Goody's Family Clothing, Inc. reported net earnings of $7.1 million, or $0.21 per diluted share, for the thirteen weeks ended August 2, 2003, compared with net earnings of $1.3 million, or $0.04 per diluted share, for the thirteen weeks ended August 3, 2002. Net earnings for the thirteen weeks ended August 2, 2003, include a pretax credit of $4.4 million ($0.08 per diluted share after taxes) related to the previously reported settlements of the Hilfiger litigation. Sales for the second quarter of fiscal 2003 increased 3.5% to $294.0 million compared with $284.0 million during the same period last year. Comparable store sales for the second quarter of fiscal 2003 increased 2.3% from the same period last year.
For the twenty-six weeks ended August 2, 2003, net earnings were $9.0 million, or $0.27 per diluted share, compared with net earnings of $6.8 million, or $0.21 per diluted share, for the twenty-six weeks ended August 3, 2002. Net earnings for the twenty-six weeks ended August 2, 2003, include a pretax charge of $3.6 million ($0.07 per diluted share after taxes) related to the previously reported settlements of the Hilfiger litigation. Sales for the first six months of fiscal 2003 increased 1.7% to $577.0 million compared with $567.5 million during the same period last year. Comparable store sales for the first six months of fiscal 2003 increased 1.6% from the same period last year.
Robert M. Goodfriend, Chairman and Chief Executive Officer, commented, “I am pleased with the continuation of the strong operating results through the second quarter of fiscal 2003. For the second quarter and first half of fiscal 2003, sales and gross profits increased, while higher sales enabled us to leverage our selling, general and administrative expense rate. The Company ended the second quarter of fiscal 2003 with more than $92 million in cash and cash equivalents, no direct borrowings on our line of credit, and no long-term debt. I believe that the hard work of all our Goody's associates is beginning to pay off with more acceptable operating results. As we continue to celebrate our Company's 50th year of operations, we remain wholly focused on providing both our shoppers and our shareholders with the greatest possible value.”
Fiscal year-to-date, the Company has opened five new stores, relocated or remodeled ten stores and closed one store. For the balance of the fiscal year, the Company expects to open five additional new stores, relocate or remodel up to four existing stores, and close two stores.
As part of its continuing efforts to improve operating efficiencies and customer service, the Company will move up the installation of new radio frequency scanning equipment in all stores targeted to be completed by the end of fiscal 2003. As a result, capital expenditures for fiscal 2003 are now expected to be approximately $26.0 million, up from $22.0 million previously budgeted.
For fiscal 2004, the Company anticipates that it will open 20 to 25 new stores and relocate or remodel up to 25 existing stores. Additionally, the Company expects to install new point-of-sale equipment in all stores during fiscal 2004. Capital expenditures for fiscal 2004 are anticipated to be in the range of $50.0 million.
GOODY'S FAMILY CLOTHING, INC. Unaudited Consolidated Statements of Operations (In thousands, except per share amounts) 13 Weeks Ended 26 Weeks Ended August 2, August 3, August 2, August 3, 2003 2002 2003 2002 Sales $294,039 $284,046 $577,051 $567,549 Cost of sales and occupancy expenses 208,096 205,155 405,292 404,201 Gross profit 85,943 78,891 171,759 163,348 Selling, general and administrative expenses 74,862 77,026 157,896 152,672 Earnings from operations 11,081 1,865 13,863 10,676 Investment income 204 153 381 257 Interest expense -- 4 1 5 Earnings before income taxes 11,285 2,014 14,243 10,928 Provision for income taxes 4,175 755 5,270 4,098 Net earnings $ 7,110 $ 1,259 $ 8,973 $ 6,830 Earnings per common share: Basic $ 0.22 $ 0.04 $ 0.28 $ 0.21 Diluted $ 0.21 $ 0.04 $ 0.27 $ 0.21