swung to a loss in the fourth quarter and hired Bear Stearns to consider alternatives.
The Greenwich, Conn., home decor company said it lost $12.3 million, or 30 cents a share, in the quarter ended Jan. 31, compared to a profit of $39.2 million, or 95 cents a share, a year ago. Adjusted for items, earnings were 67 cents a share in the most recent quarter. Analysts surveyed by Thomson First Call were expecting earnings of 75 cents a share.
Fourth-quarter revenue fell 3.6% from a year ago to $481 million as against analysts' expectations of $483 million.
In fiscal 2007, the company expects to earn $1.65 to $1.70 a share. Analysts expect $1.72 a share.
''Despite these areas of growth and management's best efforts to increase sales in our more challenging markets, commodity costs and freight surcharges had a significant effect on profitability throughout fiscal year 2006,'' the company said. ''We continue to take proactive actions such as implementing select price increases and cost savings initiatives throughout our businesses in an effort to combat exogenous forces.''
Gross profit fell 9% to $219.94 million, while gross profit margin fell 273 basis points. Operating earnings fell 110% to a loss of $6.67 million.
Revenue from direct selling fell 1.92% to $235 million, while in wholesale segment, they fell 8% to $180.8 million. However, they rose 3.5% to $64.8 million in catalog and Internet segment .
The company said that it hired Bear to advise it on strategic alternatives within the wholesale segment, and will likely focus on one or more of its European wholesale businesses.
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