Weak sales to blame for Duckwall-Alco Q1 negative results
June 11, 2010,
Net sales from continuing operations in the first quarter, ended May 2, decreased 1.9% to $113.0 million, and same-store sales decreased 2.7%.
Net loss for the first quarter was $1.9 million, or 51 cents per diluted share, compared to a net loss of $50,000, or 1 cent per diluted share, for fiscal 2010' first quarter.
"First-quarter results were negatively impacted by weak sales, which reduced gross margin contribution by approximately $950,000," explained Richard Wilson, president and ceo. "We needed to take $1.4 million in clearance markdowns to address aged inventory, and sales mix also impacted results by approximately $630,000. We continued to make progress on SG&A expense with an overall reduction of $789,000 primarily as a result of additional savings on store labor and benefits."
He added that the company continues to be focused in fiscal 2011 "on executing five core initiatives designed to increase store traffic, maximize profitability and drive shareholder value. In addition, we have significantly strengthened our balance sheet by reducing debt."
Duckwall-Alco's five core initiatives in place this year include:
A focus on "everyday value" with a core assortment of high quality and competitively priced merchandise; driving traffic with expanded food and consumable assortments; improving profitability and prices with an emphasis on growing private label products; rationalizing assortments to provide a better shopping experience and improve operating results; and building store productivity by refining space allocation and productivity metrics.
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