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| Statement |
|---|
| Well, as I said, we are pleased with the performance |
| We had sales of $186.3 million, strong gross and operating margins of 59.9% and 15.5% respectively |
| In summary, we produced strong gross and operating margins, while managing our expenses in a challenging environment |
| Our diluted earnings of $0.86 remains strong and importantly, we ended the quarter with cash of $156.2 million and no debt |
| We got to take a place and we’ve got to take a look at manufacture the sofa, we are positioned extremely well |
| Good results on the operating side |
| And as we go forward, that will continue and will give us benefit and will continue to become - continue to become more efficient |
| Our financial results in the just completed third quarter were highlighted by strong gross and operating margins, shorter lead times from decreasing backlog, disciplined cost and expense controls and a robust balance sheet, including $156.2 million in cash, and investments and lower inventory |
| Our manufacturing is in great position to service our clients |
| Our consolidated net sales totaled $186.3 million and were helped by high backlog, pricing actions taking and the positive effects of product mix, partially offset by lower delivered unit volume |
| We revealed many areas of our enterprise, including the following: the introduction of the interior design destination initiative; The Danbury Connecticut Design Center reflected our strengthened offerings and projection of classic designs with a modern perspective |
| We are pleased with our strong financial performance for the quarter ended March 31 2023, especially compared to strong results for the previous period |
| As we began to revert back to pre-pandemic conditions, our operations produced strong financial results, which I will now discuss |
| We've got up and got up very, very well |
| Consolidated gross margin was 59.9%, which marked our eighth consecutive quarter that our consolidated gross margin exceeded 58%, a metric previously not seen before the onset of the COVID-19 pandemic |
| The projection and our new offerings were extremely well received and our and our plan is to have this projection reflected in over 172 design centers across North America during the next nine months |
| And I think by this quarter, we will have completely got up and which is good news that we will have even faster deliveries |
| We have strengthened our logistics, both at the national level, and at the retail level |
| So I think having a dividend between 5% and 6% yield is a pretty good and that's our intention |
| We generated $33.4 million in cash from operating activities during the quarter, bringing our total year-to-date amount up to $74.4 million in fiscal ‘23 and 85.9% increase over last year due to higher net income and an improvement in working capital |
| Our designers are doing well |
| We believe it will help us in driving traffic to our design centers during the time of softening economy |
| We have managed our costs quite well |
| Very good |
| We had just tremendously high business in the first two years of the COVID |
| While we had developed new products, we decided to hold introductions until most of the backlogs are delivered and we were in a better position to service our clients |
| After Matt provides the detailed financial overview, I will review our initiatives to maintain a strong operational and financial position |
| During the last few years, we had to manage very strong backlogs of orders |
| We were going to do that too, but it just so happens the softening of the economy gives us an opportunity of having a strong marketing to get a message across |
| And we have strengthened our teams and this launch of the Interior Design destination is a very important initiative |
| Statement |
|---|
| So I know that the negative unit volume trends you’ve been kind of seeing have been negatively impacting gross, margins |
| Adjusted operating margin was 15.2%, down from 15.8% last year, due to lower consolidated net sales, a gross margin reduction and higher retail delivery cost, partially offset by our ability to maintain a disciplined approach to cost savings and expense controls |
| Wholesale segment written orders decreased 9.3% compared with last year and were down 5.9% to the pre-pandemic third quarter of 2019 |
| We've been hearing from different industry participants that that unit volume trends might be down somewhere in the mid-single-digit to high-single-digit range for this quarter |
| Our retail written orders declined 12.3% due to a strong prior year comparable |
| When compared to last year, our consolidated gross margin was down 50 basis points, due to a change in the sales mix, partially offset by lower input costs such as inbound freight and raw materials |
| They're still high, compared to the pre-pandemic level, no, as we continue to go forward, our backlogs are going to continue to come down, because we are able to make the products |
| It's down about 15% |
| And we saw that most of it really during the quarter and in April also I think that people are more cautious |
| And I also wanted to ask about demand, the down 9% in wholesale for the quarter, 12% in retail |
| We ended the quarter with wholesale backlog of $73.3 million, down 42.2% from a year ago, as we were able to reduce the number weeks of backlog by over 30%, bringing it more current |
| Currently, we see the freight rates coming down |
| Cristina Fernández And as a follow-up to the backlog comment, you mentioned backlog is up about 30% versus pre-pandemic in orders for the quarter, I think are down like 3% |
| And that's why we have not taken many price increases because the freights is coming down |
| That is softening |
| We also reduced our overall inventory |
| We discussed many initiatives to continue to operate our business, also keeping an view in the softening of the economy |
| It’s still not completely down, but a major factor |
| So do you expect that backlog to normalize versus the pre-pandemic level or anything has changed with that backlog should stay higher? Farooq Kathwari No, only to keep in mind, just our backlog, just from prior year, they're down almost 40% |
| But we do know that we were operating at very high demands |
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