Hechinger posts $849,000 loss for 4th quarter

March 20, 1991|By Cindy Harper-Evans

Landover-based Hechinger Co. reported a loss for its fourth quarter yesterday -- its first since the do-it-yourself home improvement chain went public about 25 years ago.

For the quarter that ended Feb. 2, Hechinger said it lost $849,000. It had an $8.5 million profit in the same period a year ago.

The loss was anticipated by Wall Street since Hechinger publicly announced last month that it was expecting a loss of several cents a share in the fourth quarter due to weak consumer spending during the Christmas season and preoccupation with the Persian Gulf war in January.

Analysts said being forewarned about the poor fourth quarter caused Hechinger stock to drop only slightly yesterday in over-the-counter trading -- down 12 1/2 cents a share, to $8.50. R. Bentley Offut of Baltimore-based Offut Securities said the drop was negligible considering that the blue chip stocks of the Dow Jones industrial average fell more than 2 percent in value yesterday. When Hechinger first announced it expected an unprofitable fourth quarter in early February, its stock fell $1, to $7.25.

Hechinger posted a loss of 2 cents a share for the fourth quarter, compared with the 24 cents a share it posted a year ago. Hechinger's revenues were down 0.8 percent, to $309.8 million, in the most recent quarter.

For the year, the home improvement chain, which has 116 stores nationwide, posted net income of $23.3 million, a decline of 32 percent from fiscal 1990.

The retailer's revenues for the year were $1.4 billion, up 13 percent from 1990.

"This is exactly what I anticipated," said Carol I. Palmer, who follows Hechinger for Duff & Phelps in New York.

"I don't think they will deteriorate any further," she said. "In February, housing starts were strong, and that's a good indicator that things will improve."

Hechinger officials could not be reached for comment yesterday.

However, the retailer said last month that it is planning less aggressive expansion for the year in light of an uncertain economy. It now expects to open seven Home Quarters Warehouse stores, including four conversions from Hechinger stores, and two new Hechinger stores this year. That is down from the 14 Home Quarters stores and three Hechinger stores it had anticipated.

Moody's Investors Service recently downgraded its ratings on the home improvement company's 5.5 percent convertible subordinated debentures to Ba1 from Baa3.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.