Shoe Pavilion, Inc. saw fourth quarter net sales increase 38.6% to $40.8 million from $29.5 million last year. Comparable store net sales for the quarter increased 8.6%. Sales from new and relocated stores contributed $10.9 million in the quarter. Gross profit decreased 250 basis points to 33.8% in the fourth quarter from 36.3% in the same period last year. Net income for the fourth quarter decreased 21.1% to $971,000, or 10 cents per diluted share, from net income of $1,230,000, or 16 cents per diluted share, in the prior year period.
For the full year, sales increased 28.1% to $131.3 million from $102.5 million last year. Gross profit decreased 150 basis points to 33.5% of sales, while SG&A expenses increased 20 points to 8.7%. Net income decreased 29.2% for the year to $1.9 million from $2.6 million last year. Diluted earnings per share were 21 cents this year, down from 36 cents last year.
During the quarter, the company opened nine new stores and closed one, operating 108 stores at the end of the period. In the first quarter of 2007, the company expects to open three new stores and relocate three existing stores into larger premises. For fiscal 2007, the company expects to open 20 to 25 new stores and close 5 to 7 for a net increase of 15 to 20 stores in our total store base.
The company anticipates that comparable store net sales will increase 8% to 10% in the first quarter of 2007, and that comparable store net sales will increase 4% to 5% for the fiscal year 2007. The company forecasts achieving net sales of $37 million to $39 million in the first quarter of 2007, an increase of 35% to 43% in net sales over the first quarter of 2006. For the fiscal year 2007, the company anticipates achieving net sales of $172.5 million to $180.0 million, an increase of 31% to 37% in net sales over fiscal 2006. Shoe Pavilion presently expects that in the first quarter of 2007 it will incur a net loss of two cents to three cents per diluted share and for the fiscal year 2007, anticipates that diluted earnings per share will be in the range of 19 cents to 23 cents.
