Losses widen at Gottschalks in Q1
GDA Staff -- Gifts & Dec, May 29, 2003
Fresno, CA — With sales trailing off, margins thinning out and costs still running high, West Coast retailer Gottschalks Inc. reported a widening first-quarter loss of $4.0 million, compared with a year-ago deficit of $2.7 million.
Putting earnings under heavy pressure, sales declined by 6.0 percent, to $140.6 million from $150.0 million last year, the result of seven fewer stores in operation and weaker comps. Same-store sales declined by 4.0 percent.
Putting earnings under further pressure, average gross margin thinned by 30 basis points, or three-tenths of a percentage point, to 33.8 percent from 34.1 percent a year. Operating costs were pared by 4.6 percent, to $49.5 million from $51.9 million, a cash savings of $2.4 million. But given the revenue shortfall, costs climbed higher as a percentage of sales, to 35.2 percent from 34.7 percent.
With costs climbing higher than margins, the retailer generated an operating loss of $3.3 million, three times the size of last year's deficit of $980,000.
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