In reporting fiscal first-quarter sales, Tuesday Morning’s new CEO Andrew Berger, who replaced a retiring Fred Hand, faced a double-digit comparable sales decline and deeper losses.
The company posted a net loss of $28.2 million, or 29 cents per diluted share, for the quarter, versus a net loss of $14.6 million, or 17 cents per diluted share, in the year-previous period.
Yahoo Finance published a first-quarter analyst consensus estimate including a loss of 24 cents per diluted share and sales of $174.8 million.
Comparable sales decreased 10.4% in the quarter year over year, the company noted.
Net sales were $157.1 million versus $176.9 million in the year-before quarter. Operating loss was $25.9 million versus an operating loss of $11.7 million in the year-prior period.
According to Tuesday Morning filings with the United States Securities and Exchange Commission, the net loss for the quarter included an $8.8 million benefit related to the mark-to-market adjustments of the convertible notes issued in conjunction with the strategic investment received in September 2022 and an $8.4 million loss related to the extinguishment of debt from the conversion of notes into common stock.
On September 21, Tuesday Morning announced the closing of its strategic transaction to secure $35 million in convertible debt financing including a $32 million investment from a special purpose vehicle formed by Ayon Capital and Retail Ecommerce Ventures, owner of a portfolio of consumer brands that includes Pier 1 Imports, Linens ‘n Things, Stein Mart and Modell’s Sporting Goods. The transaction also included $3 million provided by certain members of Tuesday Morning’s management team including then-CEO Fred Hand.
Andrew Berger, Chief Executive Officer, stated, “Our first quarter sales performance was in line with our expectations as our teams navigated a challenging consumer environment as well as the previously discussed disruption in receipt flow due to the timing of the finalization of our strategic investment late in the quarter. As we look ahead to the remainder of the year and beyond, I look forward to working with our teams to execute our plans to drive traffic and profitability for Tuesday Morning.”
At first quarter’s end, Tuesday Morning operated 487 stores compared to 489 stores at the finish of the year-earlier period.
