Third Quarter Fiscal 2013 Operating Results
Total net sales increased 10.0% to $1,064.5 million in the third quarter compared with last year. This increase was primarily attributable to a $53.2 million increase in sales related to new stores and stores previously opened that are not included in our comparable store sales, and a $37.0 million, or 3.9%, increase in comparable store sales.
Gross margin rate increased by 40 basis points to 39.0% in the third quarter compared with the prior year, driven by improved merchandise margin.
Selling and administrative expenses as a percentage of sales improved to 34.1% during the third quarter from 34.6% last year. The improvement was primarily related to the leverage benefit of our 3.9% comparable store sales increase during the quarter.
Adjusted EBITDA for the third quarter increased 28.3%, or $13.8 million, to $62.5 million compared with $48.7 million last year, representing an 80 basis point improvement in Adjusted EBITDA margin rate for the quarter. The increase in the Company’s Adjusted EBITDA was driven by our 10.0% total sales increase and improvements in both gross margin rate and SG&A leveraging.
Adjusted Net Loss increased $1.6 million during the third quarter to a loss of $3.3 million. Pro Forma Adjusted Net Loss per share increased to ($0.05) during the third quarter, compared to ($0.02) last year. This increase was driven by a reduction of our income tax benefit of $6.5 million and increased interest expense of $5.3 million.
Year to Date Fiscal 2013 Operating Results
Comparable store sales increased 5.0% and total net sales increased 9.9% to $3,093.2 million for the nine months ended November 2, 2013 compared with last year.
Gross margin increased by 50 basis points to 38.0% compared with last year, driven by improved merchandise margin.
Selling and administrative expenses as a percentage of sales improved to 32.9% from 33.6% last year. The improvement was primarily related to the leverage benefit of our 5.0% comparable store sales increase.
Adjusted EBITDA increased 33.6%, or $47.6 million, to $188.9 million compared with last year, representing a 110 basis point improvement in Adjusted EBITDA margin rate for the year to date period. The increase in the Company’s Adjusted EBITDA was driven by our 9.9% total sales increase and improvements in both gross margin rate and SG&A leveraging.
Adjusted Net Loss was $10.8 million, compared to a loss of $22.8 million last year. Pro Forma Adjusted Net Loss per share improved to ($0.15) during the first nine months of Fiscal 2013, compared to ($0.32) last year. The improvement is reflective of our sales and margin gains.
While our overall inventory balance increased $57.4 million to $902.4 million at November 2, 2013, our comparative store inventory decreased 5.6%. The overall increase in our inventory balance was primarily driven by 23 net new stores opened since October 27, 2012 as well as increased pack and hold inventory.
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