Although National Lumber & Supply Inc., the Fountain Valley-based home center chain, posted a 102% increase in fourth-quarter 1984 earnings, its earnings for the entire year plunged 40% from 1983 profits, the company reported Tuesday.
National Lumber earned $341,000 for the fourth quarter of calendar 1984, compared to earnings of $153,000 in the fourth quarter of the previous year.
For the year, National Lumber had earnings of $1.3 million, compared to $2.2 million for 1983. V.J. Carnevale, National Lumber's vice president of finance, said the annual figures were more indicative of the mounting competition facing the company than were the fourth-quarter results.
Carnevale said the 1984 fourth-quarter results were something of a quirk, boosted by leftover corporate reserves and lower operating costs than in the fiscal 1983 quarter, when the company incurred the added expense of going public.
During the 1984 fourth quarter, sales rose 7%, boosted by price increases on National Lumber's merchandise. Fourth-quarter revenues were $31.7 million, up from $29.7 million in the 1983 fourth quarter.
For the year, revenues were $127.9 million, up 12% from $114 million in the prior year.
Within the last 18 months, Carnevale said, several additional companies serving a do-it-yourself clientele such as Grossman's and Home Club, have begun to compete head to head with National Lumber in its sales territory, which includes Orange, Los Angeles, San Bernardino and Riverside counties. To offset heavy advertising by both its new and old competitors, Carnevale said, National Lumber was forced to spend more money last year on its own advertising and to restrict the price markups on its merchandise.
Also, he said, National Lumber's 1984 earnings were dampened by the cost of opening new stores in Culver City, Covina and Ontario. Continuing on an expansion plan, he said, the company plans to add four more stores this year, including its first in San Diego County, for a total of 19 outlets.