- Net sales decreased 7% to $506.1 million from $546.6 million in the third quarter of 2015.
- Comparable sales (including e-commerce sales) decreased 8%, compared to a 6% increase in the third quarter of 2015.
- E-commerce sales increased 15% to $96.3 million.
- Merchandise margin declined by 340 basis points driven by increased promotional activity. Buying and occupancy as a percentage of net sales rose by 160 basis points. In combination, this resulted in a 500 basis point decline in gross margin, representing 30.0% of net sales compared to 35.0% in last year's third quarter.
- Selling, general, and administrative (SG&A) expenses were $136.6 million versus $146.6 million in last year's third quarter. As a percentage of net sales, SG&A expenses increased by 20 basis points to 27.0%.
- Operating income was $15.1 million, or 3.0% of net sales, compared to $44.5 million, or 8.1% of net sales in the third quarter of 2015.
- Income tax expense was $2.8 million, at an effective tax rate of 19.6%, compared to $16.9 million, at an effective tax rate of 39.2% in last year's third quarter. The effective tax rate for the thirteen weeks ended October 29, 2016 includes a net tax benefit of approximately $2.9 million attributable to certain discrete items that occurred during the third quarter.
- Net income was $11.6 million, or $0.15 per diluted share and includes a net $0.04 per diluted share benefit related to the aforementioned income tax items. This compares to net income of $26.3 million, or $0.31 per diluted share, in the third quarter of 2015.
- Real estate activity for the third quarter of 2016 is presented in Schedule 5.
- Cash and cash equivalents totaled $101.9 million versus $91.2 million at the end of the third quarter of 2015. During the thirty-nine weeks ended October 29, 2016, approximately $51.5 million was used to repurchase approximately 3.2 million shares of the Company's outstanding common stock.
- Capital expenditures totaled $80.9 million for the thirty-nine weeks ended October 29, 2016 compared to $85.0 million for the thirty-nine weeks ended October 31, 2015.
- Inventory was $341.9 million compared to $364.7 million at the end of the prior year's third quarter, a 6% decrease.
|Fourth Quarter 2016 Guidance||Fourth Quarter 2015 Actual Results|
|Comparable Sales||Negative low double digits||4%|
|Effective Tax Rate||Approximately 39%||38.5%|
|Interest Expense, Net||$0.7 million||$1.1 million|
|Net Income||$20 to $23 million||$56.1 million|
|Diluted Earnings Per Share (EPS)||$0.26 to $0.30||$0.67|
|Weighted Average Diluted Shares Outstanding||78.8 million||83.3 million|
|Full Year 2016 Guidance||Full Year 2015 Actual Results|
|Comparable Sales||Negative high single digits||6%|
|Effective Tax Rate||Approximately 37%||38.9%|
|Interest Expense, Net||$13.5 million (1)||$15.9 million (2)|
|Net Income||$55 to $58 million (1)||$116.5 million (2)|
|Adjusted Net Income||$62 to $65 million (3)||$122.4 million (3)|
|Diluted EPS||$0.70 to $0.74 (1)||$1.38 (2)|
|Adjusted Diluted EPS||$0.78 to $0.82 (3)||$1.45 (3)|
|Weighted Average Diluted Shares Outstanding||79.1 million||84.6 million|
|Capital Expenditures||$100 to $105 million||$115.3 million|
|(1)||Includes approximately $11.4 million of non-core items related to an amendment to the Times Square Flagship store lease that allows for early termination at the landlord's option.|
|(2)||Includes approximately $9.7 million of non-core items in connection with the redemption of our Senior Notes. These items consist of the redemption premium paid, the write-off of unamortized debt issuance costs, and the write-off of the unamortized debt discount.|
|(3)||Adjusted Net Income and Adjusted Diluted EPS are non-GAAP financial measures. Refer to Schedule 4 for a reconciliation of GAAP to Non-GAAP financial measures.|