The Company continues to execute its six keys to success to drive toward improved fiscal year 2012 results. These include: Maximizing sales and profitability particularly during peak traffic times of the year; increasing its marketing efforts to grow traffic in stores and on-line; maintaining dominance in wear-to-work, while redefining its casual assortment; improving average unit cost; optimizing its real estate portfolio; and expanding its growing eCommerce and Outlet businesses.
During the quarter, the Company accomplished the following:
- Comparable store sales increased 0.7% during the quarter.
- Gross profit as a percentage of net sales improved by 310 basis points versus the prior year period, driven by improved product costs combined with reductions in buying and occupancy costs.
- Selling, general and administrative expenses as a percentage of net sales were up 200 basis points compared to the prior year period due to an increase in variable-based compensation and investments in marketing, eCommerce and Outlet initiatives.
- Inventory remained tightly managed with total quarter-end inventory declining by 3.7%, as compared to the end of last year’s third quarter, while the retail value of in-store inventory per average store increased 2.3%.
- The Company ended the quarter with $23.5 million of cash-on-hand and no outstanding borrowings under its revolving credit facility.
- The Company opened two new Outlet stores, remodeled five existing stores and closed three stores, ending the quarter with 536 stores, including 43 Outlet stores, and 2.8 million selling square feet in operation.
For the nine months ended October 27, 2012, net sales were $674.7 million, as compared to $684.6 million for the nine months ended October 29, 2011. Comparable store sales decreased 0.8% for the nine months ended October 27, 2012, as compared to a decrease of 2.0% in the prior year period. Operating loss for the nine months ended October 27, 2012 was $8.3 million, reflecting a significant improvement from the prior year’s operating loss of $24.8 million. Net loss for the nine months ended October 27, 2012 was $8.4 million, or $0.14 per diluted share. This compares to the prior year net loss of $28.0 million, or $0.46 per diluted share.