Bakers Footwear Group, Inc. (Nasdaq: BKRS), a leading specialty
retailer of moderately priced fashion footwear for young women,
today announced results for the thirteen and twenty-six weeks ended
July 29, 2006. For the second quarter, the thirteen weeks ended
July 29, 2006: -- Net sales increased 4.3%, to $47.2 million from
$45.3 million for the thirteen weeks ended July 30, 2005.
Comparable store sales decreased 6.4% compared to a 12.7% increase
last year; -- Operating loss was $1.5 million, a decrease of $3.5
million from operating income of $2.0 million, in the same period a
year ago; -- Net loss was $1.0 million, or $(0.16) per share, as
compared to net income of $1.2 million, or $0.19 per diluted share
in the second quarter of 2005; and -- As a result of adopting FAS
123R, the Company recognized $0.02 per share related to stock based
compensation expense in the second quarter of 2006. The Company
recognized no stock-based compensation expense in the second
quarter of 2005. "We were disappointed with our second quarter
results, which were affected by challenging sandal sales, a
significant product category that gains importance during the
spring and summer seasons. This led to lower than expected sales
and higher markdowns during the quarter, as we cleared seasonal
inventory. On a positive note, since introducing our fall line in
mid-August, our sales have improved and we are very pleased with
the performance of our fall product." Additionally, during the
second quarter, the Company: -- Opened 4 new stores and at
quarter-end operated 247 stores in 38 states; and -- Remodeled 4
stores and at quarter-end operated 143 stores, or 65% of its Bakers
stores in the new store format; Gross profit in the second quarter
was $13.5 million, or 28.6% of net sales, compared to $15.0
million, or 33.1% of net sales, in the second quarter of fiscal
2005. Operating expenses were $15.0 million, or 31.8% of net sales
compared to $13.0 million, or 28.7% of net sales in the second
quarter of fiscal 2005. For the first half of fiscal 2006, the
twenty-six weeks ended July 29, 2006: -- Net sales increased 7.5%,
to $97.0 million from $90.2 million for the twenty-six weeks ended
July 30, 2005. Comparable store sales decreased 3.6% compared to a
10.1% increase last year; -- Operating loss was $0.3 million, as
compared to operating income of $5.1 million, in the same period a
year ago; -- Net loss was $0.4 million or $(0.06) per share, as
compared to net income of $3.1 million, or $0.51 per diluted share
in the second half of 2005. -- As a result of adopting FAS 123R,
the Company recognized $0.04 per share related to stock based
compensation expense in the first half of fiscal 2006. The Company
recognized no stock-based compensation expense in the first half of
fiscal 2005. Gross profit in the first half of fiscal 2006 was
$29.8 million, or 30.7% of net sales, compared to $30.4 million, or
33.7% of net sales, in the first half of fiscal 2005. Operating
expenses were $30.1 million, or 31.0% of net sales compared to
$25.3 million, or 28.1% of net sales in the first half of fiscal
2005. Michele Bergerac, President of Bakers Footwear, said, "As a
fashion footwear retailer, the disappointing performance in the
sandal category of our business had a significant impact on our
spring and summer sales. However, we are very optimistic about the
fall season having identified several new fashion trends such as
platforms, round toe pumps and peep toe shoes, as well as a variety
of boot styles that we believe will enable us to improve our sales
performance during the balance of the year. We also remain on track
to open 33 or 34 stores this year and remodel approximately 15
stores to our new formats." Mr. Edison continued: "As we move into
the second half of the year, we are encouraged about the fall
season. We remain confident that our initiatives in merchandising
and marketing, combined with our new store expansion have us poised
for long term sales and earnings growth." Following the end of the
quarter the Company announced that it had amended its credit
facility with Bank of America increasing the maximum credit limit
to $40 million from $25 million and extended the maturity by two
years to August 31, 2010. Commenting on the announcement, Mr.
Edison stated, "We are pleased to have amended the credit
agreement, as it provides us with increased financial flexibility
and lengthens the maturity on our short term debt by two years.
This agreement is a reflection of our growth to date and better
positions us to capitalize on the expansion opportunities that
exist for our Company." Conference Call The Company announced that
it will conduct a conference call to discuss its second quarter and
first six month of fiscal 2006 results today, Friday, September 8,
2006 at 9:00 a.m. Eastern Time. Investors and analysts interested
in participating in the call are invited to dial (800) 811-0667,
approximately five minutes prior to the start of the call. The
conference call will also be web-cast live at
http://viavid.net/dce.aspx?sid=00003511. A replay of this call will
be available until September 15, 2006 and can be accessed by
dialing (888) 203-1112 and entering code 6180454. The web-cast will
be available until October 8, 2006 at the same web address. About
Bakers Footwear Group, Inc. Bakers Footwear Group is a national,
mall-based, specialty retailer of distinctive footwear and
accessories for young women. The Company's merchandise includes
private label and national brand dress, casual and sport shoes,
boots, sandals and accessories. The Company currently operates more
than 240 stores nationwide under two formats, Bakers and Wild Pair.
Bakers stores focus on women between the ages of 16 and 35. Wild
Pair stores offer fashion-forward footwear to both women and men
between the ages of 17 and 29. THIS PRESS RELEASE CONTAINS
FORWARD-LOOKING STATEMENTS (WITHIN THE MEANING OF SECTION 27(A) OF
THE SECURITIES ACT OF 1933 AND SECTION 21(E) OF THE SECURITIES
EXCHANGE ACT OF 1934). BAKERS FOOTWEAR HAS NO DUTY TO UPDATE SUCH
STATEMENTS. ACTUAL FUTURE EVENTS AND CIRCUMSTANCES COULD DIFFER
MATERIALLY FROM THOSE SET FORTH IN THIS STATEMENT DUE TO VARIOUS
FACTORS. FACTORS THAT COULD CAUSE THESE CONDITIONS NOT TO BE
SATISFIED INCLUDE MATERIAL CHANGES IN CAPITAL MARKET CONDITIONS OR
IN BAKERS FOOTWEAR'S BUSINESS, PROSPECTS, RESULTS OF OPERATIONS OR
FINANCIAL CONDITION AND OTHER RISKS AND UNCERTAINTIES, INCLUDING
THOSE DETAILED IN BAKERS FOOTWEAR'S FILINGS WITH THE SECURITIES AND
EXCHANGE COMMISSION. -0- *T BAKERS FOOTWEAR GROUP, INC. Twenty-
Twenty- Thirteen Thirteen six six Weeks Weeks Weeks Weeks Income
Statement Data Ended Ended Ended Ended July 29, July 30, July 29,
July 30, 2006 2005 2006 2005
---------------------------------------- --------- ---------
--------- (in thousands except per Unaudited Unaudited Unaudited
Unaudited share data) Net sales $47,185 $45,255 $96,989 $90,199
Cost of merchandise sold, occupancy, and buying expenses 33,674
30,272 67,181 59,809 --------- --------- --------- --------- Gross
profit 13,511 14,983 29,808 30,390 Operating expenses: Selling
10,675 9,127 21,074 17,754 General and administrative 4,198 3,792
8,896 7,349 Loss on disposal of property and equipment 113 58 128
198 --------- --------- --------- --------- Operating income (loss)
(1,475) 2,006 (290) 5,089 Other income (expense): Interest expense
(184) (87) (297) (213) Other, net 11 66 34 102 --------- ---------
--------- --------- Income (loss) before income taxes (1,648) 1,985
(553) 4,978 Provision for (benefit from) income taxes (622) 762
(195) 1,903 --------- --------- --------- --------- Net income
(loss) $(1,026) $1,223 $(358) $3,075 ========= ========= =========
========= Basic earnings (loss) per share $(0.16) $0.20 $(0.06)
$0.54 ========= ========= ========= ========= Diluted earnings
(loss) per share $(0.16) $0.19 $(0.06) $0.51 ========= =========
========= ========= Weighted average shares outstanding Basic 6,493
6,146 6,413 5,745 Diluted 6,493 6,384 6,413 5,990 Cash Flow Data
Cash provided by (used in) operating activities $(2,326) $4,458
Cash used in investing activities (10,719) (10,664) Cash provided
by financing activities 9,312 7,172 Supplemental Data Comparable
store sales increase (decrease) (6.4%) 12.7% (3.6%) 10.1% Gross
profit percentage 28.6% 33.1% 30.7% 33.7% Number of stores at end
of period 247 225 July 29, July 30, Balance Sheet Data 2006 2005
-------------------------------------------------- ---------
--------- Unaudited Unaudited Cash $192 $2,397 Accounts receivable
2,138 2,044 Inventories 26,268 21,530 Other current assets 3,135
3,835 --------- --------- Current assets 31,733 29,806 Property and
equipment, net 45,773 29,862 Other assets 1,386 528 ---------
--------- $78,892 $60,196 ========= ========= Current liabilities
$28,959 $18,107 Noncurrent liabilities 7,884 6,026 Shareholders'
equity 42,049 36,063 --------- --------- $78,892 $60,196 =========
========= *T
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