Joann Inc (NASDAQ:JOAN) stock plunges 23.62% (As on December 5, 11:15:15 AM UTC-4, Source: Google Finance) after the company in the third quarter of FY 23 has reported the 4.1 percent fall in net sales to the same period last year to $539.8 million, falling short of the analyst consensus estimate of $547.20 million with total comparable sales decreasing 4.1%. E-Commerce sales increased at a rate of 11.5% compared to last year and accounted for 13.1% of total company net sales in the third quarter, a 180-basis point increase in the penetration rate over last year. Gross profit of $282.1 million increased 0.4% compared to the third quarter of last year. Gross margin was 52.3%, an increase of 240-basis points compared to the third quarter of last year. Net loss of $21.6 million compared to a net loss of $17.5 million in the same quarter last year. Adjusted EBITDA of $37.5 million compared to $40.2 million in the same quarter last year. Cash used for operations increased $61.1 million and free cash flow decreased $38.1 million compared to the third quarter of last year. During the quarter, the company continued to execute against our Focus, Simplify and Grow cost reduction initiative in which the company had previously identified $200 million of targeted annual cost savings across supply chain, product, and SG&A expenses. the company has increased this target to $225 million, with the majority of the over-delivery in SG&A and Supply Chain expenses.

Moreover, Long-term debt, net was $1,148.2 million as of October 28, 2023, with cash and cash equivalents of $28.3 million. Strategic inventory receipt reductions and lower ocean freight costs resulted in total inventory down 9.0% compared to the third quarter last year. The company has completed a sale and leaseback transaction for its Hudson facility for a sale price of $34.5 million.

For full-year 2024 Net Sales guidance, Joann anticipates a decrease of 1% to 2%, which includes the inclusion of a 53rd week that is estimated to contribute approximately 2% to the overall sales. Adjusted EBITDA is expected to be between $85 million and $95 million, Capital Expenditures, Net of Landlord Contributions is expected to be between $35 million and $40 million and Free Cash Flow   is expected to have year over year improvement between $115 million and $135 million.