Broadway Stores Return to Profitability in 4th Quarter : Earnings: The results fail to meet Wall Street’s expectations, though, and the store chain stayed in the red for the year.

Broadway Stores managed to return to profitability in its benchmark fourth quarter, but the results reported Tuesday fell short of Wall Street’s expectations, and the department store chain remained in the red for the year.

The Los Angeles-based company, which emerged from bankruptcy in 1992, posted fourth-quarter earnings of $11.9 million, contrasted with a loss of $18 million for the same period a year earlier.

Per-share earnings of 25 cents were as much as one-third below analysts’ forecasts, reflecting disappointing holiday sales. It was the latest indication that the company, known as Carter Hawley Hale Stores until last year, is not yet in a turnaround.

For the 12 months ended Jan. 28, losses narrowed to $37.4 million from $95.9 million the year before. The previous year’s loss was inflated by a $45-million charge for corporate restructuring and losses incurred from the Northridge earthquake in January, 1994, the final month of that fiscal year.

Sales at stores open at least one year rose 3.1% for all of 1994. Sales for the fourth quarter were $723.8 million, up from $705.6 million for that quarter the previous year.

However, sales for that quarter--important because they reflect performance during the critical holiday shopping season--were lower than expected, said John Haeckel, Broadway executive vice president and chief financial officer.

“A lot of customers stayed home,” Haeckel said. “It was a tough Christmas for department stores.”

Though sales of men’s apparel and home furnishings were fairly strong at Broadway Stores during the quarter, the chain struggled, as did many department store operators, with weak demand for women’s apparel.

Lackluster demand continues to trouble retailers. U.S. retail sales declined unexpectedly in February, according to a report Tuesday by the U.S. Commerce Department. The 0.5% drop is the first monthly decline in nearly a year.

Considering the current consumer climate, Broadway Stores is unlikely to make dramatic sales and earnings gains in 1995, said Thomas Friedberg, an analyst at Genesis Merchant Group in San Francisco.

“Unless the company has an exceptional Christmas, it will have another year in the red and perhaps become profitable in 1996,” Friedberg said. “In light of the difficult retail environment, the company’s performance is OK. However, a full recovery will take more time.”

Hobbled by debt and weakened by California’s recession, the company filed for bankruptcy reorganization in 1991. David Dworkin, president and chief executive, was hired about two years ago to engineer a turnaround.

“The performance is not a reflection on Dworkin,” said Kurt Barnard, a New Jersey-based retail economist. “It’s a result of the extraordinarily difficult environment in California. Broadway has had to deal with cutthroat competition. However, they are also at a disadvantage because their stores don’t look very good.”

To address that problem, Broadway spent $110 million to remodel 27 of its 83 stores in 1994, and had planned to spend another $100 million on remodeling in 1995. But it recently announced it would scale back those plans as it reviews how such spending affects sales.

Barnard said the shift indicates that the remodeling failed to have the desired sales-enhancing effect.

“Even if the remodeling works, it may take more time for it to create any sales surge,” he said.

The company now plans to spend about $40 million on store remodeling. With that outlay, the retailer expects to refurbish eight to 10 stores and replace fixtures in about 40 others.

Company executives say the large-scale remodelings of 1994 created some disruptions, hurting the sales environment. However, strong sales of the C.C. Courtenay line of women’s wear has encouraged Broadway executives. The line is one of several private-label products the company introduced in 1994. It hopes that other, new private labels will generate more consumer interest this year.