Hechinger posts 2% drop in Feb. sales

March 04, 1994|By Ian Johnson | Ian Johnson,Sun Staff Writer

Hit by the winter blizzard and weakened by encroaching competition, the Hechinger Co. yesterday reported a 2 percent drop in sales for February.

The Landover-based company reported that sales at its 72 Hechinger home center stores were down 6 percent to $55.6 million last month, or down 8 percent if revenues from new stores are excluded. The company's 53 Home Quarters Warehouse stores saw sales rise 40 percent to $69.7 million, but that was cut to a 5 percent rise when recently opened stores are excluded.

Comparisons usually exclude newly opened stores because new stores skew revenue figures higher.

Company officials attributed the weak showing in February to the recent bout of winter storms. "You can't go to your store, so I would attribute it all to the weather," Controller Richard S. Gross said.

Analysts who follow the company agreed, although they said Hechinger's is facing growing competition from Home Depot and other home improvement stores.

"The biggest cluster of their stores is in the Washington to Philadelphia area and that area really got clobbered by the weather. These are low-volume months anyway, so when you have an impact by the weather, it can really hit the numbers," said Michael Mead, an analyst with Legg Mason Wood Walker.

Hechinger's A-class stock closed up 12.5 cents at $12.625.

Bad weather also hurt the company during the three months ended Jan. 29, when its profits dropped 55 percent. But for the year ended Jan. 29, Hechinger reported profits of $24.8 million, vs. $26.3 million for the previous year.

Liam Burke, an analyst with Ferris Baker Watts, said the company would have been in a better position to weather the storm had it not been weakened by Home Depot. "The problem with Hechinger is that they're remaking some of their stores so you never know what to expect when you go in. The service is uneven," he said.

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