For the first quarter of fiscal 2014:
Net sales were $114.1 million, a decrease of 2.6% from $117.1 million reported for the first quarter a year ago. Comparable store sales for the quarter ended October 5, 2013 decreased 2.8% compared to a decrease of 8.7% in the comparable period of the prior year and 7.1% in the fourth quarter of fiscal 2013. The sequential improvement in sales was driven by slight improvement in both traffic and conversion.
Gross margin decreased to 35.6% compared to 36.1% in the first quarter of fiscal 2013. The decrease in gross margin was primarily due to the increase in markdowns to clear through legacy products.
SG&A expenses were $50.1 million, or 43.8% of net sales, compared to $46.2 million, or 39.5% of net sales, for the same period in the prior year. The dollar increase in SG&A expenses was primarily attributable to the earlier timing of marketing events and internal sales conference expenses.
Net loss for the first quarter of fiscal 2014 was $9.2 million, or $0.12 per share, on 79.1 million shares outstanding compared to net loss of $2.6 million, or $0.03 per share, on 84.4 million shares outstanding for the same period of the prior year. Note that the fiscal 2014 net loss reflects the continuing impact of maintaining a valuation allowance against deferred tax assets and thus our effective tax rate approximates 0%.
During the quarter ended October 5, 2013, the Company opened one outlet store and closed six bebe stores and two 2b bebe stores.
Steve Birkhold, Chief Executive Officer, commented, “Fiscal first quarter 2014 marks the beginning of our turnaround journey. We saw a favorable response to our new merchandising strategy while we continued to clear through legacy merchandise during the quarter. While the retail environment remains difficult, we continue to focus on our turnaround initiatives and remain confident that we are taking the right strategic direction. Looking ahead, we will focus on executing our transitional strategies as we move forward. I would like to thank our shareholders for their support as we continue our work to transform the business and focus on sustainable growth in the long-term.”
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