Gordmans Stores Inc.
), which houses a large pool of the latest fashion brands,
recently trimmed its revenue guidance for the fourth quarter and
fiscal 2012 ending Feb 2, 2013. Poor comparable sales till Jan 12
compelled the retailer to take the decision.
BIG LOTS INC (BIG): Free Stock Analysis
GORDMANS STORES (GMAN): Free Stock Analysis
ROSS STORES (ROST): Free Stock Analysis
TJX COS INC NEW (TJX): Free Stock Analysis
To read this article on Zacks.com click here.
Comps till Jan 12, 2013 declined 4.6%. Hence, the company now
anticipates revenue to be approximately 203.0 million, lower than
its prior expectation of $213.0-$215.0 million for the fourth
quarter of fiscal 2012.
Seasonality as well as the lack of variety in merchandise
offerings in several categories hurt comps in the quarter. Hence,
to manage inventory, the company banked on various sales-driven
initiatives that in turn hurt margins. Decline in margins
resulted in lower earnings per share.
Earnings per share for the fourth quarter of fiscal 2012 are
expected in the range of 35-37 cents, much lower than its
previous expectation of 58-61 cents. In response to the guidance
cut, the Zacks Consensus Estimate went down 38.3% to 37 cents per
share over the last 7 days.
This is not the first time Gordmans Stores slashed its guidance.
In concurrence to its third-quarter earnings release, management
lowered its earnings per share guidance from the range of
$1.46-$1.51 to $1.39-$1.42.
Also, the company lowered its top-line expectation to the range
of $618-$620 million from $624-$628 million for fiscal 2012. In
the prior quarter too, Gordmans had slashed its revenue guidance
from $629-$634 million to $624-$628 million.
Sluggish comps growth and successive declines in revenue guidance
indicates tough operating environment for the company. Even an
extra additional operating week in fiscal 2012 compared with the
previous year failed to trigger the company's business for the
However, Gordmans Stores is in an expansion mode mainly in new
markets. It has expanded its store base by 50% year over year in
2012. For 2013, the company plans to open 10 new stores in 6 new
and 2 existing markets. Gordmans, with these store openings, will
increase its store count by nearly 40% to 93 stores over a
Currently, Gordmans Stores has a Zacks Rank #3 (Hold). However,
retailers currently doing well include
Big Lots Inc.
Ross Stores Inc
). All three companies carry a Zacks Rank #2 (Buy).