OAKLAND, Calif.–Cost Plus brought to a close its first profitable fiscal year since 2005 by reporting net income of $28.5 million, up 35 percent from the fourth quarter of last year.
That increase brought its bottom-line total for the year to $2.9 million, as compared to a net loss of $63.3 million in the prior year. Positive developments in all the key financial measures helped restore the retailer to profitability. In the fourth quarter, which ended on Jan. 29, net sales rose 7.1 percent to $341.6 million, including a 7.7 percent gain in same-store sales. For the fiscal year, net sales finished at $916.6 million, 5.7 percent ahead of the previous fiscal year and including a 7.2 percent pickup in same-store sales.
Cost Plus also logged in a powerful 570 basis-point gain in its gross margin, to 33.1 percent, which was driven by a strong performance in non-furniture home categories, reduced markdowns and higher initial markups, according to a company statement. Selling, general and administrative expenses rose 3.6 percent on a dollar basis, but fell 80 basis points as a percentage of net sales to 23.4 percent.
Citing Cost Plus’ turnaround initiatives, Barry Feld, president and CEO, said, “Now that we have a re-established a sustainable business model, we will continue to execute on our core competencies and begin to focus on initiatives that will resume the company’s growth.”