Birks & Mayors Q4 and Full-Year Results

Birks & Mayors said Tuesday that net sales for the fourth quarter increased 16 percent to $64.2 million, year-over-year. Same-store sales increased 2 percent for the period, following a 3 percent increase in the prior year period.

However, the company reported an operating loss of $7.7 million for the period, as compared to an operating loss of $2.4 million in the prior year period. The loss before income taxes was $10.2 million, as compared to a loss before income taxes of $4.9 million in the prior year period.

Net income was $3.2 million for the quarter ended March 29, said the Montreal-based company operates 70 luxury jewelry stores in Canada, Florida, and Georgia. In Canada it operates under the Birks brand name and in the U.S. it operates under the Mayors brand name.

Net sales for the company’s 2008 fiscal year increased 7 percent to $314.7 million, year-over-year. Same-store sales for the period were flat, following a 4 percent increase increase in the prior year period.

Operating income totaled $11.3 million, or 3.6 percent of net sales for the period ended March 29, as compared to $20.4 million, or 6.9 percent of net sales in the prior year period. Income before income taxes was $638,000, as compared to $10.3 million in the prior year
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Net income was $10.4 million, compared to $13.1 million in the prior year period, the company said.

“We were disappointed with our fiscal 2008 results, which reflected the business realities associated with operating in a challenging economic environment, an abrupt decrease in consumer confidence and the resulting decreases in customer traffic in both our U.S. and Canadian regions,” said Tom Andruskevich, president and chief executive officer of Birks & Mayors. “As a result, we reported flat comparable store sales with decreased operating results for Fiscal 2008.

He added, “Nevertheless, the year included notable progress toward advancing our brand and retail store expansion goals. We intensified our Birks branded product offerings, opened two new Mayors locations and successfully integrated the acquisition of Brinkhaus adding a compelling retail brand with a strong heritage and significant market strength to our company.”

The Company said it expects fiscal 2009 net sales to increase in the low single digit percentage range. Gross margins are projected to increase, albeit very modestly. Capital expenditures are projected between $6 and $8 million.

“The luxury retail market continues to be very competitive and could negatively impact our results, the company said. “In addition, factors such as: rising interest rates, the general level of consumer confidence and resulting changes in consumer spending patterns, fluctuations in foreign exchange rates, tourism, and mall traffic, the impact of changes in the real estate markets, (especially in the state of Florida), the equity markets, commodity prices and severe whether conditions may have an important influence on the realization of the company’s sales, gross margin and net income plans for fiscal 2009. Actual results could differ materially from our projections.”