NEW YORK — With a firm grasp on inventories and expenses, Gottschalks Inc. cut its losses during the first quarter.Net losses for the period narrowed to $2.7 million, or 21 cents a share, against red ink of $4.6 million, or 36 cents, in the year-ago quarter.Revenues for the quarter ended May 4 receded 5 percent to $152.8 million from $160.8 million a year ago. Same-store sales were down 1.7 percent.Jim Famalette, president and chief executive, said in a statement, “Cost containment initiatives are continuing to contribute to our improved performance.” Selling, general and administrative expenses dropped by 50 basis points in the quarter.The Fresno, Calif.-based regional department store operator cut its inventories dramatically, producing an 11.6 percent decrease on a same-store basis. “Primarily as a result of these lower inventory levels, our gross margin increased 150 basis points,” said Famalette.In the first quarter, the firm begin seeing improvement in the majority of its Pacific Northwest stores, resulting from “a more focused inventory assortment, stronger operations controls and several new targeted direct marketing efforts,” said the ceo.Gottschalks moved into the region en masse in July 2000 when it acquired the 34-unit Lamonts Apparel chain out of bankruptcy. The 73-unit chain is looking for second quarter losses of 13 to 18 cents a share, compared with last year’s second-quarter deficit of 19 cents, before one-time items. Top-line trends are expected to improve gradually during the quarter while same-store sales come in flat. For the full year, Gottschalks added a couple of cents to the bottom of its diluted earnings per share projections and is now looking for profits of 47 to 55 cents. Previously, the firm indicated it would post earnings of 45 to 55 cents a share for the year.The firm said this month that James Czech has been added to its board. Czech is president of the development group of Urban Retail Properties.

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