The selling, general and administrative expenses for the first quarter were $186.4 million, or 33.2 per cent of net sales, compared to $182.5 million, or 31.3 per cent of net sales, for last year's first quarter. This increase of $3.9 million, or 2.1 per cent, primarily reflects investments in first quarter marketing and technology.
At the end of the first quarter, cash and marketable securities totaled $254.7 million compared to $169.8 million at the end of the first quarter last year. This $85.0 million increase primarily reflects cash generated from operating activities.
The effective tax rate was 27.9 per cent compared to 38.2 per cent for last year's first quarter. The reduction in our effective tax rate for current year of 10.3 per cent is primarily the result of the Tax Cuts and Jobs Act of 2017 ('US tax reform') which reduced the US corporate income tax rate from 35 per cent to 21 per cent.
"While we are pleased with the launch of our new sales-driving initiatives, first quarter customer traffic was challenging. We leveraged strong inventory management and targeted promotions, which resulted in an improvement in trends," said Shelley Broader, CEO and president.
"We are seeing initial success with our recently-launched ShopRunner partnership and we look forward to the ramp up of our brand offerings on Amazon and QVC. Over the long-term, we expect these new channels will drive stronger customer traffic and sales. We remain confident in our future and our ability to deliver sustainable growth and value creation for shareholders," added Broader.
For second quarter fiscal 2018, the company is anticipating a mid-to-high single digit decline in net sales and a low-to-mid single digit decline in consolidated comparable sales. The company predicts gross margin rate as a percentage of net sales to be approximately flat compared to second quarter fiscal 2017. The SG&A expenses are likely to be up slightly compared to second quarter fiscal 2017. The company hopes a mid-single digit decline in net sales and a low-to-mid single digit decline in consolidated comparable sales. (RR)
Fibre2Fashion News Desk – India
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