Mixed results for value retailer in Q4

99 Cents Only Stores turned in a strong sales performance for its fourth quarter, even as its net loss grew amid rising expenses.



The retailer reported a net loss of $20.9 million for the quarter, versus a net loss of $18.4 million in the year ago period.



Net sales increased 6.7% to $552.5 million, while same-store sales rose 6.4%. Average ticket gained 4.4% and customer traffic increased 1.9%. Operating loss was $6.5 million versus $2.7 million in the period a year prior.



Seasonal merchandise and general merchandise helped drive comps in the quarter, the company said, while fresh offerings improved due to better product availability, improved in-stock levels and the expansion of the company’s third party distributor partnership.



For the full-year fiscal 2017, 99 Centers Only Loss narrowed its loss to $118.2 million from a net loss of $248 million last year. Net sales rose 2.9% to $2.06 billion. For the full year, adjusted EBITDA of $50.6 million was up 28%, compared to the prior year, reversing a two-year decline in the same.



“We concluded fiscal 2017 with a strong fourth quarter driven by growth in same store sales, expanding margins and lower inventory levels,” said Geoffrey Covert, president and CEO, 99 Cents Stores, which operated 390 stores at the end of the quarter. “As a result, we continued to solidify 99 Cents Only Stores’ liquidity position while generating significant year-over-year growth in adjusted EBITDA. In addition, fourth quarter gross margin of 30.1% improved 340 basis points year-over-year, primarily due to our concerted efforts to improve shrink and scrap and execution in our logistics network.”