Furniture Brands International Inc.’s first-quarter profit plunged 90 percent on restructuring charges and soft sales, the firm reported Wednesday.
For the period ended March 31, the company’s profit fell to $2.88 million from profit of $30.22 million in the same quarter of 2013. Revenue during the recent period was $573.75 million, down 13 percent from nearly $661.45 million. The company had its sales projections March 14, saying it expected its first-quarter net sales to drop nearly 15 percent.
During the quarter, Furniture Brands announced plans to eliminate about 330 employees companywide, which it predicts will save the firm about $13 million annually. Four executive- and administrative-level jobs were cut in St. Louis.
“Business conditions in the first quarter were difficult across all our companies. Already soft retail conditions worsened as the quarter progressed,” W. G. “Mickey” Holliman, chairman and CEO, said in a statement Wednesday.
“Recently we announced a major headcount reduction and manufacturing realignment. These were difficult but necessary decisions designed to eliminate costs and keep the business appropriately sized in the face of challenging conditions. We will continue to pursue opportunities to reduce costs as we move forward.”
Last month, Furniture Brands gained breathing room in its covenants with bondholders and creditors by agreeing to put up some property as collateral, according to a regulatory filing. Holliman said Wednesday that a temporary amendment to its borrowings allows the company until the end of June to put in place more permanent financing arrangements.
For the second quarter, Holliman said, “we do not see an improving marketplace, and as a result we expect net sales to be down around 15 percent versus the second quarter of last year. … As is our practice, we will provide an update on our second quarter expectations in early June.”
St. Louis-based Furniture Brands International Inc. (NYSE: FBN) manufactures furniture under the Thomasville, Henredon, Drexel Heritage, Maitland-Smith, Broyhill and Lane brands.
