Jo-Ann Stores, Inc announced financial results for its fiscal 2007 first quarter ended April 29, 2006. Net loss for the first quarter of fiscal 2007 was $6.6 million, or $0.28 per diluted common share, compared with net income of $4.2 million, or $0.18 per diluted common share in the prior year.
Net sales for the first quarter increased 1.0 percent to $424.7 million from $420.7 million in the prior year. Same-store sales decreased 3.9 percent for the quarter, versus a same-store sales increase of 0.6 percent in the first quarter last year.
Review of Operating Results Gross margins for the first quarter of fiscal 2007 decreased to 46.6 percent of net sales from 48.7 percent in the first quarter last year, due to higher markdowns compared to last year. As expected, in an effort to sell-through excess and discontinued inventory, the first quarter gross margin rate performance was significantly impacted.
Selling, general and administrative expenses increased to 44.7 percent of sales in the first quarter of fiscal 2007 from 42.9 percent in the first quarter last year.
The increase in percentage is due to the lack of leverage resulting from the same-store sales performance, coupled with logistics costs related to the opening of the distribution center in Opelika, Alabama, and increases in operating expenses, primarily driven by increases in store fixed expenses and advertising, resulting from the larger number of superstores in our store base.
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