Tuesday Morning Corp. CEO Kathleen Mason did what analysts said she couldn’t do — drive earnings in second quarter 2002 on flat comp-store sales. The Dallas-based closeout chain recently announced an 83% growth in earnings for the reporting period ending June 30, 2002. The company’s sales also increased 8.9%, reaching $161.5 million, while same store sales grew a mere 0.1%.
How did it happen? "Inventory controls resulted in leaner inventory levels and therefore less markdowns during the quarter," wrote Merrill Lynch first vice president Peter Caruso in a report on the announcement.
Wachovia Securities analyst John Rouleau agreed, citing Tuesday Morning’s steady reductions in its supply chain, tighter execution at the store level, and better merchandise flow to stores as factors that will contribute to the retailer’s long-term continued sales productivity and operating efficiencies.
Tuesday Morning sells upscale department store products at closeout bargain prices in its 469 stores. Rouleau said the company believes it can add more than 350 new stores to the chain.