99 Cents Only 1Q helped by Easter

CITY OF COMMERCE, Calif. 99 Cents Only Stores reported that net consolidated sales for the first quarter of fiscal 2010 were $332.1 million, an 8.9% increase compared to net sales of $304.9 million for the first quarter of fiscal 2009. Same-store sales for the first quarter of fiscal 2010 increased 7.2% versus the first quarter of fiscal 2009. The same-store sales for the first quarter of fiscal 2010 included the Easter selling season, whereas the Easter selling season fell in the fourth quarter of fiscal 2008.

Net income for the first quarter of fiscal 2010 increased to $9.5 million, or 14 cents per diluted share, compared to a net loss of $1.5 million, or (2 cents) per diluted share, for the first quarter of fiscal 2009.

Eric Schiffer, CEO of 99 Cents Only Stores, stated, “We believe that our long-term operational improvement initiatives recently gained significant traction. We have achieved greater gains in profitability than we expected this early in our four-year profit improvement plan, which was originally developed to extend through fiscal 2012. We believe that these gains are sustainable, and although the second quarter ending September 26th is typically our most challenging quarter, we expect further profit improvement over the long term and believe we will exceed our original annual and long-term goals for earnings before taxes set out in February 2008. We are revising our strategic plan and expect to be able to share the results of this planning process and update our long-term profit improvement plan on our third quarter conference call.”

For the second quarter of fiscal 2010, the company expects positive same-store sales in the low single digits and earnings to be approximately half that of the first quarter of fiscal 2010 due to several factors. Seasonally higher temperatures are expected to impose higher utility, transportation, and spoilage costs than were experienced in the first quarter. The first quarter also benefited from a positive Easter holiday selling season versus the year before. Additionally, minimum wage increases of 70 cents per hour in Texas and Nevada became effective July 24.