Handleman Braces For Q3 Report12 Feb, 2002 By: Hive News
As rack jobber Handleman Co. prepares for its third quarter earnings report, executives said today the company expects to report sharply reduced net income for its third fiscal quarter, which ended Jan. 31.
Blaming "substantially higher" customer product returns in key markets and operating losses within North Coast Entertainment and in the United Kingdom, the company expects a net income slide from the comparable quarter last year, when it reported net income of $16.3 million or $ .60 per share.
"Despite the lower earnings during our third fiscal quarter, music sales at mass merchant stores continue to improve in each of our markets," said Handleman chairman and CEO Stephen Strome. "We expect this trend to continue."
Handleman was designated a "critical vendor" in Kmart's Chapter 11 proceeding, which let collect the accounts receivable balance it had before Kmart sought bankruptcy protection, and has resumed shipping music product to all of Kmart's stores. Kmart's plans to close several hundred lower performing stores will not materially affect Handleman's future operating results, Handleman is still reviewing its third quarter data and did not specific guidance for expected earnings for the third fiscal quarter this year. It will release results after the market closes Feb. 21. A conference call discussing the results is scheduled for Feb. 22.