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Earnings Analysis: 
Krispy Kreme Swings to Loss
Author: George Shopov
123jump.com



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Krispy Kreme Doughnuts Inc. posted before the bell Monday a loss for its third quarter, compared to a year-ago profit, hurt by impairment and store closing costs.

 
Krispy Kreme Doughnuts, Inc. (KKD: chart) announced before market open Monday that it swung to a quarterly loss from a prior-year profit, dragged by impairment and store closing costs. The Winston-Salem, North Carolina-based doughnut shop chain reported a net loss of $3 million, or 5 cents per share, for the third quarter of fiscal 2005, in contrast to a net profit of $14.5 million, or 23 cents per share, last year. Excluding extraordinary items, the company said it earned $2.4 million, or 4 cents per share, in the quarter ended October 31. The average analysts’ forecast was for a profit before items of 13 cents per share. Total sales in the quarter inched up 1.4% to $170.1 million. Company store sales climbed 9.6% from a year ago to $121.2 million, boosted by new store openings. Krispy Kreme said revenue from franchise operations was $6.2 million in the quarter, down 5.4% year-over-year, and revenue at Krispy Kreme Manufacturing and Distribution plunged 15.7% to $42.7 million.

Foot Locker, Inc. (FL: chart) announced Thursday quarterly earnings that advanced 19% from a year earlier, boosted by sales increase. The U.S. top athletic footwear retailer posted net income of $74 million, or 47 cents a share, for the third quarter of fiscal 2004, compared with net income of $62 million, or 41 cents a share, for the same period a year ago. The earnings met Wall Street’s consensus forecast. For the quarter ended October 30, Foot Locker recorded sales of $1.37 billion, which represents a 14% growth from prior-year sales of $1.19 billion. Comparable-store sales inched up 1.2%. The New York-based company said its cost controls also contributed for the improved results. For the first nine months, net earnings came to $204 million, or $1.31 per share, on sales of $3.8 billion. For the 2003 corresponding period, earnings were $136 million, or 92 cents per share, on sales of $3.4 billion.

Gap Inc. (GPS: chart) said after the bell Thursday that its quarterly income climbed 1% from last year, aided by improved profit margins. The San Francisco-based apparel retailer posted a profit of $265 million, or 28 cents per share, for its third quarter, against a profit of $263 million, or 28 cents per share, a year ago. The results matched the average analysts’ estimate. Net sales in the quarter were up 1% to $4.0 billion, but same-store sales slipped 1% from a year earlier.

Autodesk, Inc. (ADSK: chart) of San Rafael, California, reported Thursday that its third-quarter profits rocketed up to $74.1 million, or 60 cents per share, from year-ago profits of $22.6 million, or 20 cents per share. The developer of computer-aided design software said results were fuelled by solid revenue growth and a tax benefit. Excluding items, income totaled $47.7 million, or 38 cents per share, surpassing the mean analysts’ estimate of 34 cents per share. Quarterly revenue jumped 28% from last year to $300.2 million, driven by strong demand for the company’s AutoCAD family of products.

Novell, Inc. (NOVL: chart) posted Thursday fourth-quarter net income of $13 million, or 3 cents per share, bouncing back from a net loss of $109 million, or 29 cents per share, for the 2003 equivalent. The Waltham, Massachusetts-based maker of computer networking software cited strength in its SUSE LINUX Enterprise Server business and the weak dollar as main factors for the turnaround. On a pro forma basis, profits amounted to $23 million, or 6 cents per share, up from $19 million, or 5 cents per share, last year. Analysts had called for a profit of 5 cents per share. Revenue in the quarter rose to $301 million from $287 million.

Marvell Technology Group Ltd. (MRVL: chart) of Sunnyvale, California, announced Thursday a huge rise in its quarterly earnings, driven by record revenues. The chipmaker rolled out income of $43.6 million, or 14 cents per share, for its third quarter, in contrast to income of $12 million, or 4 cents per share, generated a year ago. Excluding items, the company earned 22 cents per share in the quarter, up from 12 cents per share, last year, and a penny ahead of the mean analysts’ forecast. Quarterly revenue totaled $317.6 million, a 48% surge from $215.3 million.

Williams-Sonoma, Inc. (WSM: chart) on Thursday turned in net earnings of $28.5 million, or 24 cents a share, for its fiscal third quarter, up 19% from net earnings of $23.9 million, or 20 cents a share, for the same period of the previous year. The San Francisco-based home products retailer topped by a penny a share the mean analysts’ forecast. Williams-Sonoma attributed the results to higher revenues, which climbed 14% in the quarter to $722.8 million.

Limited Brands, Inc. (LTD: chart) of Columbus, Ohio, said Thursday that its quarterly income slumped 40% from a year earlier, when results were fuelled by more one-time gains. The fashion retailer reported a net profit of $78.3 million, or 16 cents a share, for its third quarter, down from $129.7 million, or 25 cents a share, for the 2003 corresponding quarter. Third-quarter profit before items was $49.7 million, or 10 cents a share, against $44.3 million, or 8 cents a share, a year ago. The results matched analysts’ expectations.

Hibbett Sporting Goods, Inc. (HIBB: chart) announced Thursday that its third-quarter earnings increased 17% to $6.3 million, or 26 cents per share, from year-ago earnings of $5.4 million, or 23 cents per share, on higher sales. Analysts expected the Birmingham, Alabama-based sports retailer to earn 24 cents per share, on average. Quarterly sales improved to $92.1 million from $78.4 million, with same-store sales rising 5.4%.

The Walt Disney Company (DIS: chart) posted Thursday quarterly profits that rose 24% from last year, buoyed by strong performance at its cable channels and ABC Television network. The Burbank, California-based media conglomerate rolled out net income of $516 million, or 25 cents per share, for its fiscal fourth quarter, in contrast to net income of $415 million, or 20 cents per share, for the 2003 comparable period. The earnings were well ahead of Wall Street’s consensus estimate of 18 cents per share. Revenue in the quarter climbed 8% to $7.54 billion.
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