Regional department store operator Gordmans Stores reported disappointing fourth quarter sales and indicated 2013 is of to a slow start.
Sales for the 14 week fourth quarter ended February 2 increased 9.4% to $202.5 million, but the gain was driven entirely by an additional week in the reporting period and the opening of nine new stores in four new markets and two new states. Same stores sales declined 4.1%.
Earnings per share of 41 cents exceeded guidance the company revised in mid-January that lowered expectations to a range of 35 cents to 37 cents from an earlier estimate of 58 cents to 61 cents provided at the end of the third quarter.
Same store sales that were much weaker than expected caused key metrics to suffer. Gross margins fell to 38.7% of sales from 40.1% and expenses increased to 32.4% of sales from 31.3% of sales.
Full year sales increased 10.2% to $607.7 million compared to $551.5 million in fiscal year 2011. Net income decreased 6.5% to $23.5 million, or $1.21 per share, compared to net income of $25.2 million, or $1.30 per share in fiscal 2011.
"While we are disappointed with our recent results, including a slow start to fiscal 2013, we believe that the strategic initiatives that we have put in place, in concert with the change in our senior leadership team, will produce improved comparable sales as the year progresses," said Jeff Gordman, president and CEO of the 86 unit department store chain. "In addition, we will continue our expansion strategy with the opening of 10 new stores in a combination of new and existing markets."
The change Gordman referenced involved the February 11 appointment of Michael Morand as EVP and chief merchandising officer. Morand previously served as the company’s EVP of planning, allocation and analysis since 2008. He joined the Omaha-based retailer in 2007 after holding senior level positions at May Department Stores and other department stores.
"His merchandising acumen, strategic planning proficiency and inventory management expertise make him the perfect choice to lead the combined merchandising and planning team, serving in a critical role necessary to achieve our strategic objectives and drive Gordmans' continued expansion in both new and existing markets," Gordman said at the time of Morand’s promotion.