Sherman Oaks-based Shoe Pavilion gross profit decline in Q2
13 Aug '07
3 min read
Shoe Pavilion Inc announced financial results for the second quarter ended June 30, 2007.
Net sales increased 19.5%, or $6.1 million, to $37.5 million from $31.4 million for the second quarter ended June 30, 2007. Comparable store net sales for the second quarter decreased 1.0% from the same period in fiscal 2006. Sales from our new stores and relocated stores contributed $9.1 million in the second quarter ended June 30, 2007.
Gross profit was 29.3% in the second quarter compared to 34.9% in the same period last year. The decrease primarily reflects higher occupancy costs due to the rapid rollout of new stores during the past year and a reduction in selling margins.
Selling, general and administrative expenses increased to 32.5% of net sales compared to 29.2% in the year-ago period primarily reflecting de-leveraging from the lower than expected net sales.
A net loss of $1.1 million was incurred in the second quarter, or $0.11 per diluted share, compared to net income of $1.0 million, or $0.10 per diluted share, for the second quarter of 2006.
Dmitry Beinus, Chief Executive Officer, stated, “Our results for the second quarter are lower than we initially anticipated as a result of outside factors which continue to affect the 24 stores opened in the last year."
"Most of the stores we rolled out in 2006 were in new shopping centers where we have experienced slower than expected traffic due to ongoing construction as well as it taking longer than planned for other retailers to open stores at those centers.”
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