Gordmans Q2 Net Falls Sharply on Rising Costs
OMAHA, Neb.-Increased expenses offset a gain in sales to reduce Gordmans' second-quarter net income by 73.7 percent, to $934,000.
The cost picture for the quarter, which ended on Aug. 3, included a drop in gross margin of 247 basis points, to 43.3 percent, as the retailer continued to experience the pressure on margins it felt in the first quarter. Selling, general and administrative expenses rose 8.9 percent in dollars and 88 basis points as a percentage of sales, to 42.1 percent.
Net sales increased 6.7 percent to $136.8 million, but same-store sales were down 2.6 percent. Speaking of the comparable-store decline, Jeff Gordman, Gordmans' president and CEO, said it was what the company expected and represented "a meaningful improvement from the trend we experienced in the first quarter of 2013."
Gordman added that the bottom-line result was ahead of Gordmans' guidance, given that the company had to ramp up markdowns to clear seasonal product and better align its inventory for the second half of the year. "We believe that the adjustments we've made, and continue to make, to our merchandise assortment, combined with the rollout of our loyalty program, have positioned us to deliver further improvements over the remainder of fiscal 2013," Gordman said.
The retailer said it expects third-quarter sales to total between $149 million and $151 million, reflecting an improvement in same-store sales in the low single digits.