Bakers Footwear Group, Inc. reported net sales were $44.3 million in the first quarter ended April 28, a decrease of 5.7 percent, from $47.0 million in the first quarter of fiscal 2011. Comparable store sales decreased 2.7 percent compared to an increase of 9.3 percent in the first quarter of fiscal 2011.
For the first quarter, the thirteen weeks ended April 28, 2012:
Gross profit was $12.6 million, or 28.4 percent of net sales, compared to $12.3 million, or 26.1 percent of net sales, in the first quarter last year. The increase in gross profit margin primarily resulted from a $1.0 million reduction of occupancy costs, including the reversal of $0.7 million in accrued noncurrent rent liabilities relating to the sale of a store lease. Gross margin also benefited from lower markdowns in the quarter;
Selling, general and administrative expenses were $13.4 million, or 30.2 percent of net sales, compared to $14.3 million, or 30.5 percent of net sales, in the prior-year period;
Gain on disposition of property and equipment was $0.2 million in the quarter related to the sale of a store lease;
Operating loss was $610,000 compared to an operating loss of $2.1 million in the first quarter last year; and
Net loss was $1.1 million, or $0.11 per share, compared to a net loss of $2.5 million, or $0.27 per share, in the first quarter last year.
Peter Edison, Chairman and Chief Executive Officer of Bakers Footwear Group commented, “Our first quarter performance reflects our strategy to reduce inventories while delivering a steady flow of fashion right assortments. This, combined with our cost containment initiatives, drove a significant narrowing in our operating loss in the quarter from the first quarter last year.”
“As we look ahead, we continue to expect our strategies to result in improved gross margin and operating performance in 2012 as we prudently manage inventory and focus on turns,” Mr. Edison continued. “We expect this effort along with our cost reduction programs will improve our operating results, liquidity and financial position.”
New Credit Facility
Separately, the Company announced that it has entered into a new $30.0 million credit facility with Crystal Financial LLC which replaces its existing credit facility with Bank of America. The new facility has a term of four years, increases the Company’s availability and carries a higher interest rate compared to the previous facility. The Company will file a Form 8-K describing the new credit facility in greater detail.
Edison continued, “On June 13, 2012, we entered into a new four year, $30 million credit facility with Crystal Financial LLC replacing our facility with Bank of America. The team at Crystal Financial has been a long term partner of our Company and we are delighted to have entered into this new credit agreement, which enhances our financial flexibility as we lengthen the maturity by three years and increase the availability under the facility by several million dollars.”
The Company’s business plan is based on mid-single digit decreases in comparable store sales in the second quarter and mid-single digit increases in comparable store sales for the second half of fiscal year 2012. Comparable store sales for fiscal year 2012 through June 9, 2012 have decreased 4.8%. Based on the Company's business plan, including the anticipated impact of the margin improvement and cost reduction program, the Company believes it has adequate liquidity to fund anticipated working capital requirements and expects to be in compliance with its financial covenants throughout 2012.
