Tuesday Morning turnaround well underway

Just a few weeks after losing its CEO, Tuesday Morning posted impressive financial results for the first quarter, including an increase in same-store sales.



For the first quarter ended Sept. 30, the Texas-based off-price retailer posted a same-store sales increase of 3.6%. Net sales were $202.3 million, slightly higher than the prior year period. The company ended the first quarter with a store count of 757, a decrease of 44 stores year over year. Operating loss for the first quarter was $6 million.



"Our first quarter performance reflects continued progress against our strategic initiatives," said Steve Becker, executive chairman. "We have significant potential for improvement across all areas of the business, an established strategy and demonstrated progress towards our goals, as well as a strong team executing our initiatives. We are accelerating the pace of certain key investments such as our store relocation program, which continues to have exciting results. We are investing in the completion of our Phoenix distribution center, which will drive meaningful savings and significantly improve our ability to efficiently serve our stores. We are also testing multiple marketing initiatives. While these investments will impact operating margins in the near-term, we believe they are vital steps to unlock the full potential of the business and Tuesday Morning will emerge from this transformation as a far more productive, competitive and profitable retailer."



In September the company announced that Michael Rouleau was leaving in March. The company created a new office of the chairman led by Becker to support oversight of the company’s strategic initiatives until a new CEO can be hired.



The company currently expects the Phoenix distribution center to be operational in the first half of fiscal 2017. Given this, as well as an expected acceleration in pace of store relocations in fiscal 2016, the company currently expects FY16 total capital expenditure to be approximately $46 million, up from the previously provided range of $40 million - $45 million.



Tuesday Morning opened its first store in 1974 and currently operates over 750 stores in 41 states.