Improved performance at Groupe Bikini despite ongoing downturn
Groupe Bikini Village inc. released the results of its third quarter, ended October 31, 2009, which reflected improved performance over the third quarter of 2008 despite ongoing economic challenges in its industry.
The Company posted net sales for the third quarter and the nine-month period ended October 31, 2009 of $6.7 million and $28 million, respectively, compared to $5.2 million and $27.9 million in the corresponding periods of the previous year. Comparable sales, which compare sales from the same number of stores during the same period, increased by 18.6% for the third quarter, while they decreased by 5.3% for the nine-month period ended on the same date.
"While Groupe Bikini Village, like many other North American businesses, faced a number of outside challenges since fall 2008, and experienced reduced gross margins due to additional discounts required to spur sales in June and July, the steamy August we enjoyed in many of our markets made up for the early summer sales lag," said Yves Simard, President and CEO of Groupe Bikini Village. "The result is a strong sales performance for the third quarter - and, with it, an improvement in the profitability of what is traditionally, due to the seasonal nature of our business, a less successful quarter."
Operating loss for the third quarter totalled $1.9 million, $0.7 million less than the $2.6 million operating loss in the same period in 2008. This significant reduction in operating loss, in a quarter which is historically marked by operating losses due to the seasonal nature of our business, was the direct result of increased business volume and our strategy to tightly manage inventories, focus on full-price selling and control costs - all of which led to stronger overall gross margin and store contribution.
Operating loss for the nine-month period ended October 31, 2009 totalled $1.3 million compared to operating loss of $137,000 in the same period in 2008. This $1.2 million increase in operating loss was essentially due to a margin decrease in the first two quarters of 2009, and higher store operating costs.
The decrease in our margins in the first half of 2009 resulted from: additional markdowns required in the face of the challenging retail conditions and unfavourable weather conditions; higher store operating costs resulting from the greater number of stores in operation and increased rental expenses on existing stores; and increased salary expenses, mostly in the third quarter. Salary expenses in the third quarter of 2008 were lower due to an overall lower number of stores in operation and the reduction in salaries that came with the temporary closure of some stores for renovations during that quarter.
For the quarter ended October 31, 2009, Groupe Bikini Village's net loss was $1.8 million (($0.01) per basic and diluted share), as compared to a net loss of $2.1 million (($0.01) per basic and diluted share) for the same quarter in the previous year. For the nine-month period ended on that date, net loss totalled $2.3 million (($0.01) per share, basic and diluted), as compared to a net loss totalling $1.1 million (($0.01) per share, basic and diluted) in the same period in 2008.