Gottschalks Inc reported unaudited financial results for the second quarter. Net loss for the second quarter was $4.4 million, or $0.33 per diluted share, compared to net loss of $4.8 million or $0.35 per diluted share, for the second quarter of fiscal 2007.
For the first six months of fiscal 2008, net loss was $9.5 million or $0.72 per diluted share, compared to a net loss of $9.4 million or $0.69 per diluted share in the first six months of fiscal 2007.
As previously reported, for the second quarter, which consisted of 13 weeks, same store sales decreased 7.3% and total sales decreased 7.8% to $133.7 million from $145.0 million for the second fiscal quarter last year. On a year-to-date basis, which consisted of 26 weeks, same store sales decreased 8.9%.
Total sales on a year-to-date basis decreased 9.8% to $258.8 million compared to $286.8 million in the same period last year. The Company operated one less store for the quarter and year-to-date periods compared to the same periods of the prior year.
Jim Famalette, Chairman and Chief Executive Officer of Gottschalks, stated, “We are pleased that we were able to reduce our net loss for the second quarter, despite persistent challenges in the macro environment. Although we experienced pressure on our sales, we remain encouraged by our ability to consistently increase our credit card sales penetration and grow our credit card revenue compared to last year.
In addition, we continue to prudently manage those areas of our business within our control. We ended the quarter with retail inventory levels down 9.7%, while at the same time increasing our inventory turn in the period. During the quarter, we also reduced our SG&A expenditures by $3.9 million as we continue to carefully control our costs.”
Commenting on the Company's outlook, Mr. Famalette stated, “We will continue to take a very conservative outlook on our business in the near-term. However, we believe that we have the right strategies in place and we continue to work to further strengthen our financial structure to better position our organization and prepare us for the future. Recently, we completed the consolidation of our dual Bakersfield East Hills Mall stores into one store and we continue to identify opportunities to leverage our real estate assets.
We are pleased to have signed an agreement to sell our wholly-owned store in Antelope Valley Mall, in Palmdale, California, which currently also has dual Gottschalks stores. The sale of this store will allow us to take advantage of the more favorable terms of our leased store in this mall as well as enable us to streamline our operations and pay down debt.
We expect this sale to close in September at which time a significant operating gain will be recorded. We also remain on track to open our new store in Bend, Oregon. Our team is efficiently executing our strategic initiatives as we remain focused on positioning theCompany to benefit as the economic environment improves.”