Bombay Announces April Revenue Decline

Furniture World Magazine

The Bombay Company, Inc. reported that total revenue for the four-week period ended April 29, 2006 declined 5.8% to $38.5 million compared to $40.9 million for the four-week period ended April 30, 2005. Same store sales for stores opened more than 12 months decreased 5.0% compared to the comparable four-week period of the prior year. Revenue from non-store activity was 7.0% of the month compared to 6.9% for the same period last year. Growth in the direct- to-customer business and the international wholesale operations partially offset the decline in revenue from the Bailey Street operations, the assets of which were sold during Fiscal 2005 and which contributed $1.0 million in revenue for the period last year. Current month results reflect the adverse impact of the shift in the calendar, which resulted in the Easter holiday moving from March during Fiscal 2005 to April in Fiscal 2006. For the thirteen-week period ended April 29, 2006, total revenue declined 2.4% to $119.1 million compared to $122.1 million for the comparable prior year period while same store sales declined 1.2%. Revenue from non-stores activity was 7.1% of total revenue for the nine-week period compared to 7.7% in the corresponding period of last fiscal year. Growth in direct-to-customer and International revenue partially offset lower revenue from the Bailey Street operations, which accounted for approximately $3.6 million of revenue during the prior period last year. Sales trends were stronger during the first half of April but declined later in the month due, in part, to the majority of stores being closed on Easter and the calendar shift relating to Mother's Day. On a relative basis, the furniture category continued to outperform the accessories and wall decor categories in part due to the changing focus of the content of the April catalog from a gift focus to a furniture focus with the introduction of the new custom upholstery. The average ticket and average unit retail both increased double digit while retail traffic declined. "We are encouraged by the positive comparison versus last year in Canada and with the strength of our direct to customer business. We are concerned about the weakness in our U.S. stores where we have experienced declines in traffic and negative same store sales. We believe that we are addressing these weaknesses with the change in field leadership and with our planned introduction of broadcast as a marketing vehicle in May," noted James D. Carreker, Chairman and Chief Executive Officer. For the quarter, the furniture category had the strongest performance due to strength in the bedroom, home office and BombayKIDS furniture categories. The wall decor and accessories categories declined largely as a result of lower print and mirror sales and lower sales in the decorative accessory, lamps and floral and garden categories. Consistent with the month of April, the average ticket and average unit retail both increased double digit while retail traffic declined. The overall environment for home furnishings was more challenging than anticipated resulting in more reliance on promotional activity to which the customer responded favorably but which adversely impacted margins. During the current fiscal year, no tax benefit will be recorded for losses generated by the Company's U.S. operations during interim periods which effectively results in reporting earnings per share on a pre-tax basis as compared to prior year results where tax benefits were reflected in the quarterly operating results. The Bombay Company, Inc. designs, sources and markets a unique line of home accessories, wall decor and furniture through 482 retail outlets, specialty catalogs and the Internet in the U.S. and internationally.