HIGH POINT, NC - Stanley Furniture Co. looks to overcome a 16% drop in net sales for the first quarter, saying its core "Stanley business is growing and profitable," with double-digit order growth in the quarter, and new orders already in place for the next.
Net sales for the quarter ended March 29 were $21.9 million, down from $26.1 million in the quarter last year.
The residential furniture company's net loss of 4.4 million net was blamed in part on a weak youth furniture market. Stanley Furniture announced it would cease production at the Young America plant in Robbinsville, NC, last month.
“The decision we announced on April 1, 2014 to no longer pursue our long-term goals associated with the Young America brand was painful for both us and our customers, representatives and associates who have dedicated themselves to the brand over the past several years. We made great strides towards building a business model that would successfully compete in a quickly changing consumer marketplace but concluded we could not ultimately achieve profitability within an acceptable amount of time,” said Glenn Prillaman, president and CEO.
Non-cash restructuring charges in the first quarter of 2014 related to the announcement on Young America totaled $1.2 million. Stanley Furniture (NASDAQ: STLY) said it anticipates further restructuring charges in the next two quarters, but that it also expects to receive additional proceeds from the sale of property, plant and equipment, which has a book value of approximately $18 million.
“We are pleased with the double-digit order growth that our Stanley brand experienced in the first quarter even with the challenging retail environment. We expect further growth in the coming periods as new introductions gain traction. We will also benefit from the increased time, attention and resources focused on a single brand," Prillaman said.
"Over time, we expect our gross margin to benchmark favorably with other companies’ casegoods, and we intend to maintain a lean overhead structure that is consistent with upper-end brands that support wholesale customers in their efforts to market to today’s consumer,” he added.
Founded in 1924, Stanley Furniture produces furniture for the bedroom, dining room, home office and home entertainment segments. Manufacturing plants are located domestically and overseas.
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