Comparable sales declined 3.6 per cent following a 2.6 per cent decrease in the same period last year. E-commerce comparable sales increased 10.7 per cent following a 7.8 per cent jump in the same period last year.
Gross margin rate was 30.8 per cent, as compared to 31.8 per cent in last year's first quarter. The decrease was largely due to increased fulfillment costs related to the higher penetration of e-commerce sales and in connection with our ship from stores initiative, as well as deleverage of occupancy costs. This was partially offset by a 75 basis point increase in merchandise margin.
“While our first quarter results did not reflect the level of improvement we had planned for, we continue to make progress on our strategic initiatives. We made strides in creating a more curated, relevant and inspiring assortment and in enhancing our customers' shopping experience. We also heightened our focus on marketing programs designed to drive loyalty and grow our customer base. In addition, we continued to advance our e-commerce capabilities driving double digit growth in this channel and launched Buy Online Pick Up In Store. In the last eight weeks of the quarter, as the weather improved, comparable sales increased 2 per cent. This demonstrates that when she is ready to shop, and we provide the right product and a superior customer experience, enhanced by our new style and selling programme," Keri Jones, president and chief executive officer, said.
"Looking ahead, we will remain focused on advancing our strategic initiatives which include enhancing her shopping experience, improving our marketing and promotional effectiveness, and expanding our omni-channel capabilities. At the same time, we will continue to focus on cost savings as we look to identify additional efficiencies in our business as well as work with our third-party real estate consultant to reduce our occupancy costs. Combined, we believe these efforts will enable us to deliver improved and sustainable financial results over the long term," explained Jones.
In the reported quarter, selling, general & administrative expenses declined by 1.9 per cent to $29.2 million. The decrease was primarily due to lower medical and marketing expenses, partially offset by higher severance and insurance expenses. As a percent of net sales, SG&A increased approximately 50 basis points to 35.1 per cent due to deleverage.
"Based on our first quarter performance and the volatility in the retail environment, we are revising our Fiscal 2019 guidance. Generating cash remains a priority as we continue to execute our strategy with a disciplined approach to both our inventory management and expenses. Based on our guidance we continue to have adequate financing capacity to move forward with our strategic initiatives," Jones continued. (RR)
Fibre2Fashion News Desk – India
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