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Justice store brand embraced by customers
17 Nov '09
5 min read
The Company recognized a $3.9 million pretax impairment charge in the third quarter, reflecting an adjustment of store assets. The non-cash store asset impairment charge related to 28 stores partially offset the significant decline in buying and occupancy expenses during the period.
Store operating, general and administrative expenses, inclusive of merger-related expenses of $2.8 million, improved to $71.4 million from $72.3 million in 2008. The majority of the improvement was associated with reductions in store payroll and other stores expense. During the third quarter of fiscal 2009, SG&A improved by 90 basis points to 27.5% of net sales.
Net interest expense was $3.2 million for the third quarter of fiscal 2009 compared to $1.8 million for the third quarter of fiscal 2008. The increase was primarily due to higher interest rates in 2009 related to the Company's February 23, 2009 amended credit facility.
The Company recognized income tax expense of $12.5 million in the third quarter of fiscal 2009. The amount of the third quarter 2009 tax expense was driven by the distribution of income and losses across legal entities and among taxing jurisdictions in which we operate, along with certain expenses related to the proposed merger which are non-deductible. This compared to the income tax expense of $0.8 million recognized in the third quarter of fiscal 2008, which exceeded pretax income due to the cumulative catch-up of taxes from the beginning of the year, declines in the value of certain non-deductible investments and the distribution of income and losses across legal entities and among various taxing jurisdictions.
Capital Investment
Capital expenditures for the third quarter of fiscal 2009 and year-to-date were $1.4 million and $ 8.0 million, respectively. This compares to $ 16.6 million and $57.4 million, respectively, for the corresponding 2008 periods. Capital expenditures for fiscal 2009 net of cash tenant allowances received are expected to be approximately $10 million, inclusive of the $8.0 million incurred to date. This is primarily composed of store signage changes of approximately $4 million, and new planned store openings as well as remodels.
Balance Sheet
At October 31, 2009 the Company had total current assets of $270.5 million, including $122.8 million in cash and cash equivalents, and total current liabilities of $113.7 million. Long term debt was $161.8 million, inclusive of $14.3 million in current maturities of long term debt. The Company's current ratio was 2.4 and the debt-to-equity ratio was .90.
Controlled Inventories
Total inventories at the end of the third quarter of fiscal 2009 were down 23.2% per square foot at cost, compared to total inventories at the end of the third quarter of fiscal 2008. In-store inventories for the third quarter of fiscal 2009 were down 24.4% per square foot at cost as compared to the third quarter of2008.
Stores
Tween Brands ended the quarter with 905 stores. During the third quarter 2009, the Company opened 5 stores and closed 3 stores. Fourteen stores have been closed year-to-date.
Store operating, general and administrative expenses, inclusive of merger-related expenses of $2.8 million, improved to $71.4 million from $72.3 million in 2008. The majority of the improvement was associated with reductions in store payroll and other stores expense. During the third quarter of fiscal 2009, SG&A improved by 90 basis points to 27.5% of net sales.
Net interest expense was $3.2 million for the third quarter of fiscal 2009 compared to $1.8 million for the third quarter of fiscal 2008. The increase was primarily due to higher interest rates in 2009 related to the Company's February 23, 2009 amended credit facility.
The Company recognized income tax expense of $12.5 million in the third quarter of fiscal 2009. The amount of the third quarter 2009 tax expense was driven by the distribution of income and losses across legal entities and among taxing jurisdictions in which we operate, along with certain expenses related to the proposed merger which are non-deductible. This compared to the income tax expense of $0.8 million recognized in the third quarter of fiscal 2008, which exceeded pretax income due to the cumulative catch-up of taxes from the beginning of the year, declines in the value of certain non-deductible investments and the distribution of income and losses across legal entities and among various taxing jurisdictions.
Capital Investment
Capital expenditures for the third quarter of fiscal 2009 and year-to-date were $1.4 million and $ 8.0 million, respectively. This compares to $ 16.6 million and $57.4 million, respectively, for the corresponding 2008 periods. Capital expenditures for fiscal 2009 net of cash tenant allowances received are expected to be approximately $10 million, inclusive of the $8.0 million incurred to date. This is primarily composed of store signage changes of approximately $4 million, and new planned store openings as well as remodels.
Balance Sheet
At October 31, 2009 the Company had total current assets of $270.5 million, including $122.8 million in cash and cash equivalents, and total current liabilities of $113.7 million. Long term debt was $161.8 million, inclusive of $14.3 million in current maturities of long term debt. The Company's current ratio was 2.4 and the debt-to-equity ratio was .90.
Controlled Inventories
Total inventories at the end of the third quarter of fiscal 2009 were down 23.2% per square foot at cost, compared to total inventories at the end of the third quarter of fiscal 2008. In-store inventories for the third quarter of fiscal 2009 were down 24.4% per square foot at cost as compared to the third quarter of2008.
Stores
Tween Brands ended the quarter with 905 stores. During the third quarter 2009, the Company opened 5 stores and closed 3 stores. Fourteen stores have been closed year-to-date.
Tween Brands Inc
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