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99 Cents Only posts positive Q2 results, despite challenges
CITY OF COMMERCE, Calif. — California's drought disrupted 99 Cents Only Stores’ ability to continually stock “right-priced” produce, which affected the company’s overall financial results for the second quarter. But despite the challenges, same-store sales in the quarter were positive.
The company's net sales for the quarter increased $25.1 million to $458.2 million, compared to $433.1 million in the prior-year quarter. Same-store sales increased 0.1%, calculated on a comparable 13-week period of the prior year.
Net income was $2 million in the quarter, compared to net income of $1.9 million for the same quarter last year. Net income as a percentage of total sales was 0.4% for the quarter, compared to net income of 0.4% for the same quarter last year.
"We have been focusing in the past year to position 99 Cents Only Stores for sustainable, long-term growth. We are encouraged by the early results of our global sourcing, Go Taller, and other business optimization initiatives," said CEO Stephane Gonthier. "The short-term adverse impact of these initiatives, along with the impact of California's drought on our ability to continually stock right-priced produce, has been a temporary drag on our overall results. However, we are pleased by our same store sales during the quarter — despite these disruptions — as well as the positive customer feedback we are receiving on these programs. We look forward to continuing to realize the benefits of the ongoing implementation of our strategic growth plan."
During the quarter, the company opened four net new stores. By the end of the quarter, the company operated 350 stores, an increase of 7.7% in store count over the end of the same period last year.