Frederick's of Hollywood Group Inc.announced the financial results for its fiscal 2012 fourth quarter and year ended July 28,2012.
"We have made significant adjustments to our operations over the past few years that have led to improvements in our overall business model.While there is no question that executing our turnaround strategy has been challenging,we have steadily reduced operating losses and believe that we are on a path toward achieving long-term profitability,"stated Thomas Lynch,the Company's Chairman and Chief Executive Officer.
"We are focused on continuing to strategically utilize our resources to drive more profitable sales through disciplined expense management,proper inventory levels and an innovative promotional strategy.We believe that executing our fiscal 2013 operating initiatives also will improve our business.
"These initiatives include expanding our product categories,augmenting our product mix to include more branded products,offering a broader assortment of merchandise at varying price points,and implementing a new marketing strategy that utilizes a'brandzine,'or branded magazine for mailings,and the latest digital marketing tools online such as digital display advertising,email retargeting and increased search marketing,"concluded Mr.Lynch.
The Company also announced that it will no longer report monthly comparable store sales after reporting them for the past year and will return to just reporting its quarterly financial results."We believe that returning to reporting our comparable store sales quarterly will enable investors to focus more on our longer-term overall financial performance,"stated Mr.Lynch.
Fiscal Year Ended July 28,2012 Compared to Fiscal Year Ended July 30,2011:
Net loss applicable to common shareholders was$6.5 million,or$(0.17)per diluted share,compared to a net loss of$12.1 million,or$(0.31)per diluted share.Net sales decreased 6.9%to$111.4 million from$119.6 million.Comparable store sales increased 0.5%.Total store sales decreased 2.0%to$70.8 million.Direct sales decreased 9.7%to$35.8 million.Other revenue decreased 33.3%to$4.7 million.Gross margin,as a percentage of net sales,increased to 37.4%from 35.9%,which was primarily attributable to a$4.0 million increase in vendor allowances for the year ended July 28,2012 as compared to the year ended July 30,2011.Selling,general and administrative expenses decreased by 8.0%to$45.8 million,or 41.1%of sales,from$49.8 million or 41.6%of sales.
Fiscal 2012 Fourth Quarter Compared to Fiscal 2011 Fourth Quarter:
- Net loss applicable to common shareholders was$4.0 million or$(0.10)per diluted share,compared to a net loss of$7.2 million or$(0.19)per diluted share.
-
Net sales decreased 21.2%to$20.3 million from$25.8 million.
- Comparable store sales decreased 10.1%.
- Total store sales decreased 14.6%to$13.6 million.
- Direct sales(catalog and website operations)decreased 21.7%to$6.2 million.
- Other revenue,consisting of shipping revenue,commissions earned on direct sell-through programs,breakage on gift cards and product sales to the Company's licensing partner in the Middle East,decreased 71.6%to$0.6 million.
- Gross margin,as a percentage of net sales,increased to 32.4%from to 29.4%.
- Selling,general and administrative expenses decreased by 21.4%to$9.5 million,or 46.7%of sales,from$12.1 million or 46.8%of sales.
Frederick's of Hollywood Group Inc.,through its subsidiaries,sells women's intimate apparel and related products under its proprietary Frederick's of Hollywood brand through 118 specialty retail stores,a catalog and an online.
