Gordmans Stores, Inc., an Omaha-based apparel and home décor retailer, announced results for its first quarter (thirteen weeks) ended May 3, 2014.
First Quarter Highlights
Net sales increased 8.8% to $143.0 million compared to $131.4 million in the thirteen weeks ended May 4, 2013.
Three new stores were opened in two new markets, including one new state, and one existing market in the first quarter as part of our expansion strategy.
First Quarter Financial Results
Net sales for the thirteen weeks ended May 3, 2014 increased 8.8% to $143.0 million from $131.4 million for the thirteen weeks ended May 4, 2013. Comparable store sales for the first quarter of fiscal 2014 decreased by 2.7% versus a 10.5% comparable store sales decrease in the first quarter of fiscal 2013. By merchandise category, Apparel generated the best comparable sales performance, followed by Accessories, then Home, with all categories experiencing a low single digit comparable store sales decrease.
Gross profit, which includes license fees, increased 7.4% to $63.4 million, or 44.3% of net sales, from $59.0 million, or 44.9% of net sales, in the first quarter of fiscal 2013. The 60 bps reduction was primarily due to higher promotional markdowns, as well as lower initial markup.
Selling, general and administrative costs were $63.4 million, or 44.3% of net sales, compared to $53.7 million, or 40.8% of net sales, in the first quarter of fiscal 2013. As a percentage of net sales, the increase in expenses was primarily due to deleveraging associated with the decline in comparable store sales, delivery costs associated with capitalized freight and depreciation expense, as well as non-recurring compensation and recruiting costs and pre-opening expenses related to a new corporate headquarters and new distribution center.
Interest expense increased to $1.2 million from $0.1 million in the first quarter of fiscal 2013 due to additional interest associated with the term loan entered into in August 2013 to fund a portion of the special cash dividend paid in September 2013.
"Our first quarter sales performance was driven by the ten new stores that we opened in fiscal 2013 and the three new stores that we opened in the first quarter of fiscal 2014, partially offset by a comparable store sales decline of 2.7%," commented Scott King, Interim Chief Executive Officer. "While we are disappointed with our first quarter results, we are encouraged that comparable store sales improved as the quarter progressed. We believe that the initiatives that we have put in place to realign our merchandise mix, modify our store presentation and adjust our marketing to focus on merchandise, value and urgency and utilize information obtained from our loyalty program will produce improved comparable store sales results as the year progresses."