Frederick's of Hollywood Group Inc. announced financial results for its fiscal 2012 third quarter ended April 28, 2012.
Thomas Lynch, the Company's Chairman and Chief Executive Officer, stated, "The positive steps that we have taken over the past two years to streamline and improve our operations have brought us closer to long term profitability.
“While there is still much left to accomplish, the Company now has a more stable foundation upon which to build. As a result of these positive steps, we recently secured a $24 million revolving credit line, which we believe is a sign of confidence for our business from the financial markets."
Mr. Lynch continued, "Results for the three months ended April 28, 2012 reflect an improvement of approximately $3.7 million in net income. An increase in vendor allowances to share the costs of promotional activity during the period was the primary reason for this improvement.
“We are implementing a partner-oriented approach that will allow us to continue to share product costs with our vendors on a going forward basis. We believe this will benefit both the Company and our vendors by helping push greater volume through our stores and e-commerce site, while improving our gross margins."
"We are continuing to shed unprofitable sales, as evidenced by the recent termination of leases for three of our poorest performing stores. These three stores had an aggregate four wall cash flow loss of $630,000 for fiscal year 2011, and accounted for $378,000 of the $647,000 decrease in total store sales for the third quarter of fiscal 2012."
"We are continually looking for ways to improve our profitability, including by re-evaluating our marketing strategy, focusing on higher margin product sales and expanding into new product categories. We recently launched our new denim collection in stores and online and expanded the availability of our shoes and ready-to-wear products into all of our retail locations. These product categories fit perfectly into our strategy to build Frederick's of Hollywood into a complete lifestyle brand," concluded Mr. Lynch.
Fiscal 2012 Third Quarter Compared to Fiscal 2011 Third Quarter:
- Net income was $3.3 million or $0.09 per diluted share, compared to a net loss of $0.4 million or $(0.01) per diluted share.
- Net sales decreased 7.4% to $30.2 million from $32.6 million.
- Comparable store sales increased 0.7% as compared to the three months ended April 30, 2011.
- &bsp; Total store sales decreased 3.3% to $19.0 million.
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