Robert M. Lynch, President and Chief Executive Officer, commented, “We are pleased that our team delivered record results through the important spring remodeling season and continued to execute on our key strategic initiatives. We drove consistently strong customer demand during the quarter as greater recognition of our value proposition was achieved through our efforts to expand our advertising reach and frequency. Through our team’s coordinated efforts and commitment to continuous improvement in everything we do, we captured market share and expanded operating margin in the second quarter.”
First Six Months Results
Net sales increased 18.9% to $398.4 million in the first six months of 2012 from $335.1 million in the first six months of 2011. Comparable store net sales increased 10.1% for the first half of 2012, compared to a decrease of 6.2% for the first half of the prior year. Non-comparable store net sales increased $29.7 million over the prior year. The Company opened 14 new stores during the first six months of 2012 and as of June 30, 2012, operated 277 stores in 46 states and Canada.
Gross margin increased to 37.3% for the first six months of 2012 from 35.1% in the same period of 2011. SG&A expenses improved to 29.0% of net sales for the first half of 2012, compared to 29.7% of net sales for the first half of 2011. Operating margin increased to 8.3% in the first six months of 2012, from 5.4% in the first six months of 2011.Net income increased 84.2% to $20.4 million, or $0.72 per diluted share, in the first half of 2012 compared to $11.1 million, or $0.39 per diluted share, in the first half of the prior year. Company Outlook Based on year-to-date results and current trends, the Company now expects to achieve the following in 2012:
- Net sales for the full year in the range of $750 million to $775 million, up from the previous range of $720 million to $750 million.
- An increase in comparable store net sales in the mid-single digits.
- The opening of a total of 20 to 25 new store locations, including two to four in Canada.
- Full year earnings per diluted share in the range of $1.30 to $1.42, based on a diluted share count of approximately 28.0 million shares, which is exclusive of any future impact of the share repurchase program. The Company previously expected a range of $1.10 to $1.25 based on a diluted share count of 28.7 million shares.