The Company is providing the following outlook for the fourth quarter reflecting its expectations for the balance of the quarter.
Comparable store sales for the fourth quarter of fiscal year 2012 are expected to be flat to up slightly versus the year-ago period.
Net sales are also expected to increase versus the prior year in part due to the inclusion of the 53 rd week in the fiscal year calendar partially offset by a decrease in store count as the Company expects to have between 516 and 520 stores in operation at the end of the fourth quarter as compared to 532 at the end of the prior year fourth quarter. As previously disclosed, the Company’s fiscal year is based upon a retail calendar and fiscal year 2012 is a 53-week year with an extra week of sales and expenses occurring late in the fourth quarter.Gross margin is expected to increase between 450 and 600 basis points from the prior year fourth quarter rate driven by the combination of significant improvements in merchandise margin resulting from improved product costs and lower markdowns and, to a lesser extent, improved leverage of buying and occupancy expenses. Selling, general, and administrative expenses as a percentage of net sales in the fourth quarter of fiscal year 2012 is expected to be flat to up slightly reflecting increases in variable-based compensation, investments in marketing, eCommerce and Outlet initiatives, and an additional week of expenses due to the 53 rd week in fiscal year 2012, partially offset by improved leverage due to increasing sales. Operating income in the fourth quarter of fiscal year 2012 is projected to be in the range of $2 million to $6 million, which marks a significant improvement from the operating loss of $10.8 million in the year-ago period.