Shoe Pavilion reported net income of $24,000 or $0.00 per share for the third quarter ended October 2, 2004, compared to a net loss of $1.2 million or ($0.18) per share for the third quarter of 2003. Net income for the nine months ended October 2, 2004 was $1.1 million or
$0.16 per share, compared to a net loss of $2.8 million or ($0.40) per share for the same period in 2003. The results for the third quarter and nine month periods ended October 2, 2004 include the reversal of $258,000 before taxes of a reserve recorded in the fourth quarter of 2003 for costs associated with the settlement of a wage and hour
lawsuit.
Net sales decreased 4.2% to $20.7 million for the third quarter
ended October 2, 2004, from net sales of $21.6 million for the same
period in 2003. Net sales for the nine months ended October 2, 2004
were $61.0 million, a 0.6 % decrease from net sales of $61.3 million
for the nine months ended September 27, 2003.
Comparable store net sales decreased 6.3 % for the third quarter
ended October 2, 2004 from the same period last year and increased 0.1
% for the nine months ended October 2, 2004 from the same period last
year.
As previously reported on October 7, 2004, the decline in
comparable store sales during the third quarter was due in part to the
reduction in advertising in the third quarter of 2004 as compared to
the same period in 2003. In the third quarter ended October 2, 2004,
advertising as a percentage of net sales was 5.8% compared to 10.9%
for the same period last year, a reduction of approximately $1.1
million. The Company also indicated on October 7, 2004 that although
comparable store net sales increased 4.7% in the third quarter of
2003, this increase was below the Company's expectations given the
amount of money committed to advertising during the third quarter of
2003. Based upon these results in the third quarter of 2003 the
Company reduced its advertising in the third quarter of 2004 as it
continues to focus on profitability.
The Company reported that inventory at October 2, 2004 was
approximately $37.0 million, an increase of approximately $10.0
million from January 3, 2004. The Company stated that the inventory
growth is in line with its seasonal expectations, is the result of the
recent opening of new stores, and the timing of inventory receipts in
anticipation of the holiday season.
During the quarter ended October 2, 2004 the Company opened three
stores in Arizona and closed two stores for which the leases had
expired. Since the end of the quarter the Company opened two stores,
bringing the total number of stores the Company operates to 86. The
Company plans to open five to ten new stores in 2005.
Shoe Pavilion, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)(In thousands, except per share amounts and number of stores)
Thirteen weeks Thirty-nine weeks
ended ended
------------------- -------------------Oct. 2, Sept. 27, Oct. 2, Sept. 27,
2004 2003 2004 2003Net sales $20,672 $21,581 $60,974 $61,326
Cost of sales and related
occupancy expenses 13,948 15,444 40,279 44,820
--------- --------- --------- ---------
Gross profit 6,724 6,137 20,695 16,506
Selling, general and
administrative expenses 6,591 8,077 18,680 20,878
--------- --------- --------- ---------
Income (loss) from
operations 133 (1,940) 2,015 (4,372)
Interest expense (102) (66) (244) (215)
Other income 10 - 10 -
--------- --------- --------- ---------
Income (loss) before taxes 41 (2,006) 1,781 (4,587)
Income tax benefit (expense) (17) 803 (711) 1,835
--------- --------- --------- ---------
Net income (loss) $24 ($1,203) $1,070 ($2,752)
========= ========= ========= =========Earnings (loss) per share:
Basic $0.00 $(0.18) $0.16 $(0.40)
Diluted $0.00 $(0.18) $0.16 $(0.40)Weighted average shares
outstanding:
Basic 6,800 6,800 6,800 6,800
Diluted 6,966 6,800 6,886 6,800Stores operated at end of
period 84 84
