In total, operating expenses for the third quarter of fiscal 2011 were $22.8 million, or 46.9% of net sales, as compared to $24.0 million, or 52.7% of net sales, in the third quarter of fiscal 2010. For the first nine months of fiscal 2011, total operating expenses were $69.3 million, or 43.1% of net sales, compared to $70.8 million, or 47.0% of net sales, in the first nine months of fiscal 2010. The decline in total operating expenses for the third quarter and first nine months of fiscal 2011 primarily reflected reduced professional and legal fees.

At October 1, 2011, cash and marketable securities totaled $24.4 million compared to $26.8 million in cash and marketable securities at October 2, 2010. Total inventory at cost increased 15.5% at October 1, 2011, as compared to a decrease of 5.8% at October 2, 2010. The Company noted that inventory receipts in the month of September were significantly higher than last year to support sales growth and included receipts of inventory related to the August 2011 opening of the Company’s dedicated web fulfillment center. Prior to August 2011, all of the Company’s e-commerce sales were fulfilled from its stores. The Company remains comfortable with the content and level of its inventories.

A table summarizing financial results follows:
           

Thirty-Nine Weeks Ended

Thirteen Weeks Ended
Oct. 1,

Oct. 2,

Oct. 1,
Oct. 2,

2011

2010

2011

2010
($ thousands, except for per share data, share numbers and store count)
 
Net sales $ 161,024

$

150,649

$

48,659

$

45,524
Operating loss (143 )

(13,264

)

(3,042

)
(8,090 )
Net income (loss)

$

205

$

(8,211

)

$

(1,822

)
$ (5,027 )
 
Basic earnings (loss) per share

$

0.02

$

(0.64

)

$

(0.14

)

$

(0.39

)
Diluted earnings (loss) per share

$

0.02

$

(0.64

)

$

(0.14

)

$

(0.39

)
 
Diluted weighted average shares
outstanding 12,831,000

12,774,000

12,849,000
12,780,000
 
Diluted weighted average shares
outstanding 12,859,000

12,774,000

12,849,000
12,780,000
 
Number of stores open, at end of period 279

281

279

281
 

Store Opening Plans

During the third quarter, the Company closed one location, ending the period with 279 stores in operation. For fiscal 2011, the Company expects to open no new additional stores and close one additional location, ending the year with 278 locations and approximately 565,000 square feet in operation.

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