MIDVALE, Utah – On the upside, the relaunched Bed Bath & Beyond platform has pulled in more than 300,000 new customers. But while related metrics are improving, Overstock.com Inc. net revenue still fell by double digits.

For the third quarter ended Sept. 30, total net revenue fell 19% to $373 million. The company posted an operating loss of $41 million vs. operating income of $5.66 million in the year-ago quarter. Net loss was $63 million, or $1.39 per diluted share, compared with a net loss of $36.99 million, or 81 cents per diluted share, in last year’s Q3.

The company ended the quarter with $325 million in cash and cash equivalents.

During the first month of the quarter, the platform was still operating under the Overstock.com banner. The site transitioned to the Bed Bath & Beyond brand on Aug. 1.

Company CEO Jonathan Johnson stressed that the business is still in the early stages of capitalizing on its transition to Bed Bath & Beyond. “We have been successful in acquiring new customers and reactivating past customers. Total active customers grew sequentially over two years,” he said.

Although revenues were still down, orders returned to positive year-over-year growth the for first time in more than two years, he noted.

Key operational metrics included:

• Orders delivered up 3% to 1.9 million.
• Active customers of 4.9 million, down 15%.
• Average order value of $192, down 9%. This, in part, reflects the greater ratio of lower-priced soft home and housewares goods in the mix to reflect the legacy Bed Bath & Beyond assortment.
• Orders per active customer of 1.48, a decrease of 9% year-over-year

“It’s taken longer to warm up the (legacy Bed Bath & Beyond) email file than we hoped. We took some time because wanted to make sure we didn’t have any email caught in spam files,” said Johnson.

See also:

• It’s back! Beyond reintroducing liquidation model with familiar name
• Overstock steps Beyond its past in corporate rebrand
• Overstock overhaul? Hedge fund pushing for action

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DANBURY, Conn. — Top 100 retailer Ethan Allen saw orders drop off by double digits during its fiscal first quarter but managed to slice expenses by more than $11 million.

For the first quarter ended Sept. 30, consolidated net sales fell 23.6% to $163.9 million. Net income was halved, coming in at $14.94 million, or 62 cents adjusted per diluted share, compared with $29.88, or $1.11 adjusted per diluted share, in the year-ago quarter.

Sales were negatively impacted by $15 million due heavy flooding at Ethan Allen’s Vermont facility in September, which resulted in a pre-tax charge of $2.1 million. Retail net sales fell 23.6% to $163.9 million while wholesale net sales declined 13.3% to $99.4 million.

“We resumed limited operations during the second half of the quarter, and at this time, the majority of our associates are back at work,” said Farooq Kathwari, Ethan Allen’s chairman, president and CEO.

On the expense side, Ethan Allen managed to slash sales, general and administrative expenses down to $80.298 million compared with$91.962 million in last year’s first quarter. The company also reduced inventory levels, which ended the quarter at $149.6 million, 10.8% lower than a year ago.

“Despite these challenges, we were able to maintain a strong gross margin of 61.1% and an adjusted operating margin of 12.1%. We also continued to generate positive operating cash flow and as of Sept. 30, we had total cash and investments of $163.2 million and no debt,” said Kathwari.

Looking ahead, he said the company believes consumers are ready to begin refreshing their homes again following the 2022 pullback.

“After the major focus on consumers on their homes during the pandemic, we see consumers have spent more focus on time in other areas, such as travel. We expect to see that moderate (with) more focus on the home, although not at the level we saw during the COVID period,” he said.

Ethan Allen is responding by introducing new products into its assortments, “and we will continue to do so in the next 12 months.”

See also:

• Completely gutted: Pictures highlight Ethan Allen’s severe flood damage
• Ethan Allen’s profits beat 2022 levels despite fourth quarter dip

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AMSTERDAM, The Netherlands — While revenue was up 5% in constant currencies, report revenue for AkzoNobel’s third quarter was down 4.2%, while operating income and net income were up sharply for the period.

The company noted that revenue growth in constant currencies was mainly driven by pricing; volumes were flat, with higher volumes in Marine and Protective Coatings, Powder Coatings and Decorative Paints Asia and offset by soft demand in Industrial Coatings.

EBITDA for the third quarter ended Sept. 30 was €443 million, up 46% from €283 million in the same period last year.

Operating income increased nearly 111% over the year-ago period, which the company attributed to property divestments, partly offset by restructuring and acquisition-related costs for the Chinese Decorative Paints acquisition from Sherwin-Williams.

As of Sept. 30, the company’s net debt was €4.103 million vs. €4.089 million at the end of 2022. The net debt/EBITDA leverage ratio at the end of the quarter was 3.2, compared with 3.8 as of Dec. 31, 2022. Free cash flow was up significantly year-over-year to €243 million as compared with €54 million in the 2022 period.

In its outlook for the full year, AkzoNobel expects the economic conditions to continue to impact volume growth. It says cost reduction programs are expected to partly mitigate higher-than-expected inflationary pressure on operating expenses.

Based on current market conditions, the company projects around €1.45 billion adjusted EBITDA for the year.

For the full earnings report, click here.

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CLEVELAND, Ohio — Despite what Sherwin-Williams Inc. CEO John Morikis called “an environment where demand remained highly variable by end market and region,” the paints and coatings supplier posted gains in its third quarter ended Sept. 30.

Consolidated net sales increased over the year-ago period by 1.1% to $6.1 billion, with net sales from stores in the U.S. and Canada open more than 12 months up 3% year-over-year.

EBITDA for the quarter increased 12.6% to $1.27 billion, or 20.7% of net sales, and diluted net income per share rose to $2.95 per share, up 12.6% compared with the $2.62 per share in the third quarter of 2022.

“Sherwin-Williams delivered strong third quarter results in an environment where demand remained highly variable by end market and region, and against a challenging prior year comparison,” said Morikis, adding, “As we previously indicated, we have deliberately chosen to continue investing at this time in multiple growth initiatives and solutions for our customers, which is reflected in higher SG&A costs in the quarter compared with a year ago. While we executed on these initiatives, we continued to create shareholder value as adjusted diluted net income per share and EBITDA grew by double-digit percentages, and we returned $566 million to our shareholders through dividends and share repurchases during the quarter.”

The Paint Stores Group’s net sales increased primarily due to benefits from selling price increases. Sales volume for the segment was approximately flat year-over year. The price increase and moderating raw materials costs fueled the segment’s profit for the quarter.

In the Consumer Brands Group, net sales decreased 4%, which the company attributed to the divestiture of the China architectural business. The company noted that lower sales volume growth in North America and Asia were partially offset by higher growth in Latin America and Europe. Profit for the segment dipped 13.7% for the period.

Net sales for the Performance Coatings Group also edged down by 1% for the period, primarily due to volume declines and partially offset by selling price increases. Profit for the segment increased, however, primarily due to moderating raw material costs and selling price increases.

“Given our strong third quarter results, we are increasing our earnings guidance for the full year,” said Morikis. “Our fourth quarter is a seasonally smaller one, and we continue to expect choppiness by region and end market.  More importantly, we continue to see opportunity amid uncertainty, and our businesses are well-positioned.”

The company is increased its full year 2023 diluted net income per share guidance to a range of $9.21 to $9.41 per share, up from the previous $8.46 to $8.86 per share. It expects fourth quarter net sales to be up or down in low-single digit percentage compared with the year-ago period.

For the full Sherwin-Williams third quarter results, click here.

See also:

• Sherwin-Williams connects past and future in 5th industrial design report
• Sherwin-Williams posts record quarterly sales, bolstered by higher prices

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ATLANTA — Lease-to-own retailer The Aaron’s Co. reported a decline in net revenues in the third quarter of FY2023, but its loss shrank compared with the same period a year ago.

The Atlanta-based company, which includes Aaron’s and BradsMart, reported revenues of $525.7 million, down 11.4% compared with $593.4 million across the same three months in 2022. Net loss was $4.1 million, or 13 cents per share, vs. a loss of $15.6 million, or 51 cents per share, in the third quarter of 2022.

Officials attributed the 73.5% improvement in net loss primarily to lower total operating expenses at both business segments, including lower write-offs at the Aaron’s Business segment, partially offset by lower revenues at both business segments.

Adjusted EBITDA for the three month period was $25.3 million, giving Aaron’s an EBITDA margin of 4.813%.

“I am pleased that we delivered third quarter consolidated company earnings ahead of our internal expectations,” said CEO Douglas Lindsay said in a statement accompanying the earnings. “The Aaron’s Business segment is benefiting from our lease decisioning enhancements, which led to lower write-offs and a larger than expected lease portfolio size, despite ongoing challenges in customer demand.

“During the quarter, we opened three Aaron’s stores in new markets and our first new BrandsMart store since acquiring the business, and we remain focused on positioning both businesses for growth.”

Aaron’s adjusted its full year outlook to $2.12 billion to $2.17 billion in revenues, down from $2.12 billion to $2.22 billion. It anticipates net earnings in the $14 million to $17.5 million range, down from the $16.8 million to $25.5 million range with a diluted earnings per share expectation of 35 cents to 50 cents per share, down from 55 cents to 80 cents per share.

See also:

• Aaron’s beats earnings expectations for second quarter of 2023
• Which city did Aaron’s pick for 3rd BrandsMart location in Georgia?

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LOWELL, Ark. — Lower revenues in all business segments, higher equipment-related costs, and higher insurance and claims expense were the primary reasons for J.B. Hunt Transport Services’ operating income to drop 33% from the year-ago third quarter.

For the period ended Sept. 30, the company reported operating revenue of $3.16 billion, down 18%; operating income of $241.7 million, down 33%; and net earnings of $187.4 million, down 30%, compared with the same period in 2022.

The decrease in revenue was driven primarily by a 14% and 22% decrease in Intermodal and Truckload revenue per load, respectively; a 38% decrease in volume in Integrated Capacity Solutions; a 20% decrease in stops in Final Miles Services; and a 1% decline in average revenue producing trucks in Dedicated Contract Services. This was partially offset by a slight increase in Intermodal volumes and a 6% increase in Truckload loads, year-over-year.

In operating income, third quarter 2023 included an $8 million net loss from the sale of equipment. On a consolidated basis, operating income as a percentage of consolidated gross revenue decreased year-over-year as a result of higher professional driver and non-driver wages, and benefits and equipment-related and maintenance expenses. These items were partially offset by lower rail and truck purchased transportation costs.

On Sept. 14, J.B. Hunt announced it entered into a definitive agreement to purchase the brokerage operations of BNSF Logistics, which subsequently closed on Sept. 30. The results of the operations acquired will be reflected in the Integrated Capacity Solutions (ICS) segment beginning in the fourth quarter.

Also, on Jan. 1, the company transferred the majority of JBT’s company-owned trucking operations to the Dedicated Contract Services segment and transferred its less-than-truckload brokerage operations from ICS to Final Miles Services segment.

J.B. Hunt ended the third quarter with $1.4 billion outstanding on various debt instruments, up from the total debt of $1.2 billion in Sept. 30, 2022. The quarter ended with cash and cash equivalents of approximately $75 million.

For the complete report and a breakdown by segment, visit the J.B. Hunt website.

See also:

• J.B. Hunt now offers specialized furniture shipping in the Pacific Northwest
• Revenue dips 18% at J.B. Hunt as demand remains weak

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BASSETT, Va. – Bassett Furniture reported $87.2 million in consolidated third quarter sales, a 26.1% drop from the same time last year, and a $13.3 million decline from last quarter. Overall, the company reported a $2.6 million loss.

Wholesale sales fell 28.2% from last year to $56.7 million, representing a $30 million decline from last quarter. In retail, sales fell 26.2% to $52.3 million, around an $8 million drop from last quarter. This is the third consecutive quarter the company’s sales have declined from the previous quarter.

“Writing new business, both at wholesale and retail, proved very difficult in the 12 weeks between Memorial Day and the start of our Labor Day promotion in late August,” said CEO Robert Spilman. “Although we continue to see increased business around the important holiday events, day-to-day store traffic and wholesale order writing between the big events remain very challenging.

“We first began to see signs of a slowdown in the third quarter of 2022, and this year’s period represented another 4.6% decline in wholesale orders. Despite this softness, we continue to maintain a strong balance sheet while executing on the elements of our growth plans with the expectation of returning to profitability.”

Wholesale margins of 11.2% were comparable with the company’s second quarter margins, despite an 8.5% sequential decline in wholesale revenue.

“Once again, we wrote down the value of certain slow-moving styles of our Club Level imported motion line, this time to the tune of $800,000,” Spilman continued. “Recall that our Club Level inventory peaked at $22 million at the end of August 2022. At the most recent August close, our inventory was slightly over $11 million, or some 49% less than last year. Recognizing that we have some $6 million of excess and discontinued inventory, we still have several good selling styles in the Club Level line which produce good margins. Ultimately, we believe that $5 to $6 million of inventory will be sufficient to support this strategically important assortment.”

Spilman said the retail segment was the main reason for the company’s overall operating loss.

“Things have changed dramatically from 2022, our best retail year ever,” he said. “In short, for the period, we did not generate enough retail revenue to break even. Actually, retail gross margins were comparable to prior year amidst a 26% decline in sales, but we were unable to reduce our fixed and variable SG&A costs enough to maintain profitability with the reported level of sales.

“In the five weeks prior to this writing (which include the first four weeks of Q4), average weekly sales have improved markedly but were aided by the expected Labor Day boost and by several new product introductions that coincided with the promotion. Although we cannot predict the longevity or the depth of the furniture industry’s current slump, we are once again focused on the disciplines of margin improvement, customer service, digital outreach and store upgrades as we head toward 2024. Over the next four months, we also look forward to opening two new stores and re-opening an existing location that has been closed for remodeling.

Spilman commented on the debut of the new Bassett website, a project three years in the making.

“We believe that, over time, we will improve site traffic and enhance both e-commerce and store conversions as a result of this investment. We are already seeing that engagement has improved as consumers are spending more time on the new site with each visit compared to previous metrics with our old platform.”

He also highlighted the performance of the company’s domestic upholstery team, which was able to improve margins over last year while dealing with a 31% decline in shipments.

“Their ability to drive efficiency and manage costs in such a demanding environment is impressive. Imported wood margins declined compared to last year but improved sequentially as compared to the second quarter on reduced shipments. The pandemic-related freight costs imbedded in our oldest import wood inventory is beginning to burn off, a trend which should accelerate and result in margin expansion in the coming months. Work schedules in our two domestic wood plants improved as the quarter wore on and continued on that path in the first weeks of the current quarter. It is hard to see the positive in a quarter where wholesale shipments declined by 28%, but we do have several trends that point to better results moving ahead.”

See also:

• Bassett sales drop; company seeks to return to pre-pandemic levels
• Bassett reports sales decline, significant employee attrition

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ZEELAND, Mich. – Like its competitor Steelcase last week, office and contract furniture giant MillerKnoll saw its shares soar 17% yesterday after it reported better-than-expected first quarter numbers.

The company reported sales of $917 million for the quarter, a decline of nearly 15% from last year. Gross margin however, expanded in each of the company’s segments, while profits and organic orders improved in the Americas Contract segment. Operating expenses fell by nearly $4 million.

“Our teams around the world delivered great results for the first quarter of the new fiscal year,” the company wrote in an earnings report. “We exceeded our July earnings guidance for the quarter through a combination of strong sales, on the high end of our guidance and gross margin expansion in each of our business segments.

“We are off to a very good start to our new fiscal year and are encouraged by the momentum from our ongoing integration efforts and the broader implementation of our strategic vision.

“Having said this, as a global enterprise we are currently facing challenges arising from specific macroeconomic factors impacting certain sectors of our business,” it continued. “While the specter of economic recession in North America appears to be fading, the housing market remains under pressure. Additionally, we are facing difficult macroeconomic conditions in both China and Europe. However, we believe our first-quarter financial results demonstrate the power of our diversified business model in leveraging areas of strength as an offset to regional challenges.”

Orders in the quarter of $913.7 million were 9.8% lower on a reported basis and 1.3% lower organically year-over-year. The relative decline in organic orders is, however, an improvement compared with the 7.8% year-over year organic decline posted in the fourth quarter of fiscal year 2023, the company said.

Gross margin in the quarter was 39.0%, 450 basis points higher than the same time last year. The year-over-year increase in gross margin the company attributed to the realization of price optimization strategies, moderating input costs and ongoing integration efforts. This is the third consecutive quarter of consolidated year-over-year adjusted gross margin expansion.

Steelcase’s earnings report was similar in a few ways. Steelcase reported $854.6 million in revenue, a small decline from last year’s $863 million. Both companies reported strong gains in gross margin, and both attributed some of their success to higher pricing.

Both have increased their outlooks for fiscal 2024.

“While economic uncertainty persists in parts of our business, we maintain a generally optimistic outlook,” said MillerKnoll. “For full year fiscal 2024, we are increasing our guidance and expect to generate adjusted diluted earnings in the range of $1.85 and $2.15 per share.”

See also:

• While Q4 numbers drop, MillerKnoll shows increases for fiscal 2023
• Shares surge at Steeclase after stronger-than-expected quarter

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GRAND RAPIDS, Mich. – Although posting a decline in revenue, Steelcase’s second quarter earnings were well ahead of expectations, causing its share price to surge 19%.

The office furniture giant reported second quarter revenue of $854.6 million, a modest decline from last year’s $863.3 million. The company attributed the decline to lower volume, offset in part by higher pricing. Orders fell 7% in the Americas primarily on the project side of the business, partially offset by double-digit growth in continuing business.

“We delivered better than expected revenue and earnings in a dynamic environment due primarily to continued improvement in our order fulfillment patterns and pricing benefits,” said Sara Armbruster, president and CEO. “Through the first half of the year, although project activity has softened, we’ve seen strong growth in our continuing business as customers make investments to refresh their existing spaces.”

Earnings per share rose 35% compared with the prior year, which the company attributed to strong improvement in gross margin. Total liquidity strengthened by $115 million.

The company has improved its outlook significantly, with it predicting a strong return-to-office push. Earnings per share projections rose from 80 cents to 90 cents per share. The company’s earnings per share were 56 cents last year.

“Based on the strength of our first half results and current market conditions, we expect our full year adjusted earnings to finish above the target we set at the beginning of the year,” said Armbruster. “Our improved operating results and strengthened liquidity provide capital to invest in our strategy and are supportive of our goal to drive shareholder value.

“More companies are issuing return to office mandates, and we’re optimistic that our demand levels will improve as customers seek our help to evolve their workplaces to engage, connect and work better for their employees.”

See also:

• Steelcase lowers outlook, cuts 180 salaried jobs
• Higher pricing bolsters Steelcase in Q1 as orders continue to decline

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MARTINSVILLE, Va. – Industry giant Hooker Furnishings reported a decline in sales for the second quarter late last week. Company executives explained the company’s performance in an earnings report followed by an earnings call.

Here are a few of the key takeaways:

Sales fell at a faster pace: Consolidated net sales for the fiscal 2024 second quarter were $97.8 million, a decrease of $55.1 million, or 36% compared with the prior year second quarter. Last quarter, sales had fallen 17.3%, or $55.1 million.

Each of the company’s three segments also saw greater dips than the previous quarter. In Hooker Branded, net sales decreased by $18.1 million, or 34.3% due to decreased shipments and unit volume. Last quarter, the segment saw sales decrease by 0.8%.

In Home Meridian, the company reported a loss of $3.3 million, with sales falling 51%. Last quarter, sales fell 32.5%, or just over $20 million. Finally, in Domestic Upholstery, sales fell 19.4% due to sales dips at Shenandoah and HF Custom, partially offset by an increase at Sunset West. Last quarter, the segment saw sales decline after 10 consecutive quarters of year-over-year growth, falling 14.8%.

Hooker attributed the decline primarily to industry-wide decreased demand for home furniture, as well as the planned exits of its unprofitable operations within Home Meridian.

Long-term is the name of the game: As the short-term remains choppy, the company continues to put its faith in longer-term strategies.

“In this environment, we’ve prioritized strengthening our financial position and strategically deploying capital and other resources, while investing in new showrooms and systems that position us to immediately leverage increasing demand when it occurs,” said Hoff. “For example, the collective impact of our new showrooms in High Point, Atlanta and Las Vegas have increased our customer contacts from about 3,000 to around 14,000 annually, more than quadrupling the number of existing and potential customers.

“While we expect the full benefit of this investment will have a mostly longer-term impact, we have already opened a thousand new accounts in the first half as visibility and engagement have increased,” Hoff added. “The transformation of the Home Meridian segment to a sustainably profitable business model is well underway. “Most of the excess inventories connected to the exit of ACH at the end of the last fiscal year have been sold, and the related cost reduction efforts are paying off. We recorded a small operating income in fiscal July in this segment and while we continue to expect some short-term volatility in sales and earnings, we expect HMI to achieve sustainable profitability in the second half of the fiscal year.”

Orders are trending up in all segments: In Hooker Branded, incoming orders increased by 18.6% as compared to the prior-year quarter. In Domestic Upholstery, incoming orders increased by 36.7%.

“As we anticipated, the first half of the year was difficult as the industry worked through bloated inventories and consumers’ spending habits changed,” Hoff said. “We expect demand and business to pick up in the second half for several reasons.

“First, consolidated orders are up in mid-double-digits over this time a year ago, with orders trending up in each segment for the past few months. Secondly, a significant portion of Hooker Branded’s backlog consists of orders for new products launched at the High Point market, and are expected to ship in the second half of this year.” he said, adding, “Thirdly, in the second half, Home Meridian expects to ship to over a thousand retail floors in what we believe to be the largest number of new product placements in its history.”

See also:

• Sales fall sharply at Hooker, but company expects gain in second half
• 5 takeaways from Hooker’s Q1 earnings report

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