99 Cents Only unhappy with 1Q earnings

CITY OF COMMERCE, Calif. 99 Cents Only Stores Thursday announced that for the first quarter ended June 30, diluted earnings per share were 4 cents on net income of $3 million, compared to same quarter 2006 diluted earnings per share of 3 cents on net income of $1.9 million. The increase in net income was primarily due to increased sales and continued improvements in gross margin and a discrete tax benefit, which was partially offset by increases in SG&A expense.

As previously reported, total sales for the quarter ended June 30 were $293 million. This represents an increase of 11.1% over total sales of $263.6 million for the same quarter last year. Retail sales for the quarter ended June 30 were $282.9 million, up 11.4% from retail sales of $254 million for the same quarter last year. The company's same-store sales for the first quarter ended June 30, 2007 increased 5.2% versus the same quarter last year.

Eric Schiffer, ceo, said, "Although we are reporting a slight increase in our quarter-over-quarter earnings for the third quarter in a row, we are not satisfied with these slight improvements, and we are working towards significant reductions over the long term in our operating costs as a percentage of sales as we continue to grow. We have made progress in sales effectiveness with seven consecutive quarters of increasing comparable-store sales. Additionally, we improved our gross margin for the last three quarters in a row. We intend to keep our focus on cost reductions, effectively getting the right product on the shelf at the right time by improving merchandise flow and enhancing our labor productivity in all areas of operations."