First Nine Months Results
Net sales increased 18.8% to $602.7 million in the first nine months of 2012 from $507.1 million in the first nine months of 2011. Comparable store net sales increased 10.7% for the first nine months of 2012, compared to a decrease of 3.3% for the first nine months of the prior year. Non-comparable store net sales increased $41.4 million over the prior year. The Company opened 21 new stores during the first nine months of 2012 and as of September 30, 2012, operated 284 stores in 46 states and Canada.
Gross margin increased to 37.6% for the first nine months of 2012 from 35.3% in the same period of 2011. SG&A expenses decreased as a percentage of net sales to 28.7% for the first nine months of 2012, compared to 29.5% for the first nine months of 2011. Operating margin increased to 8.9% in the first nine months of 2012, from 5.7% in the first nine months of 2011.
Net income increased 86.9% to $33.3 million, or $1.18 per diluted share, in the first nine months of 2012 compared to $17.8 million, or $0.63 per diluted share, in the first nine months of the prior year.
During the nine months ended September 30, 2012, pursuant to its previously announced stock repurchase program, the Company repurchased approximately 1.5 million shares of its common stock for $40.1 million, including approximately 175,000 shares in the third quarter of 2012. At September 30, 2012, approximately $9.9 million remained available under the Company’s $50 million stock repurchase program.
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 $791 million to $799 million, up from the previous range of $750 million to $775 million.
- Comparable store net sales for the full year increasing in the mid to high single digits.
- The opening of a total of 23 to 25 new store locations.
- Full year earnings per diluted share in the range of $1.53 to $1.59, 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 $1.30 to $1.42, based on a diluted share count of 28.0 million shares.
Mr. Lynch concluded, “Our team remains unified in its vision and motivated to continue taking market share through our powerful value proposition and uniquely profitable store model. Even with record results through the third quarter, we are more excited than ever by the long-term opportunities that lie ahead. While our economy is facing a number of uncertainties in the coming months, our focus remains on continuous improvement in everything we do so that we can deliver value to our customers and shareholders.”