The loss from discontinued operations in fiscal 2013 resulted from adjustments required to true up the tax benefits realized from the loss on the sale of the Company’s wholly-owned industrial thread manufacturing company American & Efird (“A&E”). The loss from discontinued operations in the third quarter of fiscal 2012 included an income tax expense adjustment of $3.5 million for establishing a reserve against future utilization of tax benefits as a result of the A&E purchase price allocation which re-categorized more of the loss on sale as a capital loss. The pre-tax loss from discontinued operations for the first nine months of fiscal 2012 amounted to $19.0 million and were primarily driven by non-cash charges for the settlement of pension liabilities and other employee benefits in connection with the sale of A&E.
Thomas W. Dickson, Chairman of the Board and Chief Executive Officer stated, “We are pleased with our results for the third quarter. Our comparable store sales increase, which was negatively impacted by the shift of both the Easter and Fourth of July Holidays, remained positive despite the fact that we still do not see any meaningful inflation for the current year. In addition, after adjusting for the shift in the holidays, we continue to realize an increase in the number of items sold year-over-year. We believe that our pricing and promotional strategies are effective in driving unit sales while increasing the quarterly gross margin by 32 basis points over the prior year. We remain committed to our customers to deliver outstanding values and excellent customer service.”
The Company’s operating performance and strong financial position provides the flexibility to continue with our store development program for new and replacement stores along with the remodeling and expansion of existing stores. Capital expenditures for fiscal 2013 are planned to total approximately $200 million. During the fourth quarter of fiscal 2013, the Company plans to open four new stores and complete major remodels on two stores (both of which will be expanded in size). The fiscal 2013 store development program is expected to result in a 4.2% increase in retail square footage, as compared to a 4.1% increase in fiscal 2012. The Company currently anticipates re-opening the temporarily closed store in the Washington D.C. area during the first quarter of fiscal 2014. Capital expenditures for fiscal 2014 are currently estimated to be approximately $205 million. The Company routinely evaluates its existing store operations in regards to its overall business strategy and from time to time will close or divest underperforming stores.