On Nov. 20, Jo-Ann Stores (NYSE:JAS) released its third-quarter earnings report for the period ended Oct. 28.

  • How can you have a turnaround when sales decrease? Well, for starters, close stores while improving profitability.

  • Improved gross margins made it all the way to the bottom line, and Jo-Ann Stores eked out a small profit for the quarter, compared to a loss last year.
  • Not only are there few ratings for Jo-Ann in our Motley Fool CAPS community intelligence service, but only 10 of 22 investors think it will outperform the S&P 500. Got an opinion? Bring it to CAPS!

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2006

Q3 2005

Change

Sales

$461.9

$474.2

(2.6%)

Net Profit

$0.1

($4.1)

N/A

EPS

$0.00

($0.18)

N/A

Diluted Shares

24.0

22.7

5.7%



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

47.4%

45.6%

1.8

Operating Margin

1.1%

(0.4%)

1.4

Net Margin

0%

(0.9%)

0.9

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$20.9

$24.1

(13.3%)

Accounts Rec.

$0.0

$0.0

N/A

Inventory

$535.8

$654.1

(18.1%)



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$186.2

$203.1

(8.3%)

Long-Term Debt

$200.3

$290.0

(30.9%)



Learn the ways of the balance sheet.

Cash Flow Highlights
No cash flow statement was given in the release. How am I supposed to sew the whole pattern together without it?

Find out why Fools always follow the money.

Related Companies:

  • A.C. Moore (NASDAQ:ACMR)
  • Hancock Fabrics (NYSE:HKF)
  • Wal-Mart (NYSE:WMT)

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Wal-Mart is a Motley Fool Inside Value recommendation. Try our value-focused newsletter free for 30 days.

At the time of publication, retail editor and Inside Value team member David Meier was ranked 110 out of 13,811 in The Motley Fool's new rating service, CAPS. He does not own shares in any of the companies mentioned. Fool rules for disclosure are here.