JOAN - JOANN stock slides as sales slow dividend put on pause

JOANN Inc. ( NASDAQ: JOAN ) stock slid sharply on Monday after missing on top and bottom line expectations for the third quarter.

The Ohio-based retailer notched just $0.06 in earnings per share on a 7.9% year over year decline in sales to $562.8M. Analysts had expected $0.23 and $569.16M, respectively. Gross margins contracted 230 basis points amid a promotional sales environment and inflationary impacts.

“Although we had a very good sell through during Halloween and are encouraged by our recent momentum during Black Friday and Cyber Monday, it’s clear that consumers are increasingly pressured by inflation and are being more selective with their purchases in the current holiday season, prioritizing household essentials over many discretionary activities,” CEO Wade Miquelon commented. “As an organization, we are taking very meaningful and proactive steps to optimize our cost structure while continuing to drive multiple growth strategies.”

Management expects to achieve $200M of annualized cost savings over the next 18 months. The company also said it has decided to pause its quarterly dividend. The company’s long-term debt rose to $1.06B from $853.8 in the prior year quarter. Meanwhile, cash and cash equivalents slid to $27.5M from $30.9M.

Shares of JOANN Inc. ( JOAN ) slumped 5.69% in after hours trading on Monday.

Read more on the details of the results .

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