99 Cents Only posts a steep profit loss

The CEO of 99 Cents Only Stores Inc. says he's confident that the company's core business strategy remains strong despite a sharpdrop in net income in the first quarter.

Net profit at 99 Cents Only Stores Inc. declined 88% to $1.17 billion in the first quarter ended May 1 from $9.57 billion the same quarter the prior fiscal year.The profit plummet came as total sales rose 6% to $506.17 million from $477.9 million. Same-store sales declined 1.7%, primarily due to lower customer traffic.

"While we are disappointed with the financial results of this past quarter, we remain confident that the core business strategy of99 CentsOnly Stores remains strong,” said Andrew Giancamilli, president and CEO.“During the past 18 months, we have undertaken some aggressive growth initiatives – including expanding our store network, enhancing our overall product offering, upgrading back office functions of the business by investing in technology and human capital, and the opening of new distribution centers. Now, the company is focused on operational execution.”

During the first quarter of fiscal 2016, the company opened three net new stores. As of the end of the first quarter of fiscal 2016, the company operated 386 stores, an increase of 11.6% in store count over the same period last year. Total net selling square footage was 6.2 million as of the end of first quarter of fiscal 2016, an increase of 9.7% over the same period last year.