After a couple of threadbare years, Jo-Ann Stores
Fourth-quarter comparable-store sales improved to 3.3% from increased average ticket. This is four quarters in a row of positive comps. Better, but coming off negative 6% comps last year, the company still has a way to go before it's back to the same-store sales levels it reached years ago.
Management credits the sales gains to a "repair plan" focused on:
- Sharper inventory management to reduce clutter in the stores.
- Restoring gross margins to historic levels.
- Rationalizing expenses.
- Systems improvements in merchandising, distribution, and store operations.
This mending was long overdue. Improvement is slow, but noticeable. While total sales slipped 2.5%, operating profit rose 10.6% with the help of expense leverage. Inventories look in line coming out of the holidays, up 4% because of the purchase of spring merchandise. And the bottom line of $1.10 inched up 4.8% compared to last year's fourth quarter.
If Jo-Ann can sew its financial performance back together, I think it can benefit from changes in the industry. Competitor A.C. Moore
I wouldn't call this a gusty tailwind for Jo-Ann, more like a minor breeze. But with systems upgrades on tap for 2008, cleaner stores, and some much needed merchandising discipline -- a few more stitches in time may help the company get back on track.