True Value revenue down 3.9 percent
Chicago-based True Value reported sales of $478.5 million for the third quarter, down 3.9 percent from $497.9 million for the same period in 2006.
The co-op reported a net margin of $12 million, down 34.4 percent from $18.3 million a year ago. Net margin is a measurement of net earnings specific to the co-op model.
The prior year’s net margin included a $6.3 million one-time gain due to a legal matter. Excluding last year’s nonrecurring gain, year-to-date net margin was down 2.5 percent.
The company saw a 1.6 percent growth in warehouse shipments to True Value retailers. The company blamed sales declines in part on the timing of its annual fall market, held Oct. 30 within the fourth fiscal quarter. Revenue and profit from market activities benefited the third quarter in 2006 but will benefit the fourth quarter in 2007.
Third-quarter profit levels were in line with the company’s plan, True Value said in a statement.
True Value had sales of $2 billion in 2006. The co-op includes approximately 5,500 independent retailer locations under banners including True Value, Grand Rental Station, Taylor Rental, Party Central, Home & Garden Showplace and Induserve Supply.
Levitt and Sons declares bankruptcy
Fort Lauderdale, Fla.-based home builder Levitt and Sons has filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Florida, following a housing downturn and credit market disruptions.
“This downturn has been particularly sudden and steep in Florida and in the Southeastern United States — the markets in which Levitt and Sons operates,” the company said in a statement.
In its bankruptcy filing, the company lists assets of less than $1 million with more than $100 million in debts. In an earlier filing with the Securities and Exchange Commission, Levitt and Sons said it had defaulted on more than $300 million in loans with several lenders, including Bank of America and Wachovia.
Levitt and Sons, the home building subsidiary of Levitt Corp., said in a statement the move was a response to “unprecedented conditions in the homebuilding industry, which have severely impacted the company.” Options in the restructuring process include the sale of the company.
“We deeply regret the impact the Chapter 11 filing of Levitt and Sons will have on homeowners, vendors and employees,” said Lawrence Young, who recently was named to the company’s new position of chief restructuring officer. “As part of this process, we will explore the potential sale of all or some of Levitt and Sons’ assets.”
Within the last year, Levitt and Sons downsized operations in Tennessee and exited the Memphis and Nashville markets, reduced staffing and worked with subcontractors to help reduce costs. However, the company’s financial position took a blow in August when credit market disruption led to more cancellations and fewer buyers, the company said.
Same-store sales up 1.9 percent at Tractor Supply
Farm and fleet retailer Tractor Supply saw third-quarter earnings of $17.5 million, down 3.3 percent from $18.1 million last year. Sales were up 12.5 percent to $629.2 million from $559.2 million in the previous year.
Same-store sales increased 1.9 percent at the retailer. The company said it saw an increase in expenses that it attributed to payroll increases and occupancy from new stores. Tractor Supply opened 21 new stores in the quarter and closed none, a higher count than the 18 stores the company opened — and one store it closed — in the third quarter last year.
Jim Wright, president and CEO of Tractor Supply, highlighted growth categories in the third quarter — notably the company’s core “lifestyle” categories, such as animal health products and pet supplies. Still, the company was “disappointed” with sales performance in its seasonal merchandise category, he said.
“Despite challenges presented by drought conditions and consumer pressures impacting discretionary purchases, we achieved positive comparable-sales growth as well as slight gross margin improvement,” Wright noted.
Tractor Supply also lowered its guidance for the full fiscal year, blaming a “delayed onset of colder weather” and “continued external pressures on the consumer.”
“We believe it is more appropriate to temper our outlook for our performance through the remainder of the year,” Wright said.
Additionally, Tractor Supply announced it has named Gregory Sandfort chief merchandising officer.
Sandfort formerly served as president and chief operating officer at Michaels Stores. Prior to that, he served as chief merchandising officer at Michaels and held merchandising management spots at Sears and Federated Department Stores.
Based in Brentwood, Tenn., Tractor Supply is one of the country’s largest retail farm and ranch store chains.