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Bakers Footwear gross profit decrease in Q1
10 Jun '08
3 min read
Comparable store sales in February and March were down 16.1% but rebounded nicely in April, to flat comparable store sales, due to strong customer response to our open-toe footwear assortment, demonstrating the strength of our merchandising team.
During the quarter, we also achieved our cost reduction goals and continue to expect this effort to positively impact operating results this year. In addition, we were pleased to maintain our tight inventory discipline during the quarter with inventories at quarter end down 15% from the prior-year period.
As we begin the second quarter, we remain optimistic. Comparable store sales for the first five weeks of the second quarter are down 0.7% but, other than the first week of the quarter, due to reduced promotional activity, have improved each week with June sales starting off strongly positive. We expect continued positive comps given the increasing importance of our strongest performing category of open-toe footwear as the second quarter progresses.”
Mr. Edison continued, “We continue to believe we have adequate liquidity to operate throughout 2008 and a business plan that allows us to meet our debt covenants. In addition, we have continued to cut costs and eliminate underperforming stores. Both of these initiatives will augment our liquidity and profit plans.”
The Company continues to face considerable liquidity constraints as a result of lower sales in the first quarter and through the first five weeks of the second quarter. As of May 3, 2008, the Company had negative working capital of $12.8 million and unused borrowing capacity under its revolving line of credit of $2.5 million. As of May 31, 2008, unused borrowing capacity was $0.6 million.
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During the quarter, we also achieved our cost reduction goals and continue to expect this effort to positively impact operating results this year. In addition, we were pleased to maintain our tight inventory discipline during the quarter with inventories at quarter end down 15% from the prior-year period.
As we begin the second quarter, we remain optimistic. Comparable store sales for the first five weeks of the second quarter are down 0.7% but, other than the first week of the quarter, due to reduced promotional activity, have improved each week with June sales starting off strongly positive. We expect continued positive comps given the increasing importance of our strongest performing category of open-toe footwear as the second quarter progresses.”
Mr. Edison continued, “We continue to believe we have adequate liquidity to operate throughout 2008 and a business plan that allows us to meet our debt covenants. In addition, we have continued to cut costs and eliminate underperforming stores. Both of these initiatives will augment our liquidity and profit plans.”
The Company continues to face considerable liquidity constraints as a result of lower sales in the first quarter and through the first five weeks of the second quarter. As of May 3, 2008, the Company had negative working capital of $12.8 million and unused borrowing capacity under its revolving line of credit of $2.5 million. As of May 31, 2008, unused borrowing capacity was $0.6 million.
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Bakers Footwear Group Inc
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