2023-03-24 07:30:50 ET
JOANN ( NASDAQ: JOAN ) stock slid about 6% in premarket trading on Friday after reporting far weaker than expected quarterly profits.
Despite topping analyst expectations for sales for Q4 2023, at $692.8M against a $681.44M consensus, earnings per share came in well below the Street expectation. The Ohio-based retailer reported just $0.07 in earnings per share against a $0.43 consensus. Gross margin contracted 270 basis points to 46.2, below the 47.8% consensus estimate.
“In fiscal year 2023, we navigated a challenging environment spanning macroeconomic uncertainty, unprecedented inflation, continued supply chain disruption, as well as lapping pandemic fueled growth that positively impacted fiscal year 2022,” CEO Wade Miquelon commented. “We gained topline sales momentum at the end of the fourth quarter, delivering positive monthly comparable sales in January 2023. We also ended the year in an extremely clean inventory position with total inventory down 11% to last year and a clearance position of less than 5%.”
He added that the company will continue to focus on cost-cutting efforts into fiscal 2024. Management also highlighted new credit agreements to shore up the balance sheet.
“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,” Scott Sekella explained. “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 ( JOAN ) sustained about a 6.16% decline into Friday’s premarket trading, extending a drop marked after the announcement on Thursday evening .
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Joann stock slumps as margins remain under pressure