Fiscal 2020 second quarter versus Fiscal 2019 second quarter:
Consolidated sales in the second quarter of fiscal 2020 increased 1.8% to $447.2 million, led by growth in the Retail segment.
Consolidated GAAP operating margin increased to 6.6% versus 6.5% in the prior-year quarter.
Non-GAAP operating margin increased to 7.5% in the current-year quarter versus 7.3% in last year’s second quarter, reflecting improvement in the Upholstery and Retail segments.
Non-GAAP results exclude $1.4 million of purchase accounting charges and $2.8 million of expenses related to the company’s supply chain optimization initiative announced in August.
For the quarter, sales in the company’s Upholstery segment increased 1.2% to $320.9 million.
GAAP operating margin was 10.0% compared with 10.1% in last year’s second quarter, and non-GAAP operating margin increased to 10.9% versus 10.2%, excluding a $2.8 million charge for costs related to the supply chain optimization initiative.
In the Casegoods segment, sales decreased 6.3% to $29.4 million, reflecting industry challenges and the impact of tariffs on the occasional table business, as well as a delay on goods from one supplier.
Operating margin was 7.5% compared with 12.0% in the prior-year period.
Sales in the Retail segment increased 6.2% to $148.4 million in the second quarter of fiscal 2020.
GAAP operating margin for the Retail segment improved to 5.7% from 4.7% in last year’s second quarter.
Non-GAAP operating margin increased to 5.8% in the current-year quarter from 5.4% in last year’s second quarter, and excluded purchase accounting charges in each period related to store acquisitions.
Operating margin improvement was driven primarily by higher volume.
On the core base of 153 company-owned stores in last year’s second quarter, delivered same-store sales increased 5.0%, reflecting improved traffic trends and continued strong execution at the store level.
Sales for Joybird (reported in the Corporate & Other segment) increased 11.9% to $20.8 million.
Joybird improved its gross margin but posted a higher operating loss than in the prior-year quarter, reflecting ongoing investments related to customer acquisition, partially offset by supply chain synergies.
The company continues to be optimistic about Joybird’s prospects to add long-term value and expects it to be profitable in the fiscal 2020 fourth quarter, excluding purchase accounting adjustments.
GAAP EPS was $0.48 for the fiscal 2020 second quarter versus $0.42 in the prior-year quarter.
Non-GAAP EPS was $0.52 versus $0.48 in last year’s second quarter, with the fiscal 2020 second quarter excluding a $0.03 per share charge for purchase accounting, a $0.04 per share charge related to the company’s recently announced supply chain optimization initiative, and a $0.03 per share benefit related to the fiscal 2019 termination of the company's defined benefit pension plan.
Fiscal 2019 non-GAAP results excluded a $0.06 per share charge for purchase accounting. ■