SOURCE: Gordmans Stores, Inc.

May 23, 2013 08:00 ET

Gordmans Stores, Inc. Announces First Quarter 2013 Results

First Quarter Diluted EPS of $0.17

OMAHA, NE--(Marketwired - May 23, 2013) -  Gordmans Stores, Inc. (NASDAQ: GMAN), an Omaha-based apparel and home décor retailer, today announced results for its first quarter (thirteen weeks) ended May 4, 2013.

First Quarter Highlights

  • Three new stores were opened in existing markets in the first quarter as part of our expansion strategy.
  • Diluted earnings per share were $0.17, which exceeded guidance of $0.11 - $0.13.

"The combination of the 10.5% comparable store sales decline we experienced in the first quarter and a lower gross profit margin resulting from additional markdowns to reduce inventory levels negatively impacted our first quarter operating results," commented Jeff Gordman, President and Chief Executive Officer. "However, our second quarter is off to a solid start and we believe that the growth initiatives that we have put in place will produce improved comparable store sales as the year progresses. We are looking forward to opening four stores in advance of the back-to-school selling season in Albuquerque, Minot, ND, Milwaukee and Louisville, KY, all new markets for our Company."

First Quarter Financial Results
Net sales for the thirteen weeks ended May 4, 2013 decreased 1.9% to $131.4 million from $133.9 million for the thirteen weeks ended April 28, 2012. Comparable store sales for the first quarter of fiscal 2013 decreased by 10.5% versus a 4.7% comparable store sales increase in the first quarter of fiscal 2012. Gross profit, which includes license fees, decreased by 7.1% to $59.0 million, or 44.9% of net sales, from $63.5 million, or 47.4% of net sales, in the first quarter of fiscal 2012. Selling, general and administrative costs were $53.7 million, or 40.8% of net sales, compared to $50.5 million, or 37.7% of net sales, in the first quarter of fiscal 2012. Net income for the first quarter of fiscal 2013 was $3.2 million, or $0.17 per diluted share, compared to net income of $8.1 million, or $0.41 per diluted share, in the first quarter of fiscal 2012.

Outlook
For the second quarter of fiscal year 2013 ending August 3, 2013, the Company currently expects net sales to be between $135 and $137 million, which reflect a low single digit comparable store sales decrease. The Company also expects continued pressure on gross profit margins related to inventory recalibration efforts as well as additional selling, general and administrative expenses related to advertising related to our loyalty program, consulting related to store productivity improvements, depreciation and pre-opening compared to the prior year, and therefore projects diluted earnings per share in the range of $0.01 to $0.03 (using a weighted average diluted share count of approximately 19.4 million). 

Conference Call Information
A conference call to discuss first quarter financial results is scheduled for today, May 23, 2013 at 11:00 a.m. Eastern Time. The conference call will be webcast live at http://investor.gordmans.com/events.cfm. A replay of this call will be available within two hours of the conclusion of the call and will remain on the website for one year.

About Gordmans Stores, Inc.
Gordmans (NASDAQ: GMAN) features a large selection of the latest name brands, fashions and styles at up to 60 percent off department and specialty store prices every day. The wide range of merchandise includes apparel for all ages, accessories, footwear, home décor, gifts, designer fragrances, fashion jewelry, bedding and bath, accent furniture and toys. Founded in 1915, Gordmans operates 86 stores in 18 states. For more information about Gordmans, visit www.gordmans.com

Safe Harbor Statement
Certain statements in this release are "forward-looking statements" made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "guidance," "expects," "intends," "projects," "plans," "believes," "estimates," "targets," "anticipates," and similar expressions are used to identify these forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding expected net sales, net income, comparable store sales, diluted earnings per share, and store expansion, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on our current expectations and assumptions, which may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are (1) changes in consumer spending and general economic conditions; (2) our ability to identify and respond to new and changing fashion trends, guest preferences and other related factors; (3) fluctuations in our sales and profitability on a seasonal basis; (4) intense competition from other retailers; (5) our ability to maintain or improve levels of comparable store sales; and (6) our successful implementation of advertising, marketing and promotional strategies.

Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including other risks, relevant factors and uncertainties identified in the "Risk Factors" section of the Company's Annual Report on Form 10-K for the fiscal year ended February 2, 2013, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

GORDMANS STORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
         
    May 4, 2013   February 2, 2013
ASSETS   (Unaudited)   (Unaudited)
CURRENT ASSETS:            
  Cash and cash equivalents   $ 49,395   $ 40,824
  Accounts receivable     1,904     2,049
  Landlord receivable     4,837     8,787
  Income taxes receivable     --     1,300
  Merchandise inventories     89,418     78,006
  Deferred income taxes     2,707     2,617
  Prepaid expenses and other current assets     8,158     6,552
    Total current assets     156,419     140,135
PROPERTY AND EQUIPMENT, net     53,835     45,966
INTANGIBLE ASSETS, net     1,970     1,992
OTHER ASSETS, net     3,168     3,033
             
TOTAL ASSETS   $ 215,392   $ 191,126
             
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
CURRENT LIABILITIES:            
  Accounts payable   $ 49,389   $ 34,211
  Income taxes payable     484     --
  Accrued expenses     26,498     22,789
  Current portion of capital lease obligations     76     189
             
    Total current liabilities     76,447     57,189
             
NONCURRENT LIABILITIES:            
  Deferred rent     23,126     21,997
  Deferred income taxes     9,413     9,236
  Other liabilities     300     316
             
    Total noncurrent liabilities     32,839     31,549
             
COMMITMENTS AND CONTINGENCIES            
             
STOCKHOLDERS' EQUITY:            
  Preferred stock     --     --
  Common stock     19     19
  Additional paid-in capital     52,931     52,461
  Retained earnings     53,156     49,908
             
    Total stockholders' equity     106,106     102,388
             
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 215,392   $ 191,126
             
             
GORDMANS STORES, INC. AND SUBSIDIARIES  
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS  
(Dollars in Thousands Except Share Data)  
             
    13 Weeks Ended
May 4, 2013
(Unaudited)
    13 Weeks Ended
 April 28, 2012
(Unaudited)
 
Net sales   $ 131,434     $ 133,922  
License fees from leased departments     1,921       1,937  
Cost of sales     (74,364 )     (72,368 )
  Gross profit     58,991       63,491  
Selling, general and administrative expenses     (53,673 )     (50,486 )
  Income from operations     5,318       13,005  
Interest expense, net     (121 )     (125 )
  Income before taxes     5,197       12,880  
Income tax expense     (1,949 )     (4,830 )
                 
  Net income   $ 3,248     $ 8,050  
                 
Basic earnings per share   $ 0.17     $ 0.42  
Diluted earnings per share   $ 0.17     $ 0.41  
                 
Basic weighted average shares outstanding     19,242,790       19,095,223  
Diluted weighted average shares outstanding     19,424,882       19,424,699  
                 

Contact Information

  • Company Contact:
    Mike James
    Chief Financial Officer
    (402) 691-4126

    Investor Relations:
    ICR, Inc.
    Brendon Frey
    (203) 682-8200