Gordmans Chief pleased with solid net income
Gordmans Stores Inc, an Omaha-based apparel and home décor retailer, announced results for its first quarter (thirteen weeks) ended April 30, 2011.
First Quarter Highlights
• Net sales increased 5.2% to $117.7 million compared to $111.9 million in the first quarter of fiscal 2010.
• Gross profit margin increased 50 basis points over the first quarter of fiscal 2010 to 47.5%.
• Net income increased 14.2% to $7.3 million compared to $6.4 million in the first quarter of fiscal 2010.
• Diluted earnings per share of $0.38 exceeded the high end of the Company's guidance by $0.02.
Jeff Gordman, President and Chief Executive Officer, stated: "We are pleased with our solid net income increase of 14.2%, a 50 basis point improvement in gross margin, and management of expenses during the first quarter of 2011. However, our comparable store sales increase of 0.9%, which came on top of a very strong 15.4% comparable store sales increase in the first quarter of 2010, was short of our expectations primarily due to soft Easter sales and macro issues impacting our regional, primarily Midwest concentration.
“Our total sales increase of 5.2% was primarily attributable to two new stores that we opened this year in Minneapolis, a new market for Gordmans, as well as two new stores that opened in fiscal 2010. As we previously announced, we accelerated our expansion plans for fiscal 2011 and will be opening five additional stores, including one relocation, over the remainder of this year."
First Quarter Financial Results
Net sales for the thirteen weeks ended April 30, 2011 increased 5.2% to $117.7 million from $111.9 million for the same period last year, which translated into a 0.9% comparable store sales increase. Gross profit increased by 6.5% to $55.9 million, or 47.5% of net sales, from $52.5 million, or 47.0% of net sales, in the first quarter of fiscal 2010.
Selling, general and administrative costs were $44.1 million, or 37.5% of net sales, compared to $42.2 million, or 37.8% of net sales, in the first quarter of fiscal 2010. The Company reported a 14.2% increase in net income to $7.3 million, or $0.38 per diluted share (based on 19,266,694 dilutive shares outstanding), compared to net income of $6.4 million, or $0.39 per diluted share (based on 16,167,302 dilutive shares outstanding), in the first quarter of fiscal 2010.
Based on current comparable store sales trends, the Company has revised its full year outlook. For the fiscal year ending January 28, 2012, management now expects net sales to be between $553 and $557 million, which reflects the current comparable store sales trend. On that basis, diluted earnings per share are projected to be in the range of $1.18 to $1.23 (using a diluted share count of approximately 19.2 million), which includes approximately $1.0 million of additional stock compensation expense.
For the second quarter of fiscal 2011 ending July 30, 2011, Gordmans currently expects net sales to be between $116 million and $117 million, which also reflects the current comparable stores sales trend. The Company projects diluted earnings per share in the range of $0.10 to $0.11 (using a diluted share count of approximately 19.4 million).