Cost Plus, Inc. Reports Second Quarter 2007 Results, Provides Financial Guidance for Third Quarter and Announces New Chief Financial Officer.Buyer Margin Stabilized; Adjustment Taken for Inventory Shrink OAKLAND, Calif. -- Cost Plus, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CPWM CPWM Certified Public Works Manager (New Jersey state license) CPWM Controlled Pulsewidth Modulation ) today announced financial results for its second quarter ended August 4, 2007 and provided financial guidance for the third quarter of fiscal 2007. Second Quarter Results Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the second quarter of fiscal 2007 were $215.2 million, compared to $215.3 million for the second quarter of 2006. Same store sales Same Store Sales A statistic used in retail industry analysis. It compares sales of stores that have been open for a year or more. Notes: This statistic allows investors to determine what portion of new sales has come from sales growth and what portion from the opening of for the quarter decreased 7.6% compared to a 3.2% decrease last year. The second quarter of fiscal 2006 was characterized by clearance sales in order to reduce aged and discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: inventory. Buyer margin increased 270 basis points over last year and, when normalized for the $0.17 per share inventory markdown Markdown The difference between the highest current bid price among broker-dealers in the market and the lower price that a dealer charges a customer. Notes: The broker offers a lower price to try stimulate trading in hopes that they will make the money back on the extra charge that was taken last year to move aged inventory, was approximately flat. Gross profit was negatively impacted by greater than anticipated inventory shrink expense following the completion of a chain-wide physical inventory. The loss, validated by a physical inventory completed in all locations during the second fiscal quarter, was $0.15 per share higher than estimated in guidance. The Company undertook the chain-wide physical inventory to improve financial controls and obtain the data integrity needed to continue to reduce inventory levels. Net loss for the second quarter of fiscal 2007 was $18.0 million, or $0.81 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared to a net loss of $14.2 million, or $0.64 per diluted share, for the same period last year. Absent the additional adjustment taken for inventory shrink, the net loss would have been $0.66 per share, within guidance for the quarter. During the quarter, the Company converted its $125 million unsecured revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility to a $200 million asset based facility. The new facility also has an accordion accordion, musical instrument consisting of a rectangular bellows expanded and contracted between the hands. Buttons or keys operated by the player open valves, allowing air to enter or to escape. The air sets in motion free reeds, frequently made of metal. feature that allows the Company to borrow an additional $50 million for a maximum of $250 million in borrowings. CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. and President Barry Feld commented, "Progress was made on the turnaround during the quarter including stabilizing our buyer margin, improving the supply chain, continuing to migrate customers away from high-low promotional pricing to an everyday value pricing For the strategic management concept, see . In public roads and transport, value pricing or road pricing is the practice of raising funds by charging users directly rather than via taxation. strategy, and extending the reach of opening price points across more merchandise categories." "Additionally, since undertaking the turnaround initiatives, the Company has absorbed significant expense associated with inventory adjustments that are now behind us. We have implemented the discipline necessary to exit seasonal and discontinued product on a timely basis, and added tight controls over inventory investments that have thus far resulted in a 7% decrease in average inventory per store and a 10 basis point increase in turnover. We believe this will result in improved merchandise margin," concluded Mr. Feld. The Company opened four new stores and closed none during the second quarter and ended the quarter with 296 stores in 34 states versus 274 stores in 34 states at the end of the second quarter of fiscal 2006. Financial Guidance for Third Quarter Although sales for the first three weeks of August were notably higher than in the prior year, the Company expects a same store sales decrease in the range of 3% to 6% for the third quarter of fiscal 2007. This results in net sales in the range of $217 million to $223 million, based on the opening of no more than 1 net new store, compared to 9 net new stores in the same period last year. The guidance reflects continued pressure on sales due to the challenging economic environment coupled with the absence of aggressive promotional and coupon activity that the Company engaged in last year. Buyer margin for the third quarter is expected to be flat compared to last year. However, the gross profit rate will be lower than last year due to higher fixed occupancy and distribution expense on lower same store sales. SG&A expense as a percentage of sales for the third quarter is expected to increase slightly primarily as a result of lower same store sales. For the third quarter of fiscal 2007, the Company is projecting a net loss in the range of $16 million to $18 million, or a net loss of $0.73 to $0.80 per diluted share. The Company will provide fourth quarter guidance in November when it releases financial results for the third quarter. New Chief Financial Officer The Company also announced today that Thomas D Thomas D. (born Thomas Dürr, December 30 1968 in Ditzingen close to Stuttgart, Germany) is a rapper in the German hip hop group Die Fantastischen Vier. He frequently works on solo projects. Life After finishing Realschule he took on an apprenticeship as a barber. . Willardson, Executive Vice President, Chief Financial Officer, has left the Company. "We would like to thank Tom for his many years of service both as a board member and as an executive officer, and wish him much success in his future endeavors," commented CEO Barry Feld. Jane L. Baughman has been promoted to the position of Executive Vice President, and Chief Financial Officer, replacing Mr. Willardson. Ms. Baughman was the Company's Senior Vice President of Financial Operations. She joined the Company in 1996 and has been closely involved with the development and implementation of the turnaround initiatives. CEO Barry Feld stated, "With over a decade of financial and operational experience at the Company, Jane has the respect and trust of all her colleagues, the board of directors and a number of other stakeholders Stakeholders All parties that have an interest, financial or otherwise, in a firm-stockholders, creditors, bondholders, employees, customers, management, the community, and the government. with whom she has worked. Her detailed understanding of the turnaround and its financial metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. will be a great asset in her expanded role. I look forward to working with her as my financial right hand as we continue driving the Company to profitability." Prior to joining the Company, Ms. Baughman served in various financial positions for The Nature Company and The Gap, Inc., and in investment banking for Dillon Read & Co. Inc. Reporting to Ms. Baughman are Timothy Lester, Vice President, Controller and Principal Accounting Officer and Anne Mirante, Vice President, Finance and Treasurer. The Company's second quarter earnings conference call is today, August 30, 2007, at 1:30 p.m. PT. It will be in a "listen-only" mode for all participants other than the sell-side and buy-side investment professionals who regularly follow the Company. The toll-free phone number for the call is 866-713-8307 and the access code is 42541068. Callers should dial in approximately 15 minutes prior to the scheduled start time. A telephonic replay will be available at 888-286-8010, Access Code: 77083229, from 6:30 p.m. PT Thursday August 30, 2007 to 6:30 p.m. PT on Thursday, September 13, 2007. Investors may also access the live call or the replay over the internet at www.streetevents.com; www.fulldisclosure.com and www.worldmarket.com. The replay will be available approximately four hours after the live call concludes. Cost Plus, Inc. is a leading specialty retailer of casual home living and entertaining products. As of August 30, 2007, the Company operated 298 stores in 34 states. The above statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc anticipated fiscal 2007 third quarter results are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " that are based on current expectations and are subject to various risks and uncertainties, which could cause actual results to differ materially from those forecasted. Such risk factors include, but are not limited to: changes in economic conditions that affect consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. ; changes in the competitive environment; interruptions in the flow of merchandise; changes in the cost of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. purchased including fuel, transportation and insurance; a material unfavorable outcome with respect to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , claims and assessments; the effects associated with terrorist acts; changes in accounting rules and regulations; and accounting adjustments identified in closing the Company's books. Please refer to documents on file with the Securities and Exchange Commission for a more detailed discussion of the Company's risk factors. The Company does not undertake any obligation to update its forward-looking statements. [TABLE OMITTED] [TABLE OMITTED] |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion