Net sales for the third quarter of fiscal 2013, including the extra retail week in January, were $112.9 million, a decrease of 6.7% from $121.0 million reported for the third quarter a year ago. As previously reported, comparable store sales for the quarter ended April 6, 2013, excluding the extra retail week in January, decreased 8.6% compared to an increase of 7.2% in the comparable period of the prior year.
Gross margin as a percentage of net sales decreased to 29.7% in the third quarter of fiscal 2013, compared to 38.7% in the third quarter of fiscal 2012. The decrease in gross margin as a percentage of net sales was primarily due to a significant increase in markdowns coupled with unfavorable occupancy leverage.
SG&A expenses were $52.2 million, or 46.2% of net sales, compared to $47.2 million, or 39.0% of net sales, for the same period in the prior year. The dollar increase in SG&A expenses was primarily driven by certain costs totaling $4.8 million which include store impairment charges, costs related to hiring of a new CEO, rebranding agency costs, as well as other transition related recruiting and severance costs.
In the third quarter of fiscal 2013, the Company recorded a non-cash provision for income taxes of $31.4 million to establish a valuation allowance against its net deferred income tax assets as well as to recognize the fiscal 2013 year to date impact of establishing the valuation allowance.
Although the Company generated taxable income from continuing operations for the past three fiscal years through the third quarter, the Company will likely be in a three-year cumulative loss position at the end of fiscal year 2013. Accounting rules require the Company to record a valuation allowance.
The valuation allowance has no impact on our ability to utilize loss carry forwards or tax assets in the future, and is not a reflection of our point of view about increasing the profitability of the business in the future. This allowance reduced the current quarter’s diluted EPS by $0.39 per share.
Net loss for the third quarter of fiscal 2013 was $49.3 million, or $0.62 per diluted share, on 80.1 million shares outstanding compared to net loss of $0.2 million, or $0.00 per share, on 84.3 million shares outstanding for the same period of the prior year. Non-GAAP1 adjusted net loss in the third quarter of 2013, excluding the aforementioned non-cash deferred tax asset valuation allowance was $11.6 million, or $0.14 per diluted share.
Net sales for the year-to-date period ended April 6, 2013 were $365.5 million, a decrease of 8.5% from $399.3 million for the year-to-date period ended March 31, 2012. Comparable store sales for the year-to-date period ended April 6, 2013 decreased 9.3% compared to an increase of 8.1% in the prior year.
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