Whitehall Jewellers reports a 50% gain in fourth quarter profits

Whitehall Jewellers, Inc., Chicago, on Tuesday released its fiscal fourth-quarter and year-end results.

The company reported that net income was $15.8 million, or $1.07 per diluted share, in its fourth fiscal quarter, ending January 31, versus $10.1 million, or 69 cents per diluted share, a year ago. Income from operations increased 45% to $26 million compared to $17.9 million in the fourth fiscal quarter of 2001. Comparable store sales decreased 5.4% during the fourth fiscal quarter ended January 31 versus a comp store sales decrease of 8.1% in the prior year fourth quarter. Net sales dropped 2.8% to $130.5 million, versus $134.3 million for the fourth fiscal quarter of 2000.

For the fiscal year ended January 31, net income was $10.1 million or 69 cents per diluted share compared to net income before cumulative effect for accounting change of $10.4 million, or 65 cents per diluted share, for the fiscal year ended January 31, 2001. Fiscal 2001 operating income increased to $22.4 million or 6.6% of sales, versus $22.3 million for the fiscal year ended January 31, 2001. Comparable store sales decreased 10.7% for the fiscal year ended January 31, 2002, versus a comparable store sales decrease of 1.7% in fiscal 2000. Net sales for the fiscal year ended January 31, 2002 decreased 4.5% to $338.9 million, versus $355.1 million a year ago.

As previously disclosed, on February 1, 2001, the company eliminated two lines of business, outside trade-ins and certain break-up sales which did not meet its profit requirements. Whitehall calculated that these two lines of business constituted approximately 5% of store sales in fiscal year 2000.

“We are extremely pleased with our over 50% profit improvement in the fourth quarter and the progress we made during a difficult 2001, Hugh M. Patinkin, chairman and CEO said in a statement. “Over a year ago we set forth a program to re-engineer numerous aspects of our business with the goal of increasing operational control and improving our profit productivity. In the context of a weak economy and lower sales during 2001 we made great strides in reducing costs, improving margins, reducing owned inventory and increasing cash flow.”

Patinkin continued, “We are also very pleased with our recent sales trends. Since February 1, comparable sales have been up in the low to mid single digit range. As a result, we expect improved fiscal 2002 earnings per share in the range of $0.95 to $1.05. We expect a reduced first quarter loss of $0.02 to $0.05 per share versus a loss of $0.11 per share in the first quarter of 2001.

Whitehall Jewellers, Inc. is a leading national specialty retailer of fine jewelry, currently operating 366 stores in 38 states. The Company operates stores in shopping malls under the names Whitehall Co. Jewellers, Lundstrom Jewelers, and Marks Bros. Jewelers.