Gross margin rate was approximately flat at 28.5 per cent, as compared to last year’s second quarter, with lower merchandise margin offset by reduced occupancy costs as a percentage of sales.
"We made important progress in our turnaround efforts during the second quarter. We drove improvement in our comparable sales, saw a significant reduction in inventory levels, strengthened our financial position, hired two exceptional key executives and began to make progress on the strategic initiatives I outlined in the first quarter earning’s call," Keri Jones, president and chief executive officer, said.
For the reported period, selling, general & administrative expenses (SG&A) increased by $0.5 million, due to increased e-commerce investments, higher professional and consulting fees and a severance charge, partially offset by reduced store payroll and insurance expenses. As a percent of net sales, SG&A increased approximately 20 basis points to 33.9 per cent.
Cash and cash-equivalents totaled $23.1 million as of August 4, 2018 as compared to $22.6 million in the same period last year. Total inventory was $40.2 million at the end of the second quarter as compared to $41.9 million at the end of the second quarter last year. Merchandise inventory was down 4 per cent at the end of the quarter as compared to the end of last year’s second quarter, reflecting our efforts to turn inventory faster.
Capital expenditures for the second quarter of fiscal 2018 were $0.8 million compared to $1.0 million in last year’s second quarter. Capital expenditures in the second quarter this year primarily reflected investments in technology associated with omni-channel capabilities.
"Looking ahead, we remain intently focused on advancing these initiatives which include enhancing and simplifying her shopping experience, executing a disciplined promotional strategy, continuing to expand our omni-channel capabilities, building our customer base and reducing our cost structure. We expect these initiatives to begin to take hold this fiscal year and we believe we will deliver improved gross margin, drive year over year sales growth, and achieve meaningful improvement in earnings and cash flow in fiscal 2019," concluded Jones. (RR)
Fibre2Fashion News Desk – India
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