Fourth Quarter Highlights (4QFY11 vs. 4QFY10)
Fiscal 2011 Highlights (FY11 vs. FY10)
Fiscal 2012 Outlook
For the fiscal year ending
During fiscal 2011, the Company opened twelve DXL stores, bringing the total number of DXL stores to sixteen. Fourteen of these stores are considered "comp stores" and had a combined comparable store sales increase of 9.0% and 12.8% for the fourth quarter and fiscal year 2011, respectively, when compared to the prior year store sales in each market area. The inventory assortment in the DXL store brings all of the Company's brands together under one roof, which introduces our customer to an expanded selection of merchandise and improves the shopping experience. The size of the DXL stores, which have almost triple the product assortments of Casual MaleXL stores, currently averages 10,000 square feet. Future DXL openings are expected to average 8,500 to 9,000 square feet within a target range of 7,000 to 10,000 square feet depending on the needs of each specific market. The Company
expects the average buildout to be in the
The Company expects to have 150-175 DXL store locations by the end of fiscal 2015 and management sees the potential for DXL to ultimately reach up to 250 stores. The increase in the potential number of DXL stores by approximately 150 stores is a result of the successful test of the smaller-sized DXL stores in 2011. At the same time, the Company intends to close or replace the majority of its Casual MaleXL stores with DXL stores over the next several years, retaining primarily its outlet stores in the long term, and expects to have approximately 150 Casual MaleXL stores and 6 Rochester Clothing stores by the end of 2015. Because the selling square footage of a DXL store is significantly larger than a Casual Male store, we do not expect a significant decrease in total selling square footage despite the decline in store counts. In fiscal 2012, the Company plans to open 35 new DXL stores and expects to close approximately 70 Casual MaleXL and 2 Rochester Clothing stores.
In the third quarter of fiscal 2011, the Company launched its DestinationXL website. Similar to the store concept, the DestinationXL website combines all of the Company's existing e-commerce websites into one enhanced website, enabling customers to shop across all of the Company's brands and product extensions. No longer is a Rochester Clothing or a Casual MaleXL customer limited in his ability to access the Company's full product assortment.
Subsequent to year end, the Company decided to discontinue its European Direct business including terminating its contract with
The Company recorded a non-cash impairment charge in the fourth quarter of fiscal 2011 of
For the fourth quarter of fiscal 2011, total sales of
For fiscal 2011, total sales increased 1.0% to
Sales for fiscal 2011 were below plan, primarily due to a 3.1% decline in total store traffic compared to fiscal 2010. While the Company continues to see improvements in its "average retail" metrics, store traffic and an unseasonably mild winter directly affected sales. Sales for the first six months of fiscal 2011 were trending in line with expectations, with a comparable sales increase of 3.5% and store traffic down only 1.5%. However, in the third quarter of fiscal 2011, store traffic was down 5.6% and although it improved slightly in the fourth quarter to a negative 3.7%, total sales for fiscal 2011 were adversely impacted.
Gross Profit Margin
In the fourth quarter of fiscal 2011, gross profit margin decreased 70 basis points to 44.7%. This decrease was comprised of a 60 basis point decrease in merchandise margin, and a 10 basis point increase in occupancy costs. In order to maintain appropriate inventory levels and improve customer traffic in the fourth quarter, the Company increased its promotional activity and reduced pricing on seasonal inventory, which had a negative impact on the gross margin rate through increased markdowns.
For fiscal 2011, gross margin increased 40 basis points as compared to fiscal 2010. The increase of 40 basis points was comprised of a 25 basis point increase in merchandise margin and an improvement of 15 basis points in occupancy costs.
On a dollar basis, SG&A expenses decreased 0.9% to
For fiscal 2011, SG&A expenses as a percentage of sales were 38.9% as compared to 38.3% for fiscal 2010. SG&A expenses increased 2.5% as compared to fiscal 2010 to
Net interest expense for the fourth quarter of fiscal 2011 was flat when compared to the fourth quarter of fiscal 2010.
For fiscal 2011, net interest was
Provision for Income Taxes
The income tax provision for the fourth quarter and fiscal year 2011 of
Cash flow from operating activities was
Balance Sheet & Liquidity
The Company spent
Inventories at the end of fiscal 2011 increased 12.2% to
In addition to financial measures prepared in accordance with generally accepted accounting principles (GAAP), the above discussion refers to non-GAAP adjusted net income and related non-GAAP diluted earnings per share ("non-GAAP" or "adjusted"). These measures should not be considered superior to or as a substitute for net income or diluted earnings per share derived in accordance with GAAP. The Company believes that these non-GAAP measures are useful as an additional means for investors to evaluate the Company's operating results, when reviewed in conjunction with the Company's GAAP financial statements. The Company believes the inclusion of these non-GAAP measures enhance an investor's understanding of the underlying trends in the Company's business and provide for better comparability between different periods in different years.
The above discussion also refers to free cash flow, which also is a non-GAAP measure. The presentation of non-GAAP free cash flow is not a measure determined by GAAP and should not be considered superior to or as a substitute for net income or cash flows from operating activities or any other measure of performance derived in accordance with GAAP. In addition, all companies do not calculate non-GAAP financial measures in the same manner and, accordingly, "free cash flows" presented in this release may not be comparable to similar measures used by other companies. The Company calculates free cash flows as cash flow from operating activities less capital expenditures and less discretionary store asset acquisitions, if applicable.
Below are tables showing the reconciliation of all GAAP measures to non-GAAP measures.
Investors are invited to listen to a broadcast of the Company's conference call to discuss its fiscal 2011 earnings results. The conference call will broadcast live today,
During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends. The Company's responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.
Certain information contained in this press release, including the Company's expectations regarding operating results for fiscal 2012 as well as the Company's expectations regarding store openings and closings during fiscal 2012, constitutes forward-looking statements under the federal securities laws. The discussion of forward-looking information requires management of the Company to make certain estimates and assumptions regarding the Company's strategic direction and the effect of such plans on the Company's financial results. The Company's actual results and the implementation of its plans and operations may differ materially from forward-looking statements made by the Company. The Company encourages readers of forward-looking information concerning the Company to refer to its prior filings with the
Forward-looking statements contained in this press release speak only as of the date of this release. Subsequent events or circumstances occurring after such date may render these statements incomplete or out of date. The Company undertakes no obligation and expressly disclaims any duty to update such statements.
[tables to follow]
GAAP TO NON-GAAP NET INCOME AND EPS RECONCILIATION
For the three months
For the twelve months
EPS, on a
EPS, on a
(in thousands, except per share data)
Net income, on a GAAP basis
Provision for trademark impairment
Non-Recurring Reversal of Valuation Allowance
Adjusted net income, on a Non-GAAP basis
Weighted average number of common shares
outstanding on a diluted basis
GAAP TO NON-GAAP FREE CASH FLOW RECONCILIATION
Cash flow from operating activities (GAAP)
Cash flow from operations before change in
operating assets and liabilities
Change in operating assets and liabilities
Cash flow from operating activities (GAAP)
Less: Capital expenditures
Less: Store acquisitions, if applicable
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
For the three months ended
For the year ended
Cost of goods sold including occupancy
Selling, general and administrative
Provision for trademark impairment
Depreciation and amortization
Other income (expense), net
Interest expense, net
Income before income taxes
Provision (benefit) for income taxes
Net income per share - basic
Net income per share - diluted
Weighted-average number of common shares outstanding:
CONSOLIDATED BALANCE SHEETS
Cash and cash equivalents
Other current assets
Property and equipment, net
Goodwill and other intangibles
Deferred tax assets
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable, accrued expenses
and other liabilities
Deferred gain on sale-leaseback
Total liabilities and stockholders' equity
News Provided by Acquire Media