NEW YORK — The usual suspects — weak economy, war and bad weather — depressed Gottschalks Inc.’s same-store and net sales in the first quarter, deepening its net loss.
For the three months ended May 3, the Fresno, Calif.-based regional department store chain said its net loss expanded to $4 million, or 31 cents a diluted share, versus the loss of $2.7 million, or 21 cents, in the first quarter of 2002.
Total revenues for the period fell 6.5 percent to $142.8 million from $152.8 million, as same-store sales declined 4 percent. Gottschalks said the sales decrease was partly because of its closure of seven underperforming stores since the year-ago quarter.
“Despite the lower-than-anticipated sales, we are very pleased with the results being generated at the majority of the remaining 21 stores in the Pacific Northwest,” said chief executive officer Jim Famalette on a conference call. “Our stores in this region turned in a good performance during the first quarter, generating a comparable-store sales increase. The results from our six Alaska stores were particularly strong, where we achieved a 6 percent increase in sales for these six stores compared with the same period last year.”
Further deepening the loss was a 140 basis point increase in cumulative costs, which include cost of goods, as well as selling, general and administrative expenses. Store closure costs also depleted the bottom line by about $146,000.
In February, Gottschalks set a five-point strategy to beef up its operations. Besides selling its private label credit card business for $102.8 million, the firm streamlined its store base, reduced SG&A costs by $15 million last year and restricted planned capital expenditures to cover the maintenance and improvement of the existing store base.
Additionally, the retailer, in an effort to differentiate its offering, will more aggressively pursue private label brands. Private label sales in 2003 are slated to grow by 15 percent to about $80 million, or almost 12 percent of total owned sales.
Looking ahead, Gottschalks expects second-quarter comps to be flat with a slight improvement in gross margins and reductions in expenses. As a result, Gottschalks said it forecasts second-quarter results to be better than last year’s $2.1 million loss.
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