Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-03-16
NOVELTY CHAINS
PROFITS DECLINE
Decrease of 9.89 Per Cent
Revealed in Combined Re-
ports of Four Firms.

NEW YORK, March 16.-Net profits
If the four more important novelty chains
F. w. Woolworth Co., s. S. Kresge Co.,
S. H. Kress & Co. and McCrory Stores
Corporation-last year were affected to
a greater extent by the prevailing un-
satisfactory business conditions than
were their sales. While the combined
volume of the four concerns was OH
1856 per cent, net profits available for
dividends showed a recession of 9.89
per cent. The sharp decrease in earn
ings was chiefly due to the precipitate
decline in merchandise prices entailing
heavy inventory write-downs, although
lower dollar sales also eXerted their adj
verse influence on the final results.
Combined net profits of the four COM
panies in 1880, aggregating $50 1858, 18l,
as compared with $53,674,097 in 1929,
were the lowest since 1926, when they
totaled $47,773,233. The peak OF $751;
777,155 for the four chains was eStab-
lished in 1928.
lower earnings. while in the previous
year Woolworth and Kress showed in
creases and Kresge and McCrory de-
creases.
Showing Creditable.
Notwithstanding a sales decline OF
$13,758,567 or As per cent from the
III
in 1880, was able to make cred1table
earnings showing. Net profit available
for dividends amounted to $34 $50,
equivalent to 1856 a share on the out
standing 9,750,000 common shares OF
$40 par common stock, and showed a
decline of 2.6 per cent from 1929. Per
share profits were 10 cents below the
1866 reported for the previous year.
WoolWorth'S store earnings last year
al t4rg from
other sources. Net rental income adj
vanced $45,251, income from securities
owned $757,381, and interest, ETC.,
$416,305. These gains were offset to
the extent OF $97,819 by a decline Of
that amount in undistributed current
earnings of unconsolidated foreign sub
salaries. In 1880 the company derived
total revenue of $12,019,944 from those
sources, made up as follows: $518,35l
from net rental from subtenants,
$3,969,90 from undistributed earnings
of the English and German subst-
diariet, $5,278,813 from securities owned.
AS a result of a sharper decline in
sales than in earnings, Woolworth last
year was able to make a good showing
in its profit margin. On each dollar
of sales of $289, 288, sos in 1880, the
company realized net profit of 1901
cents. This compared with 11.T7 cents
in 1929 and 1892 cents in 1928. The
peak of 1896 cents occurred in 1927.
The profit margin Of Woolworth is not
really representative of the activities Of
the parent company alone, in that dur
ing recent years dividends and undis-
tributed current earnings of its foreign
subsidiaries have been included in the
company's profit, while the sales Of
these aff1liates have been excluded.
McCrOry Increase.
Kresge last year realized 7.06 cents
on each dollar of sales, as compared
with 9.56 cents in the preceding year
and 1851 cents in 1928. The high point
was reached in 1923, when the profit
margin amounted to 11.60 cents. From
that time on, with the exception of a
slight turn for the better in 1928, the
trend has been downward.
In 1880 Kresge'S profit margin de-
clined to TIL cents on the dollar, the
lowest point in nine years.
McCrory was the only one Of the
four chains to increase its profit mar
gin in 1880. The figure of sol cents
compared favorably with 4.97 In 1928,
but was considerably lower than in
other preceding years.