Gordmans gains momentum ahead of holidays

Gordmans Stores ended its same-store sales dry spell and successfully launched an e-commerce site in the third quarter, leaving CEO Andy Hall upbeat about the company’s prospects.



Gordmans, operator of 102 off price department stores, said same-store sales increased 0.8% and total sales increased 4.9% to $153.9 million in the third quarter ended Oct. 31. The company also noted that gross margin improved 50 basis points to 44.4% due to reduced markdown activity.



Despite the positives, a net loss of $2.8 million, or 14 cents a share, was worse than a prior year loss of $1.9 million, or 10 cents a share. The loss was driven by increased expenses related to advertising, e-commerce, two new stores in Bismark, North Dakota, and Cincinnati, closure of a store in Chicago and depreciation.



“The merchandise and marketing initiatives that we've implemented over the past year are resonating with our customers, driving improvements in both units per transaction and transaction value,” said Gordmans president and CEO Andy Hall. “With the successful launch of our e-commerce platform in August, we are now able to bring our unique everyday value priced concept to a much broader audience. We are optimistic that we can maintain our positive momentum in the fourth quarter despite the warm start to November and a tougher sales comparison with a year ago. Looking further ahead, we believe our current growth strategies have us on track towards delivering enhanced profitability and greater shareholder value over the long-term."



In the short term, Hall said inventories are in good shape to begin the fourth quarter and the company is forecasting same store sales growth in the range of flat to up 2%, compared to a prior year decline of 2.7%. In terms of profit, earnings per share in the range of 12 cents to 16 cents are expected to be marginally better than the 12 cents a share the company earning in the fourth quarter the prior year.