Gottschalks puts quarter in bank

By Staff -- Home Textiles Today, 8/30/2004 12:00:00 AM

FRESNO, CALIF. —

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.