Casual Male Retail Group, Inc. , the largest retailer of big & tall men's apparel and accessories, today reported operating results for the first quarter of fiscal 2012.
First Quarter Highlights (1QFY12 vs. 1QFY11)
· Comparable sales increased 2.0% and total sales increased $0.1 million to $95.9 million.
· Gross margin increased 80 basis points (90 basis points in merchandise margin offset by an increase of 10 basis points in occupancy expense) to 47.7% as compared to 46.9% for the prior year.
· Effective tax rate of 40.4% as compared to 10.1% for the first quarter of fiscal 2011 as a result of the reversal of the Company's valuation allowance in fiscal 2011.
· Net income of $2.3 million, or $0.05 per diluted share, compared to net income of $4.2 million, or $0.09 per diluted share for the first quarter of fiscal 2011. On a comparable basis, assuming a normal tax rate for the first quarter of fiscal 2011, adjusted earnings per diluted share would have been $0.06 per diluted share for the first quarter of fiscal 2011 compared to $0.05 per diluted share this quarter. See Non-GAAP Measures and related table below for a complete reconciliation of non-GAAP adjusted earnings per share.
During the first quarter of fiscal 2012, the Company opened six DestinationXL® ("DXL®") stores, for a total of 22 DXL stores. Twenty of these stores are considered "comparable stores" and had a combined comparable sales increase of 16.3% for the first quarter of fiscal 2012 when compared to the first quarter of the prior year. The Company plans to open a total of 35 stores in fiscal 2012 resulting in approximately 51 DXL stores operating at the end of the fiscal year, with at least one store located in most major metropolitan cities across the United States.
Similar to the DXL stores, the Company sees significant opportunities in the growth of its direct business by combining all of its existing e-commerce sites into one enhanced website, with state-of-the-art features and best practices. The Company recognizes the importance of "name recognition" in growing an effective DXL business, both in retail stores and direct. One of the Company's key objectives for fiscal 2012 is to increase traffic in both stores and direct. We expect to accomplish this objective by creating more awareness of the DestinationXL brand through the development of effective outreach programs and targeted marketing initiatives using local media as well as digital marketing. In the first quarter, we retained a professional advertising agency to develop a DestinationXL brand strategy and a campaign for a more effective and comprehensive approach to expanding our market share.