Gross profit margin up at Gordmans Stores

08 Dec '11

5 min read

Gordmans Stores Inc., an Omaha-based apparel and home décor retailer, announced results for its third quarter (thirteen weeks) and nine month period (thirty-nine weeks) ended October 29, 2011.

Third Quarter Highlights
• Net sales increased 6.5% to $131.6 million compared to $123.6 million in the third quarter of fiscal 2010.
• Gross profit margin increased 80 basis points over the third quarter of fiscal 2010 to 45.0%.
• Net income increased 11.1% to $4.7 million compared to adjusted net income of $4.3 million in the third quarter of fiscal 2010, which excludes pre-tax non-recurring charges of $10.6 million related to the Company's initial public offering in August 2010.
• Diluted earnings per share were $0.25.

Nine Month Highlights
• Net sales increased 5.1% to $366.3 million compared to $348.6 million for the nine months ended October 30, 2010.
• Gross profit margin increased 70 basis points over the same nine month period last year to 45.8%.
• Net income increased 7.5% to $15.0 million compared to adjusted net income of $13.9 million in the first nine months of fiscal 2010, which excludes non-recurring charges of $10.6 million related to the Company's initial public offering.
• Diluted earnings per share were $0.77.

Jeff Gordman, President and Chief Executive Officer, stated: "Our total sales increase of 6.5% for the third quarter of 2011 was attributable to six new stores that we opened in Minneapolis, Chicago and St. Joseph, MO during the first nine months of the year. Our comparable store sales decreased 1.3% for the third quarter of fiscal 2011, which compared to a 6.0% comparable store sales increase in the third quarter of 2010.

Net income exceeded adjusted net income for the same period last year as a result of strong gross profit margins, which were 80 basis points greater than last year and solid management of store level expenses. In addition, we shifted approximately $1.0 million of forecasted selling, general and administrative expenses, primarily related to marketing and hiring, from the third quarter to the fourth quarter of the year."

Third Quarter Financial Results
Net sales for the thirteen weeks ended October 29, 2011 increased 6.5% to $131.6 million from $123.6 million for the same period last year, while comparable store sales decreased 1.3%. Gross profit increased by 80 basis points to $59.2 million, or 45.0% of net sales, from $54.7 million, or 44.2% of net sales, in the third quarter of fiscal 2010.

Selling, general and administrative costs were $51.4 million, or 39.1% of net sales, compared to $58.4 million, or 47.3% of net sales, in the third quarter of fiscal 2010. Selling, general and administrative costs for the third quarter of fiscal 2010 include one-time, pre-tax charges of $10.6 million related to the Company's initial public offering in August 2010. Excluding these one-time expenses, non-GAAP adjusted selling, general and administrative costs were $47.8 million, or 38.7% of net sales, for the third quarter of fiscal 2010.

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