Gross Margin improves by 200 basis points at Jo-Ann

28 May '10

5 min read

Store Openings, Closings and Remodels
During the first quarter of fiscal 2011, the company opened two large-format and eight small-format stores and closed six small-format stores. For fiscal 2011, the company expects to open approximately 30 new stores and close approximately 25 stores.

During the first quarter of fiscal 2011, the company remodeled 12 stores of which one was transitioned from a small-format to a large-format layout. For fiscal 2011, the company expects to remodel at least 40 stores during the year.

Fiscal 2011 Outlook
Based upon the company's first quarter results and management's operating assumptions for the remainder of the year, the company is increasing its previously announced expectations for fiscal 2011. The key considerations underlying its outlook for fiscal 2011 include:

• Same-store sales increase of approximately 2.5% to 3.5% for the year;
• Gross margin rate improvement of 40 to 70 basis points for the year versus the previously announced range of approximately 20 to 50 basis points;
• Selling, general and administrative expenses, as a percentage of net sales, improvement of 30 to 60 basis points for the year versus the previously announced range of approximately 20 to 50 basis points;
• Capital expenditures, net of landlord allowances, for the full year of approximately $50 million;
• Earnings per diluted share in the range of $2.95 to $3.10 for the year versus the previously announced range of $2.75 to $2.90;
• Free cash flow in the range of $80 to $85 million for the year (free cash flow defined as net income plus depreciation and amortization, stock-based compensation expense and changes in working capital, less capital expenditures, net of landlord allowances);
• Weighted-average diluted share count of approximately 27.4 million shares for the year.

Jo-Ann Stores, Inc., is a leading national fabric and craft retailer with locations in 48 states, including 231 large-format stores and 519 small-format stores.

Jo-Ann Stores Inc

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