Gross profit margin up at Omaha-based apparel retailer

03 Sep '11

5 min read

Gordmans Stores Inc announced results for its second quarter (thirteen weeks) and six month period (twenty-six weeks) ended July 30, 2011.

Second Quarter Highlights:
• Net sales increased 3.4% to $117.0 million compared to $113.1 million in the second quarter of fiscal 2010.
• Gross profit margin increased 70 basis points over the second quarter of fiscal 2010 to 44.9%.
• Diluted earnings per share of $0.15.
• Six Month Highlights
• Net sales increased 4.3% to $234.7 million compared to $225.0 million for the six months ended July 31, 2010.
• Gross profit margin increased 70 basis points over the same six month period last year to 46.2%.
• Net income increased 5.9% to $10.2 million compared to $9.7 million in the first six months of fiscal 2010.

Jeff Gordman, President and Chief Executive Officer, stated: "Our comparable store sales increase of 0.4% for the second quarter of fiscal 2011, which came on top of an 8.3% comparable store sales increase in the second quarter of 2010, was in line with the guidance that we provided in our last earnings call. Our total sales increase of 3.4% for the second quarter of 2011 was primarily attributable to two new stores that we opened in Minneapolis, a new market for our Company, in the first quarter of this year. Our bottom line benefited versus our guidance from strong gross profit margins, which were 70 basis points greater than last year, as well as solid management of store level expenses. However, net income fell short of last year's level by approximately $0.3 million due in large part to pre-opening expenses for stores that opened late in the second quarter or will open in the third quarter."

Second Quarter Financial Results
Net sales for the thirteen weeks ended July 30, 2011 increased 3.4% to $117.0 million from $113.1 million for the same period last year, which translated into a 0.4% comparable store sales increase. Gross profit increased by 70 basis points to $52.5 million, or 44.9% of net sales, from $49.9 million, or 44.2% of net sales, in the second quarter of fiscal 2010. Selling, general and administrative costs were $47.6 million, or 40.7% of net sales, compared to $44.3 million, or 39.2% of net sales, in the second quarter of fiscal 2010. Net income for the second quarter of fiscal 2011 of $2.9 million, or $0.15 per diluted share (based on 19,390,752 dilutive shares outstanding), compares to net income of $3.3 million, or $0.20 per diluted share (based on 16,173,746 dilutive shares outstanding), in the second quarter of fiscal 2010.

Six Month Financial Results
Net sales for the twenty-six weeks ended July 30, 2011 increased 4.3% to $234.7 million from $225.0 million for the same period last year, which translated into a 0.7% comparable store sales increase. Gross profit increased by 70 basis points to $108.4 million, or 46.2% of net sales, from $102.5million, or 45.5% of net sales, in the prior year. Selling, general and administrative costs were $91.6 million, or 39.0% of net sales, compared to $86.6 million, or 38.4% of net sales, in the prior year. The Company reported a 5.9% increase in net income to $10.2 million, or $0.53 per diluted share (based on 19,320,445 dilutive shares outstanding), compared to net income of $9.7 million, or $0.60 per diluted share (based on 16,185,238 dilutive shares outstanding), in the first twenty-six weeks of fiscal 2010.

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