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Gottschalks falls Q1 guidance

07 Jun '07

3 min read

Gottschalks Inc reported unaudited financial results for the first quarter of fiscal year 2007. Net loss for the first quarter was $4.7 million, or $0.34 per diluted share, compared to net loss of $4.0 million, or $0.30 per diluted share, for the first quarter of fiscal 2006.

As previously reported, same store sales decreased 0.8% for the first quarter of 2007. Total sales decreased by 1.2% to $141.8 million from $143.5 million for the first fiscal quarter last year. The Company operated four fewer stores in the first quarter of 2007 compared to the same period of the prior year.

Jim Famalette, president and chief executive officer of Gottschalks, stated, “Our sales results and gross margin for the quarter were lower than we expected, primarily due to weakness in our home store merchandise."

However, we continued to see solid trends in our core merchandise categories, including shoes, dresses, sportswear and special sizes.

In addition, we achieved greater credit card sales penetration and increased credit revenue for the first quarter, as a result of our new and enhanced agreement for the operation of our proprietary credit card business.

"We are pleased to have reduced SG&A as a percent of sales, which is a reflection of our focus on expense management. Despite a more challenging sales environment, we were able to achieve bottom line results in line with our internal projections.”

Commenting on the Company's outlook, Mr.Famalette stated, “Looking forward, we believe our core merchandise areas will continue to perform well. In the remainder of the year, we will maintain our focus on strategic initiatives designed to increase sales, improve our operating performance and position the Company for long-term growth."

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