Tuesday Morning Corporation reported unaudited consolidated earnings results for the second quarter and six months ended December 31, 2015. For the quarter, the company reported net sales of $319,876,000 compared to $301,401,000 a year ago. Operating income was $20,571,000 compared to $24,222,000 a year ago. Income before income taxes was $20,021,000 compared to $23,916,000 a year ago. Net income was $18,944,000 or $0.43 per basic and diluted share compared to $23,658,000 or $0.54 per basic and diluted share a year ago.

For the six months, the company reported net sales of $522,204,000 compared to $503,609,000 a year ago. Operating income was $14,615,000 compared to $18,468,000 a year ago. Income before income taxes was $13,816,000 compared to $17,763,000 a year ago. Net income was $12,804,000 or $0.29 per basic and diluted share compared to $17,429,000 or $0.40 per basic and diluted share a year ago. Net cash provided by operating activities was $12,323,000 compared to $8,817,000 a year ago. Capital expenditure was $20,882,000 compared to $4,215,000 a year ago. The majority of capital expenditures related to new DC and investments in real estate strategy for new stores, relocation and remodels at existing stores as well as IT investments.

The company expects operating margins to decline in the fiscal third quarter driven by SG&A deleverage as it incurs expenses related to the Phoenix DC, a non-recurring charge associated with two store closures, expenses related to ongoing supply chain work, executive transitions, and a variety of other areas related to its ongoing transformational initiatives which are not expected to persist long term. Capital expenditure expects to spend in the range of $45 million to $50 million in fiscal 2016.