JOAN - JOANN stock slides after holiday quarter results disappoint

2023-03-24 07:33:54 ET

JOANN ( NASDAQ: JOAN ) slumped in early trading after Q4 EPS fell short of estimates.

Sales fell 5.8% in Q4 compared to a year ago and comparable sales were down 5.9%. The category performance for the quarter was called mixed, but JOANN noted it saw healthy performance in the core sewing and craft businesses

Gross margin was down 30 bps to 43.8% of sales on a GAAP basis. After adjusting for excess import freight costs, gross margin was down 270 bps to 46.2% of sales.

Adjusted EBITDA came in at $48.6M vs. $88.9M a year ago.

The retailer said it ended the year with in an extremely clean inventory position. Total inventory was down 11% year-over-year and the clearance position owasless than 5%.

CFO update: "While many of the cost headwinds we faced in fiscal year 2023 are becoming tailwinds, we believe it is prudent to continue to take proactive steps to strengthen our balance sheet. With this in mind, our new credit facility is another tool to improve our balance sheet as we focus on cash generation throughout fiscal year 2024."

Shares of JOANN fell 7.58% premarket to $1.95 to match the 52-week low.

The Seeking Alpha Quant Rating on JOANN has been flashing Strong Sell since last November.

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