Birks & Mayors Net Sales Up, Same-Store Sales Down

By JCK Online Staff -- JCK Online, 2/14/2008 10:34:00 AM

Luxury jeweler Birks & Mayors Inc. said Wednesday that third-quarter net sales increased 6.4 percent to $122.6 million year-over-year. Meanwhile, same-store sales decreased 6 percent for the period, ended Dec. 29.

Net income for the Montreal, Canada-based jewelry chain was $12.7 million, as compared to net income of $19.6 million in the prior-year’s third quarter. Included in net income were currency translation benefits of approximately $0.8 million.

Net sales for the retailer (with stores in the U.S. and Canada) for the 39-week period ended Dec. 29, increased 4.9 percent to $250.5 million year-over-year. Excluding the impact of $4.3 million of net sales related to the one extra selling week in the first quarter of the prior year, net sales rose 6.8 percent. Sane-store sales decreased 1 percent for the period.

Net income for the period was $7.2 million, compared to net income of $15 million in the prior-year period. The company noted that the prior year’s results included the benefit of approximately $900,000 of net earnings before income taxes associated with the extra week in the first quarter of fiscal 2007.

Included in net income were currency translation benefits of approximately $0.7 million for the nine month period.

“Our third quarter results reflected the impact of disappointing holiday sales that were reported last month," said Thomas A. Andruskevich, Birks & Mayors president and chief executive officer. "However, we now know that U.S. retail sales in December 2007 were extremely soft for most retailers, and in particular for the jewelry sector and especially in Florida. We anticipate that the abrupt change in consumer behavior that occurred in our third fiscal quarter and the related pullback in consumer spending in both our Canadian and U.S. markets will continue well into 2008. Therefore, we will adapt our business strategies and plans accordingly.”

The company said it continues to expect full-year net sales to increase in the mid-single-digit range and anticipates achieving positive earnings before taxes for the fiscal 2008 year, however, at a level that will be significantly below the prior fiscal year.

"The luxury retail market continues to be very competitive and could negatively impact the company’s results," it said in a statement. "In addition, factors such as: a challenging economy, a decrease in the general level of consumer confidence and consumer spending, the impact of the strong Canadian currency’s impact on consumer shopping patterns in Canada, tourism and mall traffic, the impact of weakness in the real estate markets, especially in the state of Florida, the volatility of the equity markets and its impact on consumer spending, interest rates, and commodity prices may have an important influence on the realization of the company’s sales and net income plans for fiscal 2008."

Birks & Mayors operates 71 luxury jewelry stores in the United States and Canada, including 38 Birks stores across most major metropolitan markets in Canada and 31 stores Mayors stores in Florida and Georgia, as well as two retail locations in Calgary and Vancouver under the Brinkhaus brand.