For the quarter ended Feb 1, the off-price retailer posted net income of $7.42 million, or 16 cents a share, down from $13.55 million, or 30 cents a share, in the year-ago period.
10 New Stores Planned
The results include a charge of $3.10 million after-tax, or 7 cents a, share related to a decrease in inventories. Excluding items, adjusted net income was $13.12 million, or 29 cents a share. That was in line with analysts’ average estimate for 26 cents a share (Analysts’ estimates typically exclude special items).
Net sales were down 2% to $360.79 million from $368.56 million in the same period last year, (which included an extra week). Analysts’ consensus revenue estimate was for $364.49 million. Comparable store sales rose 3.1%.
Gross margin was 30.9% of sales, but excluding the $10 million impact of the accounting estimate change, gross margin was 28.1%, compared to 28.8% in fourth quarter last year.
“The decrease in the adjusted gross profit rate was primarily the result of higher markdowns, offset by higher markup,” the company said, adding that its markdown levels were slightly higher this year.
“We improved our business in 2013 through a number of key initiatives, including enhancing our merchandise and brands, launching our online store, more effective marketing, taking our supply chain distribution centers in-house and growing our credit card program,” said Jay Stein, chief executive. “For 2014, we will continue to build upon these achievements, while initiating our most aggressive store opening plan in more than ten years with 10 new and 6 relocated stores, to even better serve our customers and grow returns for our investors.”