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Hancock Fabrics runs into a little snag this spring.

Article Excerpt
TUPELO -- Even though Hancock Fabrics Inc. (NYSE: HKF) is among Mississippi's most successful public companies, CEO Larry G. Kirk is looking for improvement.

"First quarter results were very disappointing," said Kirk. "Although normal store operating costs were reasonably well controlled, nonrecurring expenses were magnified by the negative leverage of lower comparable store sales. In hindsight, we did not have a strong enough offering of spring merchandise, and it was late reaching our stores as a result of the transitioning of distribution operations to our new Baldwyn facility. Although customer traffic increased from a year ago, our average sale was lower because of the shortage and lateness of spring product."

Because most consumers were buying goods at lower price points, retail stores reported more activity in seasonal clearance items, placing pressure on gross margins, said Kirk.

"In addition to extra overtime, temporary labor and transport costs to complete the distribution...

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