Excluding an impairment charge, Bob's Stores posted a $3 million operating profit for the fourth quarter versus a loss in the prior-year quarter. Sales advanced 6.7% to $96 million from $90 million. Comps climbed 10%. With the after-tax charge of $5 million, or one cent a share, the 32-unit chain lost $4.4 million versus a loss of $5.9 million a year ago.
The charge relates to certain long-lived and intangible assets at Bob's in excess of recorded carrying values. Still, its parent, TJX Cos., remains optimistic about its recent progress.
“We learned a lot in terms of leveraging marketing in the fourth quarter at Bob's, and we will continue this strategy into 2008,” said Carol Meyrowitz, TJX's president and CEO, on a conference call with analysts. “In general, we have said before that we needed to see Bob's Stores post comp on top of comp. They have begun to do this, and we will continue to evaluate the business.”
For the full year, Bob's nearly cut its loss in half before the charge. Including the charge, the operating loss was virtually flat, at $17.4 million versus $17.36 million in 2006. Revenues increased 3.3% to $310.4 million from $300.6 million in the prior year.
For 2009, Bob's sales are expected to range between $321 million to $323 million and it is expected to show an operating loss of $4 million. No new stores are planned.
Asked in the Q&A period about Bob's “future” given that management hasn't been able to bring the chain to full-year profitability since acquiring it in 2003, Meyrowitz said, “I'm very pleased with their fourth-quarter performance, and they did cut their loss in half [for the year]. Our goal is to keep improving Bob's, and we are going to continue to evaluate the business.”
Overall, TJX Cos., whose main chains are T.J. Maxx and Marshalls, earned $301.1 million, or 66 cents a share, in Q4, up from $205.5 million, or 43 cents per share, a year earlier. Sales rose 8% to $5.5 billion.
