Same store sales increase at Hancock Fabrics

Hancock Fabrics’s CEO says the company is “heading in the right direction” after reporting an increase in same store sales for the fourth quarter.

The financial news comes just a few weeks after the retailer announced the refinancing of the company’s existing senior debt under a new credit agreement with Wells Fargo Capital Finance and Great American Capital Partners.

Steve Morgan, president and CEO, said: “We are encouraged to have produced two consecutive years of positive operating income, something we have not done since 2009. In addition to this we generated positive cash flow from operations for the first time since 2010. We are pleased with these accomplishments, but remained focused on continuous improvement in operations and cash management. We also recently announced a new five year refinancing deal with Wells Fargo Capital Finance and Great American Capital Partners. The new refinancing was undertaken early as it gives us an extended term on our debt and additional availability. This enhances our ability to drive operating results and further improve cash flow through inventory productivity. With the trend of positive operating income and new financing recently completed, we are confident about the direction the Company is heading and what we believe our potential to be.”

The retailer reported that net sales for the quarter were $88.8 million compared to $81.3 million for the fourth quarter of 2013. Same store sales increased by 2.2%. Gross profit for the fourth quarter was 40.1% compared to 41.0% for the fourth quarter of the prior year. The company says the decrease was mostly driven by increased promotions that improved sales, as evidenced by the increase in fourth quarter comparable store sales, and increased freight costs, partially offset by inventory shrink reduction.

During the fourth quarter of 2014, the company opened two new stores, relocated one store and closed one location. For the 2014 fiscal year, seven new stores opened, six closed, six stores were relocated and six remodeled ending the year with 263 stores.

Hancock Fabrics Inc. operates 263 retail stores in 37 states and an Internet store at www.hancockfabrics.com.