Gordmans Stores Inc.
) posted earnings per share of 18 cents in the second quarter of
fiscal 2012, in line with the Zacks Consensus Estimate. The result
surpassed the year-ago quarter's earnings of 15 cents per
Behind the Headline Numbers
Net sales for Gordmans Stores grew 9.6% year over year in the
first quarter to $128.2 million supported by the four new stores
opened in the last three quarters of fiscal 2011 and the four new
stores opened in the first quarter of this year.
Quarterly comparable store sales (comps) nudged up 0.1% year
over year. As expected, Apparel outperformed others in the quarter,
clocking a low single-digit comps increase. This gain was offset
heavily by low and mid-low comps decline in home fashions and
During the quarter, Gordmans Stores' gross margin expanded 90
basis points (bps) to 11.8% due to lower mark-downs combined with
higher initial mark-up. Selling, general and administrative costs
as a percentage of total revenue were up 60 bps year over year due
to higher health and workers' compensation insurance benefits as
well as occupancy costs.
At quarter end, Gordmans Stores had cash and cash equivalents of
$44.1 million and total non-current liabilities of $22.4
The company opened three new stores and entered one new market,
Indianapolis, during the second quarter of 2012. The company will
end the year with a total of nine new stores representing a 12%
expansion of store base.
For the third quarter of 2012, management expects net sales in
the range of $145-$147 million and earnings per share in the range
of 24-26 cents.
For full fiscal 2012, Gordmans Stores has lowered its top-line
expectation to the range of $624-$628 million from the $629-$634
million range. However, guidance for earnings per share was
reiterated at $1.46-$1.51.
Gordmans Stores houses a large pool of the latest brands and
fashion. The company is in an expansion mode in new as well as
existing markets. Additionally, fiscal 2012 includes an additional
week which will benefit the comps. The company is also planning to
launch a loyalty program to ensure steady traffic. However,
sluggish comps growth and a decline in revenue guidance remain
causes of concern.
Gordmans Stores, which competes with
Dollar Tree Inc.
), currently has a Zacks #3 Rank, which translates into a
short-term 'Hold' rating. We are also maintaining our long-term
"Neutral" recommendation on the stock.
DOLLAR TREE INC (DLTR): Free Stock Analysis
GORDMANS STORES (GMAN): Free Stock Analysis
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