NEW YORK — Gottschalks Inc. Tuesday said it narrowed its second-quarter loss but expects a loss in the current third quarter.
For the three months ended Aug. 3, the loss was just $2.1 million, or 17 cents a share, compared with last year’s loss in the same quarter of $2.8 million, or 22 cents. The loss excludes the impact, if any, from a change in accounting rules pertaining to goodwill. The company said it was in the early stages of its transitional goodwill impairment test.
The quarter’s results include pretax income of $300,000 related to the sale of store leases and a $400,000 nonrecurring pretax charge relating to fees in connection to an amendment to the company’s revolving credit facility. A $700,000 one-time charge for store closure costs is also included.
Total revenues were down 2 percent to $158.5 million from $161.7 million. Revenues in the quarter included a 1.8 percent drop in sales to $155.9 million, a 6.2 percent decrease in credit revenues to $1.9 million from $2 million and a 22 percent decline in leased department revenues to $759,000 from $972,000. Same-store sales dipped by 0.5 percent.
James Famalette, president and chief executive officer, said in a statement: "Our margin improvement during the last two quarters reflects better flow of new goods, lower inventory levels and significantly less clearance merchandise than last year. Our cost-containment program has allowed us to reduce our expenses in the first six months by more than $4 million, despite increases in health care, worker’s comp and property insurance costs."
For the third quarter, the company projected a diluted loss per share in the range of 13 cents to 17 cents. For the full fiscal year, however, the Fresno, Calif.-based retailer expects profits of 44 to 50 cents a share, excluding the effect, if any, of the accounting change.
For the six months, the the loss was $4.8 million, or 38 cents a share, from $7.4 million a year ago, or 58 cents. Total revenues fell by 3.5 percent to $311.3 million to $322.5 million. Sales declined 3.3 percent to $305.4 million from $315.9 million and fell 1 percent on a same-store basis.The company closed six stores in 2001 and two additional stores in July. It currently operates 71 units.
The company said that its chief executive officer and chief financial officer will certify the company’s quarterly report on or before the filing due date of Sept. 17.
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