HomeBase Reports Fiscal Second-Quarter Profit Down 43%

Citing a drop in same-store sales and the one-time cost of restructuring and spinning off a subsidiary, HomeBase Inc. said Tuesday that profit for its fiscal 1998 second quarter fell 43% to $14.6 million, or 38 cents a share, from $25.6 million, or 71 cents a share, a year earlier.

Sales for the period ended July 26 fell 1% to $420 million from $424 million, as same-store sales declined by 3.1%.

Same-store sales is the retail industry’s way of measuring year-to-year performance by eliminating the contributions of newly built or acquired facilities and comparing revenue from each store to the same store’s prior year sales.

The home improvement warehouse chain, formerly Waban Inc., said profits from continuing operations remained flat at $11.2 million for the quarter.

For the first half, HomeBase reported a profit of $25.4 million, or 70 cents a share, down 27% from $35.1 million, or 99 cents a share, a year earlier. Sales for the first half rose slightly, to $780.6 million from $776.5 million, but same-store sales declined by 2.2%.

The company recently spun off its BJ’s Wholesale Club Inc. unit and took a one-time charge of $8.7 million in the second quarter relating to the retirement of its senior debt.

Additionally, company directors approved the termination of the Waban Inc. retirement plan at the end of the second quarter, and HomeBase officials said that will result in an after-tax charge of about $500,000 in the fourth quarter of the company’s present fiscal year or in the first quarter of its fiscal 1999.

HomeBase stock closed at $7.88 a share in heavy New York Stock Exchange trading Tuesday, up 6 cents for the day.