Finlay Enterprises, Inc., New York, which sells jewelry in its stores and at leased counters in department stores, said on Thursday its quarterly earnings fell 15.5% due to weaker sales in the soft retailing environment.
The company reported net income of $24.6 million, or $2.44 per share, for the fourth quarter ended on Feb. 2, compared with $29.1 million, or $2.77 per share, a year earlier.
Sales fell nearly 8% to $388.1 million from $420.5 million. The company said sales would have dropped 6.2% if the extra week in the year-earlier quarter were excluded.
Finlay said it expects sales to improve in the second half of this year, with full-year earnings per share rising 5% to 10% to $2.25 to $2.35 after elimination of goodwill amortization.
For the year, which also ended February 2, 2002, Finlay reported total sales of $952.8 million compared to $1 billion for the fifty-three week period in fiscal 2000. Excluding sales from the extra week last year, total sales decreased 4.1%. Comparable department sales decreased 3% for the current fiscal year compared to an increase of 2.1% for fiscal 2000.
The company reported income from operations before depreciation and amortization expenses (EBITDA) for the fiscal year of $79.3 million compared to $93.8 million in the prior year. Operating income totaled $59.2 million for the current fiscal year.
The Company reported net income for the fiscal year of $18.5 million, or $1.80 per diluted share, compared to last year’s net income of $26.5 million, or $2.52 per diluted share.
“2001 was a challenging year for retailers across the spectrum, Arthur E. Reiner,” Chairman and CEO of Finlay, said in a statement. “However, our better-than-expected sales performance in the important fourth quarter coupled with our focus on driving down operating expenses enabled us to exceed our earlier profit expectations for the fourth quarter.”
Reiner adds that the company expects a “challenging retail environment through the first half of fiscal 2002, with an improvement beginning in the second half. Therefore, we expect earnings per share in fiscal 2002 to increase approximately 5% to 10%, excluding the positive impact of the accounting standard eliminating goodwill amortization.”