Merchandise margins for the first six months of fiscal 2013 were 60.2% compared to 59.6% in the same period last year. Store occupancy costs were $136.6 million, or 18.8% of sales, compared to $133.1 million, or 19.7% of sales, last year. As a percentage of sales, gross profit for the first six months was 41.4% compared to 39.8% in the same period last year.
Year-to-date selling, general and administrative expenses were $228.4 million, or 31.3% of sales, compared to $214.9 million, or 31.9% of sales, in the same period of fiscal 2012.
Operating income for the first six months of fiscal 2013 increased 37% to $59.7 million, or 8.2% of sales, compared to operating income of $43.6 million, or 6.5% of sales, for the same period in fiscal 2012.
Balance Sheet and Share Repurchase Program
As of August 25, 2012, the Company remained in strong financial condition with $115.1 million of cash and cash equivalents. Inventory totaled $420.8 million, up 13.5% versus the end of last year’s second quarter. The planned increase in inventory was primarily due to additional inventory for the Company’s new e-Commerce business and slightly larger purchases of merchandise in select categories, including seasonal goods, to support higher sales. Capital expenditures for the first six months totaled $37.9 million and were primarily used for new store openings, existing store fixtures and improvements, and infrastructure and technology development, including the Company’s new e-Commerce platform and new point-of-sale system.
Under the Pier 1 Imports’ current $100 million share repurchase program, the Company repurchased a total of 1,887,515 shares of its common stock during the second quarter ended August 25, 2012 at a weighted average cost of $16.20 per share for a total cost of approximately $30.6 million. To date, the Company has repurchased 4,752,115 shares under the current $100 million share repurchase program at a weighted average cost of $16.68 and a total cost of $79.3 million with $20.7 million remaining available for repurchases under the plan. As of September 13, 2012, approximately 106.2 million shares of the Company’s common stock were outstanding.