GADZOOKS NET SURGES IN QUARTER
NEW YORK — A combination of internal disciplines and external marketing initiatives enabled Gadzooks to register a 71.3 percent increase in fourth-quarter net income and more than double earnings for the year.
For the three months ended Feb. 3, net income vaulted to $6.4 million, or 69 cents a diluted share, against $3.8 million, or 42 cents, in the year-ago quarter. Analysts had penciled in earnings expectations averaging 65 cents a share. Sales advanced 25 percent, to $93.9 million from $75.1 million, and were up 1.7 percent on a comparable-store basis.
“The fourth quarter was a strong finish to a great year for Gadzooks,” said Jerry Szczepanski, chairman and chief executive, in a statement. He described current inventories as “clean” and the firm as “optimistic about our spring merchandise.”
For the full year, earnings more than doubled, to $12.8 million, or $1.38 a diluted share, 110.7 percent higher than the prior-year level of $6.1 million, or 67 cents. Sales finished at $288.4 million, 20 percent above the $240.3 million posted a year earlier. Comps climbed 7.6 percent, up from 5.4 percent in fiscal 1999.
“During the year, we executed on a number of different levels,” said Szczepanski. “Financially, we were able to translate solid topline gains into substantial earnings growth.”
Among the annual highlights cited by the ceo were the elevation of operating margin to 6.7 percent from 4.5 percent, exclusive of store closing provisions, in the prior year; the opening of 52 new stores and “significant operating improvement in our Northeast stores. In merchandising, we introduced three private labels, partnered with several vendors on merchandise exclusives and enhanced our visual merchandising program.”
Dallas-based Gadzooks operates 374 stores in 36 states and focuses on casual teen apparel. Although earnings were released late Monday, shares were up 6 cents, to close at $19.06 in Nasdaq trading. The firm’s 52-week high is $24.75 with a low of $7.50.