Gottschalks Widens Loss
By Don Hogsett -- Home Textiles Today, 12/5/2005
Fresno, Calif. — Hampered by weakening same-store sales and softness in its home business, Gottschalks Inc. reported a modestly widened third quarter loss of $1.6 million, compared with a year-before deficit of $1.5 million.
Overall sales improved 2.3 percent, to $150.5 million from $147 million. But the bellwether gauge of same-store sales dipped 0.5 percent.
Jim Famalette, president and CEO, commented, “While we were pleased with our progress on key operating objectives, we experienced mixed results for the quarter. First, our comparable-store sales for the quarter were not as strong as we had expected, primarily due to soft sales in our home division. In addition, we experienced increased distribution costs related to higher fuel prices as well as expenses associated with a new store opening and the closing of another store.”
Going forward, the company grew more cautious and lowered its earnings target for the all-important fourth quarter. “Based on our third quarter results, recent retail trends, higher than anticipated professional fees and a warmer-than-usual November, we are taking a more conservative view regarding the remainder of the year,” said Famalette. He said same-store sales for the Christmas quarter are now forecast to be flat to up about 1 percent. Earnings per share are now forecast at 50 to 52 cents.
| Qtr. 10/29 (x000) | 2005 | 2004 | % change |
| Sales | $150,468a | $147,049a | 2.3 |
| Oper. income (EBIT) | (385) | (389) | – |
| Net income | (1,626)b | (1,527)b | – |
| Per share (diluted) | (0.12) | (0.12) | – |
| Average gross margin | 36.0% | 35.4% | – |
| SG&A expenses | 34.5% | 34.4% | – |
| 12 months | |||
| Sales | 444,570a | 437,640a | 1.6 |
| Oper. income (EBIT) | 319 | 685 | -53.4 |
| Net income | (3,352)b | (3,541)b | – |
| Per share (diluted) | (0.25) | (0.27) | – |
| Average gross margin | 35.2% | 35.1% | – |
| SG&A expenses | 33.7% | 33.7% | – |
| (loss) a. Third quarter net sales, excluding $735,000 in credit revenues and $623,000 in leased department revenues. Total sales were $151.8 million, compared with $148.4 million last year. For the nine months, total sales were $444.6 million, compared with $437.6 million last year, excluding $2.2 million in credit revenues and $2 million in leased department revenues. b. Third quarter results include miscellaneous income of $473,000, compared with $379,000 last year; an income-tax benefit of $895,000 versus $836,000 last year; and a $118,000 loss from discontinued operations. Nine month results include $1.3 million in miscellaneous income, compared with $1.3 million last year; an income tax benefit of $1.8 million versus $2 million last year; and a $259,000 loss from discontinued operations, compared with $253,000 last year. |
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