher profit margins from the increased use of private-label merchandise, decreased expenses and benefits from the company's computerized systems and its customer service programs.
In the most recent fiscal year, Carter Hawley's department stores recorded a 20% increase in operating profits while the specialty stores saw their operating income rise 15%, Hawley said.
According to preliminary figures, the department stores had about $172 million in operating earnings, compared to $143.6 million in the previous fiscal year, Hawley said. Specialty stores' operating income rose to more than $128.5 million from $111.4 million, he said.
The department stores' sales, based on stores open at least a year, rose 2.2% during the year. Specialty store sales were up 5.9% at stores open at least a year.