The Independent Voice of Southern Methodist University Since 1915

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The Daily Campus

The Independent Voice of Southern Methodist University Since 1915

The Daily Campus

The Independent Voice of Southern Methodist University Since 1915

The Daily Campus

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Morgan Shiver, Contributor • June 20, 2024
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Turnaround of Tuesday Morning looks hopeful

Tuesday Morning Corp. [has shown that a hopeful future may be amidst its turnaround efforts when it announced its numbers for the fiscal first quarter of 2014.

On Wednesday, Tuesday Morning reported a $12 million net loss, or 28 cents per share, in its fiscal first quarter 2014 that ended on Sept. 30 compared to the $7 million loss in the same reporting period in 2013. Primarily, initial mark-up and higher markdowns have caused this decrease.

The company’s net sales did increase 6.3 percent to $183.7 million. This compares with $172.8 million in the fiscal first quarter of 2013. The increase may be due in large part to the merchandise strategy the company has adopted under the new chief executive officer Michael Rouleau.

With Rouleau, there have been many changes in order to move the company forward. Tuesday Morning has been selling off old inventory, cleaning up its stores, improving distribution centers and installing new cash registers.

“We still have a lot of work to do to continue to make many investments necessary to accelerate our business transition,” said Rouleau in a conference call on Wednesday. “[We are] boldly and aggressively making the major changes that are necessary to tee this company up to be great once again.”

By the end of September 2013, Tuesday Morning had opened one new store during the quarter, closed nine and relocated two. It now has 820 open and fully operational stores. This has allowed the company to begin focusing on brand names that customers are familiar with, rebuild the buyer relationship with suppliers of the products it sells and select broader assortments of merchandise in less quantity.

Since Rouleau took the lead six months ago, Tuesday Morning’s stock price has increased 74 percent from $8.09 in May 2013 to $14.14 today.

One of Tuesday Morning’s leading competitors is home furnishing retailer Bed Bath & Beyond which sales growth has slowed but its share went up 5 percent after the second-quarter results were reported. This shows that investors may be seeing an increase in the housing market.

In a conference call on Wednesday, Daniel Downes from B.C. Holdings commented that he has “noticed a nice improvement at my local Grapevine Texas store.”

Within the next twelve months, investors are looking toward a 25.48 P/E. The company has a long way to improve but the management seems to have a grasp of the turnaround efforts so far.

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