Clothing store Goody's releases Q2 & July sales

04 Aug '05

3 min read

Sporting goods retailer Goody's Family Clothing Inc reported total sales for fiscal periods ended July 30, 2005, compared with fiscal periods ended July 31, 2004.

"As previously discussed, they missed some spring and summer fashion trends in all of their women's areas, which affected customer traffic and sales storewide," commented Robert M. Goodfriend, Chairman and Chief Executive Officer. "This weak performance forced us to be more promotional than planned in July 2005 in an effort to stimulate sales and reduce seasonal inventories. Also, inventory levels in certain other areas were planned too low, which had a further negative impact on the business. Finally, a shift in advertising dollars from television to radio in the first half of this year has not been successful. They have taken corrective action in each of these areas.

"They anticipate their sales will improve as they receive fresh new fall merchandise and complete the liquidation of spring-summer products. However, with negative comparable store sales and lower margins for the month, they now expect to report a substantial net loss for the second quarter of 2005 compared with net earnings of $0.04 per diluted share reported in the year- earlier period. Actual results may vary from this revised guidance."

Additionally, the Company announced revisions to its previously released business plan for fiscal 2005. The Company's revised business plan for fiscal 2005 now calls for the following components, versus previous guidance: (i) the gross profit rate, with lower merchandise margins and a higher occupancy expense rate, is now expected to be lower than the previous guidance of a gross profit rate of approximately 30.0 percent, although the Company is not in a position to estimate a rate at this time; and (ii) the selling, general and administrative expense rate, with the lack of sales leverage, is now expected to be modestly higher than last year, before calculating and accruing performance bonuses, which were not accrued in 2004, versus a rate similar to last year. Actual results may vary from the revised business plan.

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