Gottschalks puts quarter in bank

Putting behind it store-closing costs that dogged the bottom line a year ago, Gottschalks Inc. recorded a second quarter profit of $350,000, up from $25,000 the prior year.

The second quarter has historically run at a loss, and Jim Famalette, president and CEO, said despite a dip in sales, "our bottom line net results were the best for a second quarter in more than 15 years."

Sales in the period slipped 1.3 percent, to $147.8 million from $149.8 million last year. Same-store sales declined 1.3 percent.

Average gross margin thinned 30 basis points, or three-tenths of a percentage point, to 35.4 percent from 35.7 percent a year ago. "Our gross margin was somewhat impacted by lower sales, as we continued to implement a markdown strategy focused on maintaining strong inventory controls."

"However, as part of our effort to improve our merchandise flow, through better planning and allocation, we ended the quarter with nearly 3 percent less inventory on a comparable basis and continued to improve our inventory turn," he added.

Operating costs climbed 60 basis points, or six-tenths of a percentage point, to 32.8 percent of sales from 32.2 percent the preceding year.

Gottschalks Inc.

Qtr. 7/31 (x000) 2004 2003 % chg
Sales $147,776 $149,757 -1.3
Oper. Income (EBIT) 5,237 6,522 -19.7
Net income 350a 25a
Per share (diluted) 0.03 0.00
Average gross margin 35.4% 35.7%
SG&A expenses 32.8% 32.2%
Six months 2004 2003 % chg
Sales 292,309 287,672 1.6
Oper. Income (EBIT) 7,301 7,196 1.5
Net income (1,759)b (3,961)b
Per share (diluted) (0.14) (0.31)
Average gross margin 34.9% 34.8%
SG&A expenses 33.4% 3.5% ---
(loss)
a-Second quarter results include miscellaneous income of $465,000 versus $683,000 last year. The prior-year second quarter includes a $307,000 loss from discontinued operations.
b-Six-month results include $927,000 in miscellaneous income versus $1.1 million a year ago; an income-tax benefit of $1.1 million versus $1.9 million a year ago; a $1.7 million loss from continuing operations versus $1.9 million last year; and a $20,000 loss from discontinued operations versus a $731,000 prior-year loss.


Home Textiles Today Staff | News & Commentary

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