99 Cents Only posts sales decline; names new CFO

The CEO of 99 Cents Only pointed to the promise of a new executive team as evidence that the company can return to profitable growth even as it reported disappointing third quarter results.



The company said for the period ended Oct. 30, the company's net sales increased 2.8% to $491.5 million, compared to $478.3 million in the prior year. Same-store sales decreased 3.9% due to challenges in produce and consumables sales, the cannibalization impact of recent new store openings as well as ongoing initiatives to clear excess seasonal inventory, the company said.



The retailer also appointed Felicia Thornton as CFO and treasurer, responsible for overseeing finance, accounting, treasury, risk management, legal and IT functions.



"With a new senior executive team now in place, we are aggressively identifying the issues that have led to our disappointing results in recent quarters," said Geoffrey Covert, president and CEO. "I see great possibilities for 99 Cents Only Stores and look forward to building on the foundational strengths of our business while providing the direction and discipline to return the organization to profitable growth. Our new leadership team is energized and working with a sense of urgency to address the challenges that we face and the opportunities that lie ahead. To this end, we are focused on improving the customer experience, reducing shrink and scrap, enhancing inventory management practices and getting the right products to the right stores at the right time. These priorities are designed to focus the organization and drive improvement in our financial and operational performance."



New CFO Thornton has extensive executive experience in retail, and particularly in the grocery store industry, having served in senior leadership positions at DSM, Inc., Albertsons, and The Kroger Company.



The company said its net loss was $152.6 million in the third quarter, compared to $3.8 million for the third quarter of fiscal 2015. Adjusted EBITDA was $5.1 million.

The company currently operates 391 stores, an increase of 7.5% in store count over the end of the third quarter last year. Subsequent to the end of the quarter, two new stores were opened in California, bringing the total store count to 391.