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Cost Plus 2Q loss widens, comps gain slightly

OAKLAND, Calif. — Cost Plus reported that net sales for the second quarter of fiscal 2011 were $197.9 million, a 3.2% increase compared with $191.8 million for the second quarter of fiscal 2010. Same-store sales for the second quarter of fiscal 2011 increased 2.8% compared with a 6.5% increase for the second quarter last year. The increase in same-store sales for the second quarter was due to an increase in customer count of 5.5% offset by a 2.5% reduction in the average ticket per customer, the company reported.

Cost Plus reported that net loss for the second quarter of fiscal 2011 was $8 million, or 36 cents per diluted share, compared with a net loss of $7 million or 32 cents per diluted share for the second quarter of fiscal 2010. 

Barry Feld, President and Chief Executive Officer, commented, “I am pleased with our second quarter results which exceeded our bottom line guidance despite a challenging outdoor season. We correctly anticipated a more promotional environment this year which was further exacerbated by the recent economic conditions. We remain cautiously optimistic about consumer sentiment as we move into the fall season and our third quarter guidance reflects a continuation of increased promotional activity. World Market has proven its ability to weather difficult economic periods by carefully balancing traffic driving activities with tight fiscal discipline to achieve its bottom line financial metrics.”

Cost Plus said it closed five stores in the first six months of fiscal 2011, as compared with relocating one store and closing five stores in the first six months of fiscal 2010. 

For the third quarter of fiscal 2011, the company expects net sales in the range of $197 million to $200 million, based on a same -tore sales increase in the range of 2% to 4% compared with a same-store sales increase of 8.8% for the third quarter of fiscal 2010. For fiscal 2011, the company expects net sales in the range of $946 million to $956 million, based on a same-store sales increase in the range of 4% to 5% compared to a same-store sales increase of 7.2% for fiscal 2010.

The company is projecting a net loss from continuing operations for the third quarter of fiscal 2011 in the range of $9 million to $8 million or 40 cents to 36 cents per diluted share compared to a net loss from continuing operations of $7.4 million for the third quarter of fiscal 2010. For fiscal 2011, the company projects net income from continuing operations in the range of $13 million to $15 million or 54 cents to 63 cents per diluted share compared to net income from continuing operations of $4.7 million for fiscal 2010.

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