Financial Reports: Aramark, Talbots, Charming Shoppes, and More

Aramark’s Direct Division Ends Fiscal Year at a Loss
Philadelphia-based food service and facilities management company Aramark Corp. reported record sales of $11.6 billion for fiscal year 2006, a 6% increase over the previous year. But at $261.0 million, net income for the year ended Sept. 29 was down 9% from $288.4 million for fiscal 2005.

Sales from its direct-marketing business–public-safety supplier Galls, workwear merchant WearGuard (whose catalogs have been rebranded as Aramark), and Crest Uniform Healthcare–fell 2%, to $418.2 million from last year’s $428.3 million. Fourth-quarter sales in the segment fell 5%, to $94.1 million from $99.2 million last year.

For the full year the direct division reported an operating loss of $44.2 million; last year it had posted operating income of $11.2 million. The loss included the $43 million third-quarter charge for the writedown of goodwill and adjustments to asset and liability carrying values. The closure in the fourth quarter of the struggling Crest healthcare catalogs also contributed to the operating loss.

J. Jill Drags on Talbots Bottom Line
Third-quarter catalog/Internet sales for Hingham, MA-based apparel cataloger/retailer The Talbots climbed 71%%, to $109 million, as a result of the company’s May acquisition of women’s apparel merchant J. Jill Group. Total sales for the quarter increased 33%, to $569 million. But while Talbots same-store sales rose more than 2%, same-store sales for J. Jill fell almost 7%.

As for net income, it plummeted from $19.9 million for the third quarter of fiscal 2005 to $8.0 million..

Third Quarter’s a Charm for Charming Shoppes
Third-quarter net income for Bensalem, PA-based women’s apparel merchant Charming Shoppes soared 80%, to $19.4 million from $10.8 million last year. Officials attributed much of the surge to lower levels of seasonal inventory, resulting in an improved merchandise margin.

The news was good on the revenue front as well. Net sales rose nearly 5%, to $695.3 million for the three months ended Oct. 28. Sales for the direct-to-consumer segment, consisting primarily of the Crosstown Traders catalogs and Websites, fell 17%, to $79.8 million from $93.6 million the previous third quarter. The Crosstown titles include Coward Shoes, Lew Magram, and Old Pueblo Traders. Retail sales rose 8%, to $615.5 million, and same-store sales inched up 1%.

Design Within Reach Posts Preliminary 3Q Figures
Third-quarter net sales for furniture cataloger/retailer Design Within Reach rose 12%, to $44.0 million for the three months ended Sept. 30. Direct sales, including phone sales and Website sales, were approximately $12 million, up slightly from the same period last year.

But the San Francisco-based company’s estimated net loss grew, to approximately $0.08- $0.10 per share from $0.03 per share for the third quarter of 2005. The results are preliminary, and company won’t be able to file its second- and third-quarter 10-Q reports on time, because it hasn’t completed the reconciliation of a previously announced difference between its accrued inventory subledger and the general ledger dating back to June 2005.

Bluefly Grows 3Q Sales, but at a Cost
Third-quarter sales at Bluefly, a New York-based online merchant of discounted designer apparel and decor, jumped nearly 36%, to $16.3 million from $12.0 million last year. But the company reported a net loss of $3.5 million, more than twice as much as the $1.7 million loss a year agor.

Despite the widening loss, CEO Melissa Payner remained positive in her statement: “We are extremely pleased with our third-quarter results and with the momentum that we have been able to generate leading into the holiday season. Once again, we were able to generate impressive revenue growth, while maintaining strong margins. Our advertising campaign continued to have a positive impact on the business, helping us to increase the number of new customers acquired in the quarter by over 25%. At the same time, our merchandise strategy and continuous improvement of our Website contributed to an approximately 35% increase from existing Bluefly customers.”

More Red Ink for
Chicago-based online auction business recorded a net loss of $2.7 million for the third quarter ended Sept. 30. The company had lost $1.8 million during the third quarter of last year. Gross merchandise sales slipped nearly 3%, to $26.5 million from $27.2 million at year ago.

In July, had acquired another online auction firm, Bidville.

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