Selling, general and administrative ("SG&A") expenses increased $1.7 million, or 6.9%, primarily due to increases of $0.7 million in advertising and $0.6 million in labor-related expenses, such as salaries, payroll taxes and employee health insurance coverage. The increase in advertising served to focus customer attention on our technical merchandise and innovative brand offerings while being less promotional. As a percent of sales, SG&A increased to 26.7% from 25.1%. Depreciation decreased $0.4 million as a result of the low level of capital expenditures in recent fiscal years with no new store openings or significant remodels.

Net loss for the quarter ended December 30, 2012 increased $0.8 million to $1.9 million, or $0.13 per diluted share, from a net loss of $1.0 million, or $0.07 per diluted share, for the quarter ended January 1, 2012. 

Craig Levra, Chairman and CEO, stated, "While this was a tough holiday season for many retailers, our third quarter results were well below our expectations. Following a strong summer and fall, positive sales trends deteriorated significantly in November and for the first two weeks of December. Unseasonably warm and dry weather coming on top of a bad winter sports season last year, combined with our customers' general economic uncertainty and our desire to be less promotional all contributed to the decrease in comparable store sales. We have exited the holiday season with our inventory well positioned, having maintained our strong pricing discipline and brand integrity.  Additionally, we are encouraged by the improvement in sales trends since mid-December and its continuation into our fourth quarter as comparable store sales increased 20.3% through the five weeks ended February 3, 2013."

Mr. Levra continued by noting, "We believe that the January sales numbers reflect both the return to more 'normal' winter weather conditions and the continued response of our customers to our strategy of being first to market with performance, technology and lifestyle merchandise as evidenced by our growth in average ticket size. In addition to our differentiated product offerings, our Team Sales Division and online sales also are essential channels for growth and expansion of our footprint and customer base. Therefore, we continue to heavily invest in these areas where we believe we can distinguish ourselves from our competition and provide the greatest financial return. To that end, a prioritization of talent and resources is underway to continue growing businesses that deliver an overall seamless customer experience while more closely linking online, Team Sales Division and our retail stores. Recent examples include our launch of same day delivery currently being tested in three select markets and online drop ship to customers with vendor inventory to expand our product offering both online and in stores."

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