Home / Knowledge / News / Apparel/Garments / Frederick's of Hollywood Q2 FY'13 sales fall 25.3%
Frederick's of Hollywood Q2 FY'13 sales fall 25.3%
19
Mar '13
Frederick's of Hollywood Group Inc. announced the financial results for its fiscal 2013 second quarter ended January 26, 2013.  The Company also reported that, effective March 15, 2013; it has terminated its employment agreement with Don Jones, the Company's President and Chief Operating Officer. The Company's CEO, Mr. Thomas Lynch, will assume Mr. Jones' duties.

Fiscal 2013 Second Quarter Compared to Fiscal 2012 Second Quarter:

-Net loss applicable to common shareholders was $10.0 million or $(0.26) per diluted share, compared to a net loss of $3.5 million or $(0.09) per diluted share
- Adjusted EBITDA from continuing operations was a loss of $7.5 million compared to a loss of $2.3 million.  A reconciliation of GAAP results to Adjusted EBITDA, a non-GAAP measurement, is provided in the accompanying table
- Net sales decreased 25.3% to $24.3 million from $32.5 million
- Comparable store sales decreased 15.7%
- Total store sales decreased 19.0% to $15.5 million
- Direct sales decreased 32.5% to $8.1 million
- Other revenue, consisting primarily of shipping revenue, commissions earned on direct sell-through programs and breakage on gift cards, decreased 49.5% to $0.7 million
- Gross margin, as a percentage of net sales, was 24.1% as compared to 31.2%
- Selling, general and administrative expenses increased by $0.5 million to $13.7 million, or 56.4% of sales, from $13.2 million, or 40.7% of sales

Fiscal Six Months Ended January 26, 2013 Compared to Fiscal Six Months Ended January 28, 2012:

- Net loss applicable to common shareholders was $15.2 million, or $(0.39) per diluted share, compared to a net loss of $5.9 million, or $(0.15) per diluted share
-Adjusted EBITDA was a loss of $11.4 million compared to a loss of $3.3 million.  A reconciliation of GAAP results to Adjusted EBITDA from continuing operations, a non-GAAP measurement, is provided in the accompanying table
- Net sales decreased 23.2% to $46.7 million from $60.9 million
- Comparable store sales decreased by 16.3%
- Total store sales decreased 19.9% to $30.6 million
- Direct sales decreased 27.2% to $14.6 million
- Other revenue, consisting of shipping revenue, commissions earned on direct sell-through programs and breakage on gift cards, decreased 41.4% to $1.5 million
- Gross margin decreased to 25.5% as compared to 32.4%
- Selling, general and administrative expenses decreased by $0.9 million to $23.8 million or 50.9% of sales, from $24.7 million, or 40.5% of sales

"We are disappointed by the operational and financial issues that have held us back from reconnecting with our customers, which led to sales results that were counter to much of the retail sector.  Therefore, we have implemented a plan to refocus on our lingerie products. This plan included the $10 million capital infusion from Five Island Asset Management LLC, a subsidiary of Harbinger Group Inc., which was announced just last week.

"This capital infusion will play an important role in stabilizing our business and will allow us to improve sales by maintaining appropriate inventory levels in the categories our customers are looking for.  We are continuing to balance our revenues and expenses, including having me assume the responsibilities of President and COO," stated Mr. Thomas Lynch, the Company's Chairman and CEO.

Frederick's Of Hollywood


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