Gordmans Stores (GMAN), an Omaha-based apparel and home decor retailer, swung to a net loss for the quarter ended Aug. 2, 2014. The company made a net loss of $3.19 million or $0.16 a share in the second-quarter against a profit of $0.93 million or $0.05 a share in the previous year period. Analysts on average had predicted net loss of $0.15 a share.
Revenue during the second-quarter climbed 3.12 percent to $141.04 million from $136.77 million in the last year period.
Gross margin contracted by 95 basis points over the last year period to 42.35 percent. Operating margin for the current period stood at negative 2.67 percent as compared to positive 1.18 percent for the previous year period.
The company reported operating loss of $3.76 million, compared with $1.62 million in the previous year period.
"While we are disappointed with our second quarter sales performance, our earnings per share met the low end of our guidance," said Andy Hall, president and chief executive officer.
"As we projected at the beginning of the quarter, our second quarter gross profit was negatively impacted by additional markdowns taken to clear aged merchandise. In addition, we reduced our average store inventory by 11% at the end of the second quarter compared to the second quarter last year. Our quarter end inventory level and content positions us to improve our sales and gross margin performance trends in the second half of fiscal 2014."
For third quarter, the company expects net sales to be in the range of $150 to $153 million, which reflect a mid-single digit comparable store sales decrease.
The company expects an improvement in gross profit margin of approximately 40-50 bps compared to the third quarter of fiscal 2013.
It projects a diluted loss per share in the range of $(0.11) to $(0.07), which includes a $0.03 impact of interest expense vs. $0.02 last year.
Cash Position
As on Aug. 02, 2014, the company's cash balance stood at $11.05 million, down 74.65 percent or $32.54 million from Aug. 03, 2013.
Working Capital
Gordmans Stores has witnessed a decline in the working capital over the last one year. The company's working capital stood at $30.40 million as at Aug. 02, 2014, down $46.24 million or 60.33 percent from $76.64 million on Aug. 03, 2013. It registered a decrease in current ratio to 1.30 as at Aug. 02, 2014 from 1.84 on Aug. 03, 2013.
Debt Position
As on Aug. 02, 2014, total debt stood at $50.34 million. The company's total debt was 22.23 percent of total assets as on Aug. 02, 2014.
Shares of the company gained $0.27 or 7.32 percent to close at $3.96 on Thursday.
