Total sales for the quarter increased 3.6% to $395 million from $382 million in the prior year quarter ended July 28, 2012. Comparable store sales increased 1.7%. The Company noted that its men’s, children’s, junior’s, cosmetics and footwear categories all had comparable store sales increases for the quarter that exceeded the Company average. Geographically, the Company’s best performing regions were the Southwest and South Central.
The Company reported record adjusted earnings for the second quarter, excluding one-time items, of $0.41 per diluted share. This compares to earnings of $0.37 per diluted share, last year. The Company noted that adjusted earnings per share were up 11% over last year.
“After a slow start to the quarter, sales improved as the weather normalized,” said Michael Glazer, President and Chief Executive Officer. “We ended the quarter with a nice surge from the start of the back-to-school shopping period. We are pleased with our sales performance and record adjusted earnings for the quarter. However, an elevated promotional environment and shortfall in sales at the South Hill stores prevented our earnings from being even higher. While the operational components of the consolidation have been completed, the alignment of merchandise assortments in the stores is taking longer than expected. We are confident that our South Hill stores sales will steadily improve during the fall season as our assortments become more congruent throughout all stores.”
For the first six months of the fiscal year, the Company reported total sales of $774 million and a 1.2% comparable store sales increase. Adjusted earnings, excluding one-time items, were $0.39 per diluted share.
Mr. Glazer concluded, “Based on the heightened promotional environment and the overall retail market weakness, it’s prudent to adjust our sales and earnings guidance. We are now forecasting comparable store sales for the second half of the year to be flat to up 2.0%. As a result of our lower sales assumption, we are also revising our adjusted earnings outlook for the year to $1.30 to $1.40 per diluted share.”
Reported Earnings and One-Time Items
Including one-time items, the Company reported earnings for the second quarter of $9.6 million, or $0.29 per diluted share.
One-time items, which total approximately $6.5 million, or $0.12 per share, are associated with the consolidation of the Company’s South Hill, Virginia operations into its Houston headquarters. Of the $6.5 million, $4.4 million is included in gross profit and $2.1 million is included in SG&A expenses.
For the first six months of the fiscal year, the Company reported earnings of $2.8 million, or $0.08 per diluted share, this year compared to $11.2 million, or $0.36 per diluted share, last year. One-time items total approximately $16.2 million, or $0.31 per share, this year versus approximately $3.0 million, or $0.06 per share, last year.
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