Buoyed by 3Q results, Gordmans raises 4Q projections
Clint Engel -- Furniture Today, December 2, 2010
Omaha, Neb. - Less than four months after its initial public offering, Midwest regional chain Gordmans generated above-planned operating results, driven by better-than-expected comp store sales, in its third quarter.
During the company's third quarter earnings call Thursday evening, president and ceo Jeff Gordman attributed the quarter's strength in part to "recent progress" on several key initiatives the 68-unit home décor and apparel retailer has recently adopted, such as an enhanced merchandise selection, refined inventory optimization strategies, and expanded geographic footprint.
With regards to the home department's performance in the quarter, he singled out kitchen trends, wall accents, decorative lighting and decorative pillows as "some of the key drivers of our home décor business."
He added that "several trends have been driving the business," with contemporary and transitional themes "important across all home décor categories." Also, color and embellishment "are important across all of our major businesses."
For the third quarter, ended Oct. 30, net loss decreased to $2.5 million or 13 cents per share compared to $3.9 million or 24 cents per share, in the prior year. Excluding the one-time, pre-tax charges of $10.6 million related to the initial public offering, the non-GAAP adjusted net income grew by 10.7% to $4.3 million, or 22 cents per share.
Sales rose 11.0% to $123.6 million, with comps up 6.0%.
Year to date, net income fell 27% to $7.2 million or 42 cents per share from $9.7 million or 61 cents per share. Excluding pre-tax charges of $11.8 related to the IPO, non-GAAP adjusted net income for the first nine months increased 51.8% to $14.7 million.
Sales for the thirty-nine week period increased 14.9% to $348.6 million from $303.5 million, and comparable store sales increased by 9.7%.
"We are optimistic about our prospects for the holiday selling season as well as our ability to scale the business over the long term," he added. "We have revised our guidance for the fourth quarter due to our strong performance in November."
Even though it finds itself "up against "a very strong" 15% comparable store sales performance for December 2009, Gordmans now expects for the fourth quarter ending January 29, 2011 sales to be between $160 million and $165 million, with a mid-single digit comparable store sales increase. Previously, the company projected sales between $155 million and $160 million, with a comp increase in the low single digits.
Also, Gordmans now projects net income in the range of $7.2 million to $8.1 million for the fourth quarter, which translates into earnings per share in the range of 37 to 42 cents, up from its previous expectation for net income in the range of $5.9 million to $6.8 million and earnings per share in the range of 30 to 35 cents.
Furniture Today's Ray Allegrezza Speaks with Stephen Bogart about Fine Furniture's New Bogart Line