During the quarter, the Company accomplished the following:
- Despite lower than optimal inventory levels throughout the quarter, comparable store sales improved from the year-ago period.
- Gross profit as a percentage of net sales improved by 480 basis points versus the prior year, driven by improved product costs combined with reductions in buying and occupancy costs.
- Selling, general and administrative expenses were up slightly compared to the prior year period as the Company invested in marketing, eCommerce and Outlet initiatives, which were partially offset by continued expense controls along with a benefit from insurance proceeds and a reduction in share-based compensation expense.
- Inventory remained tightly managed with total quarter-end inventory declining by 4.8%, as compared to the end of last year’s second quarter. The retail value of on-hand inventory per average store increased 5.7%.
- The Company ended the quarter with $39.4 million of cash-on-hand and no outstanding borrowings under its revolving credit facility.
- The Company opened six new Outlet stores, remodeled three existing stores and closed 10 stores, ending the quarter with 537 stores, including 41 Outlet stores, and 2.8 million selling square feet in operation.
For the six months ended July 28, 2012, net sales were $455.4 million, as compared to $467.9 million for the six months ended July 30, 2011. Comparable store sales decreased 1.5% for the six months ended July 28, 2012, as compared to a decrease of 0.4% in the prior year period. Operating loss for the six months ended July 28, 2012 was $4.5 million, reflecting a significant improvement from the prior year’s operating loss of $18.7 million. Net loss for the six months ended July 28, 2012 narrowed to $4.5 million, or $0.07 per diluted share. This compares to the prior year net loss of $19.1 million, or $0.32 per diluted share.