Body Central Corp. announced financial results for the third quarter and for the thirty-nine week period ending September 29, 2012.
Highlights for the third quarter ended September 29, 2012:
- Net revenues for the quarter increased 1.2% to $67.9 million, compared to $67.1 million for the third quarter of 2011.
- Store sales rose 1.7% to $62.0 million driven by net store unit growth of 16.4 % offset by a comparable-store sales decrease of 11.9%.
- Income from operations was $196,000 as compared to $4.7 million in the third quarter of 2011. Included in the above numbers for 2012 is $600,000 in severance costs related to the resignation of the former CEO, and for 2011 is $350,000 in severance costs related to the former CFO.
- Net income was $153,000, or $0.01 per diluted share based on 16.3 million weighted average shares outstanding. Excluding the CEO severance costs, net income for the third quarter of 2012 was $526,000 or $0.03 per diluted share. Net income for the third quarter of 2011 was $2.8 million, or $0.18 per diluted share based on 16.2 million weighted average shares outstanding. Excluding the CFO severance costs, net income for the third quarter of 2011 was $3.1 million or $0.19 per diluted share.
- The Company opened 7 new stores and closed 1 store during the third quarter and operated 263 stores as of September 29, 2012.
Highlights for the thirty-nine weeks ended September 29, 2012:
- Net revenues increased 6.6% to $230.0 million from $215.8 million for the same period a year ago.
- Store sales rose 6.6% to $201.3 million and comparable-store sales decreased 6.7% from the same period in 2011.
- Income from operations was $15.2 million as compared to $21.6 million in the same period last year. Operating margin decreased to 6.6% of net revenues from 10.0% of net revenues for the same period last year. Excluding the above-mentioned severance costs for both periods, operating margin was 6.9% for the thirty-nine weeks ended September 29, 2012 as compared to 10.2% for the same period last year.
- Net income was $9.5 million or $0.58 per diluted share as compared to net income of $13.6 million, or $0.85 per diluted share for the same period last year. Excluding the above-mentioned severance costs for both periods, net income was $9.9 million, or $0.61 per diluted share for the thirty-nine weeks ended September 29, 2012, as compared to net income $13.8 million, or $0.86 per diluted share for the same period last year.
- The Company opened 26 new stores and closed 4 during the first three quarters of 2012.
Tom Stoltz, Body Central's COO, CFO and interim CEO, stated: "Our third quarter results were in line with our expectations. We completed the transition from summer clearance merchandise to fall and ended the quarter with lower inventory levels on a per store basis.
“We now believe our assortment of styles are more in line with customer preferences. We also refined our test and reorder strategy by increasing the number of styles tested and raising the sell-through hurdle rates for test merchandise.
“Our new stores continue to perform well and we are on track to achieve our store opening plan for 2012. Overall, we believe that we are taking the right steps to get the Company on the path to sales and earnings recovery in 2013."
Balance Sheet highlights as of September 29, 2012:
Cash, cash equivalents and short-term investments were $36.9 million at the end of the third quarter compared to $31.7 million at the end of the third quarter in the prior year.
Inventories at the end of the third quarter were $20.9 million compared to $20.6 million at the end of the third quarter of 2011. Average store inventories decreased 8% from one year ago.
The Company had no long-term debt as of the end of the third quarter of 2012.
Outlook
For the fourth quarter of fiscal 2012, the Company expects net revenues in the range of $82 million to $84 million, comparable sales to decrease 11% to 14% and diluted earnings per share in the range of $0.19 to $0.22, based on diluted weighted-average shares outstanding of 16.4 million.
For fiscal 2012, the Company expects net revenues in the range of $312 million to $314 million, comparable sales to decrease 8% to 9% and diluted earnings per share in the range of $0.80 to $0.83, based on diluted weighted-average shares outstanding of 16.4 million. The guidance above excludes, on a pre-tax basis, the $600,000 CEO severance costs incurred in the third quarter of this year.
Founded in 1972, Body Central Corp. is a growing, multi-channel, specialty retailer offering on trend, quality apparel and accessories at value prices. As of October 31, 2012 the Company operated 267 specialty apparel stores in 24 states under the Body Central and Body Shop banners, as well as a direct business comprised of a Body Central catalog and an e-commerce website.
