Bassett Furniture Industries
BASSETT FURNITURE INDUSTRIES INC (Form: 8-K, Received: 09/28/2017 09:32:52)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM 8-K

 


 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported) September 28 , 2017

 


 

BASSETT FURNITURE INDUSTRIES, INCORPORATED

(Exact name of registrant as specified in its charter)

 


 

 

VIRGINIA

 

0-209

 

54-0135270

(State or other jurisdiction of

incorporation or organization)

 

(Commission File No.)

 

(I.R.S. Employer

Identification No.)

 

     

3525 FAIRYSTONE PARK HIGHWAY

BASSETT, VIRGINIA

 

24055

(Address of principal executive offices)

 

(Zip Code)

 

Registrant ’s telephone number, including area code 276/629-6000

   

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 



 

 

 

 

 

Item 2.02.

Results of Operations and Financial Condition.

 

On September 28, 2017 Bassett Furniture Industries issued a news release relating to, among other things, the third quarter financial results for the fiscal year ending November 25, 2017. A copy of the news release announcing this information is attached to this report as Exhibit 99.

   

Item 9.01.

Financial Statements and Exhibits.

   

 

Exhibit 99

News release issued by Bassett Furnit ure Industries, Inc. on September 28, 2017.

 

 

 

 

Signatures

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

BASSETT FURNITURE INDUSTRIES, INCORPORATED

 

 

 

 

 

Date: September 28, 2017

By:

/s/ J. Michael Daniel

 

 

J. Michael Daniel

 

 

Title:

Senior Vice President – Chief Financial Officer

 

 

 

 

 

EXHIBIT INDEX

 

 

 

 

Description

 

Exhibit No. 99

News release issued by Bassett Furniture Industries on September 28, 2017.

 

 

Exhibit 99

 

   
     

Bassett Furniture Industries, Inc.

 

J. Michael Daniel

P.O. Box 626     Senior Vice President and
Bassett, VA 24055   Chief Financial Officer
    (276) 629-6614 – Investors
     
    Jay S. Moore
    Director of Communications
For Immediate Release   (276) 629-6450 – Media

                                               

 

 

Bassett Furniture News Release

Bassett Announces Fiscal Third Q uarter Results


 

(Bassett, Va.) September 28, 2017 – Bassett Furniture Industries, Inc. (Nasdaq: BSET) announced today its results of operations for its fiscal quarter ended August 26, 2017.

 

Fiscal 2017 Third Q uarter Highlights

 

Consolidated sales were $ 114.3 million for the third quarter of 2017 compared to $104.7 million for the third quarter of 2016, an increase of 9.1%.

 

Operating income for the quarter was $7.3 million or 6.4% of sales as compared to $7.5 million or 7.2% of sales for the prior year quarter. Excluding the unusual items described below, adjusted operating income was $6.5 million or 5.7% of sales as compared to $6.1 million or 5.8% of sales for the prior year quarter.

 

Wholesale sales wer e $61.8 million for the third quarter of 2017 compared to $58.3 million for the third quarter of 2016, an increase of 5.9%. Wholesale operating income for the quarter was $4.5 million or 7.2% of sales as compared to $5.6 million or 9.7% of sales for the prior year quarter. Wholesale operating profit for the third quarter of 2016 included $1.4 million for the settlement of the Polyurethane Foam Antitrust Litigation.

 

Company-owned st ore sales were $67.4 million for the third quarter of 2017 compared to $61.2 million for the third quarter of 2016, an increase of 10%. This included a comparable store sales increase of 1.8% compared to the prior year quarter. Comparable store operating income was $1.2 million or 2.0% of sales for the current year quarter as compared to $1.5 million or 2.5% of sales for the prior year quarter. Included in the comparable store operating income for 2017 was a $0.5 million loss for expenses related to settling employment claims. Total retail operating income was $1.4 million or 2.0% of sales for the quarter as compared to $0.8 million or 1.3% of sales for the prior year quarter. Also included in the 2017 retail operating income was a $1.2 million gain on the sale of the Las Vegas store building which was closed during the quarter. Comparable store written sales for the quarter decreased 2.9%.

 

Revenue for Zenith was $24.9 million for the third quarter of 2017 compared to $23.0 million for the third quarter of 2016, an 8.4% increase. Zenith’s operating income for the quarter was $1.2 million or 4.7% of sales as compared to $0.7 million or 2.9% of sales for the prior year quarter.

 

Net income for the quarter was $4.6 million or $0.43 per diluted share as compared to $4.2 million or $0.38 per diluted share for the prior year quarter.

 

 

 

 

“We were pleased to post a 9.1% consolidated sales increase for the quarter,” commented Robert H. Spilman, Jr., Chairman and Chief Executive Officer. “All three of our operating segments posted revenue gains led by our retail division ’s 10% increase. Although there were a number of unusual year over year comparisons, quarterly operating income grew by 7% on an adjusted basis despite increasing expense related to investments in our digital platform. We look forward to opening two new stores in new markets in the current quarter, and entering fiscal 2018 with plans to open an additional six to eight new stores, while continuing our program to reposition older stores to better real estate when circumstances are appropriate. Finally, we welcomed our Board of Directors’ approval in July of a 10% increase in our quarterly dividend as part of our ongoing capital allocation strategy.”

 

Wholesale Segment

 

Net sales for the wholesale segment were $ 61.8 million for the third quarter of 2017 as compared to $58.3 million for the third quarter of 2016, an increase of $3.5 million or 5.9%. This increase was driven by a 5.1% increase in furniture shipments to the Bassett Home Furnishings network as compared to the prior year period and a 5.7% increase in furniture shipments to the open market (outside the Bassett Home Furnishings network). Wholesale shipments of accessories, a much smaller component of the Company’s wholesale revenues, increased 79% over the prior year quarter. Gross margins for the wholesale segment were 33.6% for the third quarter of 2017 as compared to 35.4% for the prior year quarter. Excluding the effects of the previously mentioned foam settlement in 2016, the prior year gross margin would have been 33.0%. Gross margins improved in both the Upholstery and Wood operations as compared to the prior year driven by increased operating efficiencies in the domestic operations along with greater leverage of fixed costs from higher sales levels. Wholesale SG&A for the third quarter of 2017 was $16.3 million as compared to $15.0 million for the prior year period. SG&A as a percentage of sales increased to 26.4% as compared to 25.8% for the third quarter of 2016. This increase in SG&A as a percentage of sales was primarily driven by increased spending on the website and e-commerce strategy development along with higher accruals for incentive compensation, partially offset by greater leverage of other fixed costs due to higher sales volumes. Operating income was $4.5 million or 7.2% of sales as compared to $5.6 million or 9.7% of sales in the prior year. Excluding the effects of the previously mentioned foam settlement in 2016, the prior year operating income would have been $4.2 million or 7.2% for the prior year.

 

“Strong performances in our Wood and Upholstery divisions were largely offset at the comparable wholesale operating profit level by spending to enhance our website and E-commerce capabilities and by a favorable adjustment made to our executive compensation accrual last year,” continued Spilman. “Nevertheless, the fundamentals around the domestic manufacturing and importing of our product line were solid. Domestic wood grew by 23% and profitability grew by 55% in the process. Thanks to a strong showing in our Juvenile division, imported wood sales declined at a smaller rate than experienced in recent quarters. We are also very encouraged by the initial retail sales of our newly-introduced Bella collection that hit the stores in August. As has been the case for several years, we grew upholstery sales and profitability again this quarter. Raw material price increases from our suppliers tempered profit gains in our domestic upholstery operations, however. We are watching this trend closely as we move forward. Retail sales of our Club Level by Bassett motion upholstery product line also contributed to wholesale sales gains and profitability.”

 

 

 

 

As mentioned, we are increasing our investments in our website and our E-commerce capabilities to continue to grow Bassett,” added Spilman. “There are several components to this strategy that merit discussion. Simply increasing digital content is one component. This means more presentations of the imagery of our product assortment to further expose consumers to our designs and our custom furniture capabilities, primarily through a more aggressive consumer e-mail campaign. Secondly, technology enhancements on our website are being implemented to provide consumers with a faster and more interactive experience with our products and to allow them to visualize the myriad fabric and finish options that we offer. This is paying off in the average time spent on our website by consumers when engaging with this technology and with a much increased likelihood that they will visit a Bassett store as a result. The third component of our technology investments is designed to grow our accessory business and to round out our offerings as a complete resource for interior design. Exposing these products more heavily on our website and creating a full E-commerce framework to complement our in-store home makeover capabilities will generate opportunities for Bassett to attract more customers more often. We are encouraged by the early results that we have seen from these efforts and believe that the commitment to invest in these digital competencies will strengthen our store performance and the Bassett brand in general as we move forward.”

 

Retail Segment

 

Net sales for the 62 Company-owned Bassett Home Furnishings stores were $67.4 million for the third quarter of 2017 as compared to $61.2 million for the third quarter of 2016, an increase of $6.2 million or 10%. The increase was due to a $1.1 million or 1.8% increase in comparable store sales along with a $5.1 million increase in non-comparable store sales.

 

While the Company does not recognize sales until goods are delivered to the consumer, management tracks written sales (the retail dollar value of sales orders taken, rather than delivered) as a key store performance indicator. Written sales for comparable stores decreased by 2.9% for the third quarter of 2017 as compared to the third quarter of 2016.

 

The consolidated retail operating profit for the third quarter of 2017 was $1.4 million as compared to $0.8 million for the third quarter of 2016, an increase of $0.6 million. The 55 comparable stores generated operating income of $1.2 million for the quarter, or 2.0% of sales, as compared to $1.4 million, or 2.5% of sales, for the prior year quarter. Gross margins for comparable stores were 51.3% for the third quarter of 2017 as compared to 50.3% for the third quarter of 2016.  This increase is primarily due to improved pricing strategies and product mix. SG&A expenses for comparable stores increased $1.4 million to $29.6 million or 49.3% of sales as compared to 47.9% of sales for the third quarter of 2016. The increase in SG&A was primarily due to a $0.5 million loss for expenses associated with settling employment claims along with higher advertising expenses and occupancy costs.

 

Non-comparable stores generated sales of $7.3 million with operating income of $0.1 million. Included in the operating income was a $1.2 million gain on the sale of the Las Vegas store building that was closed during the third quarter.

 

“The third quarter in our corporate retail operation was relatively quiet as we prepared for a flurry of new store acti vity in the upcoming quarters,” continued Spilman. “Our June price increase began to positively offset retail gross margins with a 70 basis point year over year improvement. Delivered retail comps increased 1.8% but written sales comped down 2.9% compared to last year’s 7.9% comparable store improvement. We suffered cannibalization in stores nearby our new Westbury, NY and King of Prussia, PA locations though the overall markets grew significantly in both cases. Written sales were also affected by store closures in the south Texas market over the final three days of the quarter due to the approach of Hurricane Harvey. While these factors contributed to our written sales shortfall, the decline in store sales that we began to see this summer have continued into the first four weeks of the current quarter. We completed the store closing event in our original Las Vegas location during the quarter and began closing events in Dallas and Cincinnati. We were pleased that we were able to hold our overall margins intact as the final liquidation of store inventories are detrimental to margins. We plan to open new locations in each of these markets over the next few quarters.”

 

 

 

 

Logistical Services Segment

 

Revenue for Zenith was $ 24.9 million for the third quarter of 2017 as compared to $23.0 million for 2016, an increase of $1.9 million or 8.4%. Revenues to both Bassett and non-Bassett customers were higher quarter over quarter. Zenith’s operating expenses for the third quarter of 2017 were $23.7 million or 95.3% of revenue as compared to $22.3 million or 97.1% for the third quarter of 2016. This resulted in operating profit of $1.2 million or 4.7% of sales for the current quarter as compared to $0.7 million or 2.9% of sales for the prior year quarter. Improved operating efficiencies in the over the road freight operations were partially offset by increased costs in the home delivery operations primarily from the start-up of several local distribution hubs.

 


About Bassett Furniture Industries, Inc.

Bassett Furniture Industries, Inc. (NASDAQ:BSET), is a leading manufacturer and marketer of high quality home furnishings. With 91 company- and licensee-owned stores at the time of this release, Bassett has leveraged its strong brand name in furniture into a network of corporate and licensed stores that focus on providing consumers with a friendly environment for buying furniture and accessories. The most significant growth opportunity for Bassett continues to be the Company’s dedicated retail store program. Bassett’s retail strategy includes stylish, custom-built furniture that is ready for delivery in the home within 30 days. The stores also feature the latest on-trend furniture styles, free in-home design visits, and coordinated decorating accessories. Bassett also has a traditional wholesale business with more than 700 accounts on the open market, across the United States and internationally. For more information, visit the Company’s website at bassettfurniture.com. (BSET-E)

 

Certain of the statements in this release, particularly those preceded by, followed by or including the words “believes,” “expects,” “anticipates,” “intends,” “should,” “estimates,” or similar expressions, or those relating to or anticipating financial results for periods beyond the end of the third fiscal quarter of 2017 , constitute “forward looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended. For those statements, Bassett claims the protection of the safe harbor for forward looking statements contained in the Private Securities Litigation Reform Act of 1995. In many cases, Bassett cannot predict what factors would cause actual results to differ materially from those indicated in the forward looking statements. Expectations included in the forward-looking statements are based on preliminary information as well as certain assumptions which management believes to be reasonable at this time. The following important factors affect Bassett and could cause actual results to differ materially from those indicated in the forward looking statements: the effects of national and global economic or other conditions and future events on the retail demand for home furnishings and the ability of Bassett’s customers and consumers to obtain credit; and the economic, competitive, governmental and other factors identified in Bassett’s filings with the Securities and Exchange Commission. Any forward-looking statement that Bassett makes speaks only as of the date of such statement, and Bassett undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. Comparisons of results for current and any prior periods are not intended to express any future trends or indication of future performance, unless expressed as such, and should only be viewed as historical data.

 

###

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

 

Condensed Consolidated Statements of Income - unaudited

 

(In thousands, except for per share data)

 

 

 

   

Quarter Ended

   

Nine Months Ended

 
   

August 26, 2017

   

August 27, 2016

   

August 26, 2017

   

August 27, 2016

 
           

Percent of

           

Percent of

           

Percent of

           

Percent of

 
   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

 
                                                                 

Sales revenue:

                                                               

Furniture and accessories

  $ 100,152             $ 91,465             $ 294,144             $ 276,857          

Logistics

    14,109               13,247               40,134               41,395          

Total sales revenue

    114,261       100.0 %     104,712       100.0 %     334,278       100.0 %     318,252       100.0 %
                                                                 

Cost of furniture and accessories sold

    45,320       39.7 %     40,091       38.3 %     132,199       39.5 %     124,496       39.1 %
                                                                 

Selling, general and administrative expenses excluding new store pre-opening costs

    61,373       53.7 %     56,800       54.2 %     180,972       54.1 %     173,845       54.6 %

New store pre-opening costs

    308       0.3 %     281       0.3 %     1,583       0.5 %     727       0.2 %

Income from operations

    7,260       6.4 %     7,540       7.2 %     19,524       5.8 %     19,184       6.0 %
                                                                 

Gain on sale of investment

    -       0.0 %     -       0.0 %     3,267       1.0 %     -       0.0 %

Impairment of investment real estate

    -       0.0 %     -       0.0 %     (1,084 )     -0.3 %     -       0.0 %

Other loss, net

    (583 )     -0.5 %     (647 )     -0.6 %     (1,994 )     -0.6 %     (1,904 )     -0.6 %

Income before income taxes

    6,677       5.8 %     6,893       6.6 %     19,713       5.9 %     17,280       5.4 %
                                                                 

Income tax provision

    2,098       1.8 %     2,728       2.6 %     6,431       1.9 %     6,496       2.0 %

Net income

  $ 4,579       4.0 %   $ 4,165       4.0 %   $ 13,282       4.0 %   $ 10,784       3.4 %
                                                                 

Basic earnings per share

  $ 0.43             $ 0.39             $ 1.25             $ 1.00          
                                                                 

Diluted earnings per share

  $ 0.43             $ 0.38             $ 1.24             $ 0.99          

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)

 

   

(Unaudited)

         

 

 

August 26, 2017

   

November 26, 2016

 

Assets

               

Current assets

               

Cash and cash equivalents

  $ 36,497     $ 35,144  

Short-term investments

    23,125       23,125  

Accounts receivable, net

    19,514       18,358  

Inventories, net

    57,748       53,215  

Other current assets

    8,808       10,727  

Total current assets

    145,692       140,569  
                 

Property and equipment, net

    101,988       104,655  
                 

Other long-term assets

               

Deferred income taxes, net

    8,235       8,071  

Goodwill and other intangible assets

    17,431       17,360  

Other

    6,410       7,612  

Total long-term assets

    32,076       33,043  

Total assets

  $ 279,756     $ 278,267  
                 

Liabilities and Stockholders ’ Equity

               

Current liabilities

               

Accounts payable

  $ 19,047     $ 21,281  

Accrued compensation and benefits

    13,584       13,602  

Customer deposits

    20,757       25,181  

Dividends payable

    -       3,218  

Current portion of long-term debt

    3,373       3,290  

Other accrued liabilities

    13,554       10,441  

Total current liabilities

    70,315       77,013  
                 

Long-term liabilities

               

Post employment benefit obligations

    13,776       12,760  

Long-term debt

    527       3,821  

Other long-term liabilities

    4,412       3,968  

Total long-term liabilities

    18,715       20,549  
                 
                 

Stockholders ’ equity

               

Common stock

    53,677       53,615  

Retained earnings

    139,345       129,388  

Additional paid-in-capital

    626       255  

Accumulated other comprehensive loss

    (2,922 )     (2,553 )

Total stockholders' equity

    190,726       180,705  

Total liabilities and stockholders ’ equity

  $ 279,756     $ 278,267  

 

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows - unaudited

(In thousands)

 

   

Nine Months Ended

 
   

August 26, 2017

   

August 27, 2016

 

Operating activities:

               

Net income

  $ 13,282     $ 10,784  

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

               

Depreciation and amortization

    10,060       8,866  

Provision for asset impairment charge

    1,084       -  

Gain on sale of property and equipment

    (1,278 )     (165 )

Gain on sale of investment

    (3,267 )     -  

Tenant improvement allowances received from lessors

    1,165       590  

Deferred income taxes

    195       4,360  

Other, net

    516       421  

Changes in operating assets and liabilities

               

Accounts receivable

    (1,018 )     2,334  

Inventories

    (4,190 )     6,483  

Other current and long-term assets

    1,919       (4,721 )

Customer deposits

    (4,424 )     (3,867 )

Accounts payable and accrued liabilities

    654       (6,120 )

Net cash provided by operating activities

    14,698       18,965  
                 

Investing activities:

               

Purchases of property and equipment

    (10,817 )     (18,955 )

Proceeds from sale of retail real estate and property and equipment

    4,474       632  

Proceeds from sale of investment

    3,592       -  

Acquisition of retail licensee store

    (655 )     -  

Other

    223       -  

Net cash used in investing activities

    (3,183 )     (18,323 )
                 

Financing activities:

               

Cash dividends

    (6,544 )     (5,238 )

Proceeds from the exercise of stock options

    310       114  

Other issuance of common stock

    83       182  

Repurchases of common stock

    (83 )     (3,989 )

Taxes paid related to net share settlement of equity awards

    (641 )     (77 )

Repayments of notes payable

    (3,287 )     (7,235 )

Proceeds from equipment loans

    -       7,384  

Net cash used in financing activities

    (10,162 )     (8,859 )

Change in cash and cash equivalents

    1,353       (8,217 )

Cash and cash equivalents - beginning of period

    35,144       36,268  

Cash and cash equivalents - end of period

  $ 36,497     $ 28,051  

 

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES  

Segment Information - unaudited

(In thousands)

 

   

Quarter Ended

   

Nine Months Ended

 
   

August 26, 2017

   

August 27, 2016

   

August 26, 2017

   

August 27, 2016

 

Net Sales

                               

Wholesale

  $ 61,757     $ 58,303     $ 186,025     $ 177,785  

Retail - Company-owned stores

    67,402       61,216       196,139       184,754  

Logistical services

    24,925       22,991       71,885       71,480  

Inter-company eliminations:

                               

Furniture and accessories

    (29,007 )     (28,054 )     (88,020 )     (85,682 )

Logistical services

    (10,816 )     (9,744 )     (31,751 )     (30,085 )

Consolidated

  $ 114,261     $ 104,712     $ 334,278     $ 318,252  
                                 

Operating Income

                               

Wholesale

  $ 4,466     $ 5,648     $ 15,142     $ 14,380  

Retail

    1,353       768       1,377       1,465  

Logistical services

    1,164       674       1,736       2,079  

Inter-company elimination

    277       450       1,269       1,260  

Consolidated

  $ 7,260     $ 7,540     $ 19,524     $ 19,184  

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES  

Rollforward of BHF Store Count

 

 

   

November 26,

                           

August 26,

 
   

2016

   

Opened*

   

Closed*

   

Transfers

   

2017

 
                                         

Company-owned stores

    59       3       (1 )     1       62  

Licensee-owned stores

    31       1       (1 )     (1 )     30  
                                         

Total

    90       4       (2 )     -       92  

 

 

* Does not include openings and closures due to relocation of existing stores within a market.

 

 

 

 

 

BASSETT FURNITURE INDUSTRIES, INC. AND SUBSIDIARIES

Supplemental Retail Information--unaudited

(In thousands)

 

   

55 Comparable Stores

   

55 Comparable Stores

 
   

Quarter Ended

   

Quarter Ended

   

Nine Months Ended

   

Nine Months Ended

 
   

August 26, 2017

   

August 27, 2016

   

August 26, 2017

   

August 27, 2016

 
           

Percent of

           

Percent of

           

Percent of

           

Percent of

 
   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

 
                                                                 

Net sales

  $ 60,137       100.0 %   $ 59,071       100.0 %   $ 180,584       100.0 %   $ 175,005       100.0 %
                                                                 

Cost of sales

    29,301       48.7 %     29,342       49.7 %     89,578       49.6 %     87,678       50.1 %
                                                                 

Gross profit

    30,836       51.3 %     29,729       50.3 %     91,006       50.4 %     87,327       49.9 %
                                                                 

Selling, general and administrative expense*

    29,622       49.3 %     28,259       47.8 %     87,355       48.4 %     83,643       47.8 %
                                                                 

Income from operations

  $ 1,214       2.0 %   $ 1,470       2.5 %   $ 3,651       2.0 %   $ 3,684       2.1 %

 

 

   

All Other Stores

   

All Other Stores

 
   

Quarter Ended

   

Quarter Ended

   

Nine Months Ended

   

Nine Months Ended

 
   

August 26, 2017

   

August 27, 2017

   

August 27, 2017

   

August 27, 2016

 
           

Percent of

           

Percent of

           

Percent of

           

Percent of

 
   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

   

Amount

   

Net Sales

 
                                                                 

Net sales

  $ 7,265       100.0 %   $ 2,145       100.0 %   $ 15,555       100.0 %   $ 9,749       100.0 %
                                                                 

Cost of sales

    3,796       52.3 %     1,136       53.0 %     8,050       51.8 %     5,756       59.0 %
                                                                 

Gross profit

    3,469       47.7 %     1,009       47.0 %     7,505       48.2 %     3,993       41.0 %
                                                                 

Selling, general and administrative expense

    3,022       41.6 %     1,430       66.7 %     8,196       52.7 %     5,485       56.3 %

Pre-opening store costs**

    308       4.2 %     281       13.1 %     1,583       10.2 %     727       7.5 %
                                                                 

Loss from operations

  $ 139       1.9 %   $ (702 )     -32.8 %   $ (2,274 )     -14.7 %   $ (2,219 )     -22.8 %

 

Comparable store SG&A includes retail corporate overhead and administrative costs.

** 

Pre-opening store costs include the accrual for straight-line rent recorded during the period between   date of possesion and store opening  date, employee payroll and training costs prior to store opening  and other various expenses incurred prior to store opening.