Universal Forest Q3 earnings dip despite sales increase
Grand Rapids, Mich.-based Universal Forest Products reported third-quarter net income of $2.6 million, down 75.2% from $10.1 million reported for the same period last year.
Sales for the quarter were $480.6 million, up 4.9% from $457.8 million for the same period of 2009.
The company said a 52% spike in lumber products in the spring impeded earnings. Lumber prices have stabilized in the third quarter, however inventories were built earlier in the year, according to Universal.
Sales to industrial and manufactured housing customers increased 19.3% and 18.2%, respectively, during the quarter, while sales to site-built construction customers rose 1.6%. Only do it yourself/retail saw a sales decrease, of 7.7%, due to weak demand that resulted in slow retail sales, the company said.
“This was the most challenging lumber market I’ve seen in my 36 years with the company, and I’m proud of the way our people managed through it,” said CEO Michael B. Glenn. “Frankly, this type of market has the potential to wipe out an entire year’s profits for most companies that operate in our industries. Fortunately, our agility and diverse business model have allowed us to generate more than $17 million in net earnings for the year so far. With more than $58 million in cash and only $53 million in debt, we have the resources to take advantage of opportunities that arise. We remain in an enviable position in our markets.”
Ohio hardware store to close
Store owner Bob Moomaw cited a difficult economy and increased big-box competition for the decision to close the store.
NRF: Holiday sales to rise 2.3%
Holiday retail sales will climb 2.3%, as customers are lured by sales and retailer promotions, according to the National Retail Federation. The rise is slightly lower than the 10-year average holiday sales increase of 2.5%, the group noted, but is a marked improvement from last year’s 0.4% uptick and the dismal 3.9% holiday sales decline retailers experienced in 2008.
The increase in retail sales to $447.1 billion in November and December will be the biggest since a 3.1% gain in 2006, the group said.
As they have in previous years, retailers are expected to focus on supply chain efficiencies and inventory control this holiday season to limit their exposure to excess merchandise and unplanned markdowns, the NRF said. Companies are also expected to leverage new channels — like mobile — to drive sales and provide added service to customers who want to shop anytime, anywhere.
“While consumers have shown they are once again willing to spend on what’s important to them, they will still be very conscientious about price,” said NRF chief economist Jack Kleinhenz, Ph.D. “Retailers are expected to compensate for this fundamental shift in shopper mentality by offering significant promotions throughout the holiday season and emphasizing value throughout their marketing efforts.”
The NRF uses the Commerce Department’s retail sales figures excluding auto, gasoline and restaurant sales.