Furniture Brands International CEO Discusses Q2 2011 Results - Earnings Call Transcript
If you do not have a copy of yesterday’s press release, you may obtain one along with copies of prior press releases and past SEC filings by linking through to the Investor Relations page of our website, furniturebrands.com.
Now, I’d like to move on to our financial results.
As reported in the last evening’s financial results press release, total sales were $296.2 million in the second quarter, an increase of 2.3% over the same period last year. On a sequential basis, sales in the second quarter were almost flat versus the first quarter of 2011.
Gross margin for the quarter was 24.8%, down compared to 25.7% last year. The decrease in gross margin on a year-over-year basis was driven largely by higher material costs relative to sales price and inventory write-downs. We continue to work on our ongoing productivity and price initiatives to help mitigate the impact of the cost pressures that we are facing.SG&A expenses totaled $79.3 million for the second quarter, compared to $75.2 million last year and down slightly from the $79.6 million level we reported in the first quarter of 2010. On a year-over-year basis the increase in SG&A was primarily due to higher advertising expense and favorable settlements in 2010 related to certain international tax and trade compliance matters. We expect SG&A for the third quarter of fiscal 2011 to be slightly above the just reported second quarter levels and we will update you about our expectation for fiscal fourth quarter SG&A levels on our third quarter earnings conference call.On the retail side of our business, the 45 Thomasville stores that we have operated for more than 15 months showed a same-store sales increase of 8% this quarter. Even at this quarter, we were up against a strong 21% same-store sales comp in the second quarter of 2010. We are pleased with Thomasville’s same-stores sales performance. This represents the sixth straight quarter of same-store sales growth.
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