NEW YORK — As Gottschalks Inc. celebrates its 100th anniversary this week, management expects 2004 to be a banner year, with 2005 and beyond shaping up to be equally impressive.
The Fresno, Calif.-based retailer said it will achieve stronger financial results by continuing to leverage improvements made over the past three years, as well as by taking on new initiatives such as growing its private label program.
Gottschalks is celebrating its 100th birthday on Friday by ringing the closing bell at the New York Stock Exchange. Chairman Joseph Levy and chief executive officer Jim Famalette will do the honors.
In a phone interview earlier this week, Famalette said he was pleased with the financial improvements made by the company. “This is a very exciting time for Gottschalks,” he said. “We are commemorating our 100 years of operation….We foresee a successful 2004, with significant growth in earnings over 2003’s earnings of 15 cents a share. Our guidance for 2004 is between 41 cents and 43 cents a share, almost tripling our result last year.”
The company also expects a 50 percent gain in EPS for 2005, climbing to the 60-cent range, as well as an additional 50 percent increase in 2006, bringing the EPS for that year up to 90 cents. According to the ceo, the company also expects “same-store sales gains over the next couple of years in the 2 to 3 percent range.”
The 73-unit chain tripled its earnings in the past 12 months by focusing on reducing expenses. Their goal is to have a selling, general and administrative expense ratio in the range of 30 percent of sales. The company is also aiming to grow its private label product from 12 percent of sales now to about 15 percent of sales in three years.
“What has been a huge contributor is our dynamic replenishment system, as well as better inventory management, both of which allow our merchandise to turn quickly,” Famalette said.
In addition to more upscale and hipper brands such as O’Neill, Rusty, Ecko Red, JLo and Baby Phat, the company said it will also launch a 100,000-square-foot lifestyle concept store in Fresno in mid-2005, which will serve as both flagship and prototype for future store expansion.