Casual Male Retail Group Inc., the largest retailer of big & tall men's apparel and accessories, reported operating results for the third quarter and nine months ended October 29, 2011.
Third Quarter Highlights (3QFY11 vs. 3QFY10) • Comparable sales increased 0.7% against prior year's comparable sales increase of 3.0% • Operating loss of $1.4 million as compared to operating loss of $0.8 million. • SG&A expenses include approximately $1.4 million, or $(0.03) per diluted share, for anticipated litigation settlements and incurred legal expenses to date. • Net loss of $(1.6) million, or $(0.03) per diluted share, compared to net income of $0.3 million, or $0.01 per diluted share. • Total sales decreased 0.6% to $89.4 million. • Gross margin decreased 70 basis points (20 basis points in merchandise margin and 50 basis points in occupancy expense) to 45.0% as compared to 45.7% for the prior year.
Nine Month Highlights (2011 vs. 2010) • Comparable sales increased 2.6% against prior year's comparable sales increase of 0.9%. • Operating income increased 7.3% to $10.8 million as compared to operating income of $10.1 million for the prior year. • Net income of $9.2 million, or $0.19 per diluted share, as compared to $10.0 million, or $0.21 per diluted share. • Total sales increased 1.4% to $286.2 million. • Gross margin increased 80 basis points to 46.8% as compared to 46.0% for the prior year.
Destination XL Through the end of the third quarter of fiscal 2011, the Company has opened 7 new DXL stores with an additional 5 stores planned in the fourth quarter of fiscal 2011, resulting in 16 DXL stores opened by the end of fiscal 2011 (a decrease from previous guidance of 20 stores).
In addition, the Company anticipates opening 35-40 (an increase from previous guidance of 25 -30 stores) Destination XL stores in fiscal 2012. Because of the real estate and customer demographics, the size of each store will vary between 6,000 to 12,000 square feet, to accommodate each market.
During the third quarter, the Company introduced its DXL catalog and launched its DXL website. The Company's customers can now shop across all brands and product extensions and the new website brings all of its customers under one brand.
Fiscal 2011 Outlook As a result of the sales shortfall that the Company experienced during the third quarter of fiscal 2011, the Company has revised its earnings forecast for fiscal 2011. For fiscal 2011, the Company expects earnings to be $0.35 to $0.38 per diluted share. This is a decrease from the Company's previous guidance of $0.40 to $0.45 per diluted share. The Company's revised earnings guidance is as follows:
• Total sales of $397.5 million to $402.5 million (a decrease from previous guidance of $405 - $410 million). Total sales for fiscal 2011 are expected to be lower than our previous guidance due to the decrease in store traffic experienced during the third quarter of fiscal 2011.