Gordmans Stores Inc.
) posted earnings per share of 41 cents in the fourth quarter of
fiscal 2012, ahead of the Zacks Consensus Estimate of 36 cents.
However, quarterly result lagged the year-ago quarter's earnings
of 53 cents per share. Decline in comparable store sales combined
with higher expenses led to the fall in net income.
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Behind the Headline Numbers
Net sales for Gordmans Stores grew 9.4% year over year in the
fourth quarter to $202.5 million, buoyed by nine new stores that
led to a 12% expansion in its store base. Revenues missed the
Zacks Consensus Estimate of $207.0 million.
Quarterly comparable store sales (comps) declined 4.1% year over
year in contrast to a 2.1% increase in comps in the prior-year
quarter. Seasonality as well as the lack of variety in
merchandise offerings in several categories hurt comps in the
During the quarter, Gordmans Stores' gross margin dipped 140
basis points (bps) to 38.7%. To manage inventory, the company
banked on various sales-driven initiatives that in turn hurt
In fiscal 2012, earnings per share were $1.21 versus $1.30 in
fiscal 2011 due to increased costs. Net sales for Gordmans Stores
grew 10.2% to $607.7 million.
For 2013, the company plans to open 10 new stores in 4 new and 2
Gordmans Stores houses a large number of brands. The company is
in an expansion mode in new as well as existing markets. However,
the company slashed its 2012 guidance several times last year.
Sluggish comps growth and successive declines in revenue guidance
indicating a poor business environment remain causes of concern.
The beginning of the year was also tepid for the company, which
makes us cautious at the current level and we prefer to take a
wait and see approach.
Gordmans Stores currently carries a Zacks Rank #5 (Strong Sell).
Some other retail industry stocks currently performing well
include Sears Holdings Corp (
) and Costco Wholesale Corp. (
) both with a Zacks Rank #2 (Buy). Investors can also
consider Red Robin Gourmet Burgers Inc. (
), which currently holds a Zacks Rank #1 (Strong Buy)