Gross profit, as a percentage of net sales, was 52.4% compared to 53.1% in the prior year quarter, resulting from lower merchandise margins due to higher levels of promotions compared to the prior year quarter.
Selling, general and administrative (SG&A) expenses excluding $0.6 million in charges related to a secondary equity offering increased 31% to $22.8 million or 28.8% of net sales compared to the prior year quarter, excluding $0.5 million in charges related to a secondary equity offering, of $17.4 million or 28.4% of sales. The increase was principally due to operating additional boutiques and infrastructure investments to support the larger boutique base and direct-to-consumer sales growth.
Adjusted income from operations for the quarter increased 23% to $18.6 million or 23.5% of net sales compared to $15.1 million or 24.7% of net sales in the prior year quarter.
BALANCE SHEET SUMMARYTotal cash and cash equivalents at quarter end were $33.8 million compared to $8.2 million at the prior year quarter end, and $29.9 million at the end of fiscal 2012. The Company had no long-term debt at the end of the quarter compared to $12.0M at the end of the prior year quarter. Total inventories, excluding reserves, increased 28% over the prior year quarter and was in-line with net sales growth. SECOND FISCAL QUARTER AND FULL FISCAL YEAR 2013 GUIDANCE For the second quarter ending August 3, 2013, net sales are expected to be between $94.5 million and $95.5 million assuming a 1% to 2% increase in comparable sales including direct-to-consumer on top of the prior year comparable sales increase of 21% and the opening of approximately 21 additional new boutiques. Earnings per diluted share are expected to be in the range of $0.35 to $0.36, an increase of 21% to 24% over the prior year adjusted diluted earnings per share of $0.29, excluding $0.2 million net of tax related to stock option acceleration.
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