Eddie Bauer Holdings, Inc. reported first quarter revenues increased 10% to $214 million from $194.5 million.
Comparable store sales for the first quarter increased by 9.5%, and sales in the direct channel increased 16.3%. Gross margins rose to 29.3%, up from 26.9%, due primarily to a decrease in occupancy costs as a percentage of net merchandise sales. Selling, general and administrative expenses grew to 52.2 percent from 47.4 percent. Net losses widened to $44.8 million from $35.6 million a year ago.
The net loss in the latest period includes nonrecurring expenses totaling approximately $16.4 million, including a previously announced $5 million merger termination fee and $1.4 million in legal fees and expenses related to the company's proposed sale to an affiliate of Sun Capital Partners and Golden Gate Capital. Also included were $8.4 million of expenses, including costs tied to the resignation of the company's former CEO and a $1.6 million legal settlement. Exclusive of these nonrecurring expenses, the EBITDA loss was $9.4 million against a loss of $25.8 million.
“Customers have responded positively to our refocused merchandise assortment, which is more in line with the needs and preferences of our core customers and capitalizes on our brand's unique outdoor heritage,” said Howard Gross, interim chief executive officer of Eddie Bauer. “Our strategy is to continue to refine and enhance our product line in order to drive comparable store sales growth in both our retail and direct channels, and we are encouraged that the initial changes we have been making appear to be resonating with consumers.”
As of March 31, the company operated 367 retail and outlet stores consisting of 251 retail stores and 116 outlet stores. During the first quarter, the Company opened one retail store and two outlet stores and closed 29 retail stores and one outlet store.
