Casual Male sees net income jump in Q4

21 Mar '11

3 min read

Casual Male Retail Group Inc, the largest retailer of big & tall men's apparel and accessories, reported operating results for the fourth quarter and fiscal year ended January 29, 2011.

Fourth Quarter Highlights (4QFY10 vs. 4QFY09)

• Comparable sales increased 2.9% and total sales increased 0.7% to $111.5 million
• Gross margin decreased 100 basis points to 45.4%
• Net income increased to $5.3 million, or $0.11 per diluted share, from net income of $3.6 million, or $0.08 per diluted share

Fiscal 2010 Highlights (FY10 vs. FY09)

• Comparable sales increased 1.5% and total sales decreased 0.4% to $393.6 million
• Gross margin improved 166 basis points to 45.8%
• Net income increased to $15.4 million, or $0.32 per diluted share, from net income of $6.1 million, or $0.14 per diluted share
• Debt-free and cash positive at January 29, 2011, the Company has full availability of $63.0 million under the its credit facility and cash on hand of $4.1 million

David Levin, President and CEO, stated, "With essentially a flat sales base, we were able to double our operating income to $16.2 million from $8.0 million last year and significantly grow earnings per share to $0.32. In 2011, we are expecting continued improvement to earnings per share in the range of $0.40-$0.45. We anticipate our customer visits will slowly recover from the economic downturn and produce comparable sales growth of 4.0%-4.5%, gross profit margins will remain strong and improve slightly, and SG&A will increase only modestly.

“Furthermore, based on the strong initial performance of the DXL test stores in 2010, and overwhelming positive customer feedback, we are pursuing expansion of DXL with an additional 10-14 locations and the launch of a new, functionally rich DXL shopping website by the second quarter of 2011 providing a multi-channel DXL experience to our loyal customer base."

Sales

In the fourth quarter, total sales increased 0.7% to $111.5 million and comparable sales increased 2.9% as compared to the fourth quarter of fiscal 2009. For fiscal 2010, total sales decreased 0.4% to $393.6 million and comparable sales increased 1.5% as compared to fiscal 2009.

The comparable sales increase of 1.5% for fiscal 2010 consisted of a 0.5% increase in sales from the Casual Male XL business and a 2.7% increase in the Rochester business. On a comparable basis, sales from the Company's direct businesses increased by 3.2% and sales from its retail business increased 1.1%.

While traffic was down 4.2% for fiscal 2010, it was a substantial improvement from the -9.7% and -9.2% experienced in fiscal 2009 and fiscal 2008, respectively. Traffic trends were flat during the fourth quarter of 2010. In addition, the Company continued to see improvements each quarter from its sales productivity in its retail channel as measured by improved conversion rate (the percentage of store customers who make a purchase) and dollars spent per customer transaction.

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