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Gottschalks reports lower numbers in Q1

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 as well as weaker comps. Same-store sales declined by 4.0 percent.

Average gross margin thinned by 30 basis points, or three-tenths of a percentage point, to 33.8 percent from 34.1 percent last year. Operating costs were pared by 4.6 percent, to $49.5 million from $51.9 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.

Gottschalks Inc.

Qtr. 5/3 (x000) 2003 2002 % change
a-Net sales, excluding credit revenues of $1.5 million, down 40.3 million from $2.8 million last year.
b-First-quarter results include store closing costs of $146,000; miscellaneous income of $431,000, compared with $381,000 last year; and an income-tax benefit of $2.3 million, compared with $1.7 million a year ago.
Sales $140,619a $149,560a -6.0
Oper. income (EBIT) (3,308) (980)
Net income (3,987)b (2,672)b
Per share (diluted) (0.31) (0.21)
Average gross margin 33.8% 34.1%
SG&A expenses 35.2% 34.7%

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