"The recently completed quarter was a challenging one," company Chairman and CEO Farooq Kathwari told investors during a conference call from the firm's locally based headquarters. Kathwrai said a fluctuating stock market, rising gas prices and a difficult retail environment were to blame for a drop in total sales from $244.6 million during last year's third quarter to $231.2 million during the third quarter ending March 31.
Net income also fell during that period, declining from $23.1 million, or 60 cents per share, to $17.9 million, or 50 cents per share. Analysts said they expected the company to post earnings of 50 cents per share on sales of $228.3 million in the latest quarter.
Kathwari, the company's president for the past 20 years, said in the last three years the firm has re-tooled the styling of its product line, added new stores in Chicago, Reno and Washington and China and plans to open an additional 15 more stores in the next year as the company moves to maintain its position in the market. The retailer, which has 313 stores worldwide, 103 of them company owned, also plans to relocate several older stores and increase their size between 14% and 20% during the coming 12 months.
"Our objective has been to establish a one-stop shopping experience for consumers where there is a consistence in style, quality and value, " he said. "We believe we are well positioned to grow our business."
While April sales remained slow due in large part to the early Easter holiday, Kathwari said he expects sales during the next three months to improve. The company plans to roll out a national ad campaign next week to help bolster the bottom line.
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