Reports Flat Comparable Store Sales and Historically High Gross Margin for the Fourth Quarter
Reports Net Income of
“We are pleased with the progress we made in 2015. Improvements in our merchandise assortment and presentation helped us deliver flat comparable store sales and historically high gross margins,” commented
Fourth Quarter Overview
- For the thirteen weeks ended
January 30, 2016(“Fourth Quarter”), the Company reported net income of $9.9 million, or $0.32per diluted share as compared to a net income of $11.7 million, or $0.37per diluted share, for the same period last year.
- Comparable store sales for the Fourth Quarter were flat compared to the same quarter last year. Total sales for the Fourth Quarter decreased 4.4% to
$121.3 millioncompared to $126.9 millionin 2014. At the end of the year, the Company operated 299 stores compared to 310 stores last year, a decline of 3.5%.
- Gross profit for the Fourth Quarter was
$45.9 million, or 37.9% of sales, as compared to $46.6 million, or 36.7%, of sales for the fourth quarter last year. The increase in gross profit as a percentage of sales was primarily due to increased margin rate in the majority of our categories and the contribution shift to the higher margin trend category.
- Selling, general and administrative expenses (“SG&A expenses”) increased 3.6% for the Fourth Quarter to
$34.3 million, or 28.2% of sales, compared to $33.1 million, or 26.0% of sales for the same period last year. The increase in SG&A expenses for the quarter was due to higher annual employee incentives.
- During the Fourth Quarter, the Company repurchased 121,957 shares of common stock at an average price of
$3.58per share. Since the inception of the program, the Company has repurchased 1,872,043 shares of common stock at an average price of $3.82per share. The Company has approximately $14.8 millionavailable for purchase under its repurchase program
Fiscal 2015 Overview
- The Company reported a 51% increase in net income to
$2.7 million, or $0.09per diluted share, from $1.8 million, or $0.06per diluted share for the 52 weeks ended January 31, 2015(“Fiscal 2014”). As previously reported, operating results included a one-time reimbursement of expenses incurred in prior years related to a legal settlement of $1.4 millionrecorded in the second quarter.
- Comparable store sales for the year declined 0.7%. Total sales decreased 6.6% to
$334.7 millioncompared to $358.5 millionin Fiscal 2014.
- Gross profit was
$130.6 million, or 39.0% of sales, compared to $135.9 million, or 37.9% of sales, for Fiscal 2014.
- SG&A expenses decreased 5.4% to
$121.3 millioncompared to $128.2 millionin Fiscal 2014. As a percentage of sales, SG&A expenses were 36.3% in Fiscal 2015 compared to 35.8% in Fiscal 2014.
- Operating income for the year increased 21% to
$4.6 millionas compared to $3.8 millionin Fiscal 2014.
- During Fiscal 2015, the Company opened six and remodeled four stores under a new format.
Certain statements in this release set forth management’s intentions, plans, beliefs, expectations or predictions of the future based on current facts and analyses. Actual results may differ materially from those indicated in such statements. Additional information on factors that may affect the business and financial results of the Company can be found in filings of the Company with the
— table to follow —
|TRANS WORLD ENTERTAINMENT CORPORATION|
|STATEMENTS OF OPERATIONS:|
|(in thousands, except per share data)|
|Thirteen Weeks Ended||Fiscal Year Ended|
|January 30,||% to||January 31,||% to||January 30,||% to||January 31,||% to|
|Cost of sales||75,390||62.1||%||80,350||63.3||%||204,088||61.0||%||222,572||62.1||%|
|Selling, general and|
|Depreciation and amortization||1,429||1.2||%||1,313||1.0||%||4,668||1.3||%||3,906||1.1||%|
|Income from operations||10,248||8.4||%||12,189||9.6||%||4,571||1.4||%||3,775||1.1||%|
|Interest expense, net||332||0.3||%||452||0.4||%||1,699||0.5||%||1,881||0.5||%|
|Income before income taxes||9,916||8.2||%||11,737||9.2||%||2,872||0.9||%||1,894||0.5||%|
|Income tax expense||48||0.0||%||–||0.0||%||181||0.1||%||116||0.0||%|
|Basic income per common share:|
|Basic income per share||$||0.32||$||0.37||$||0.09||$||0.06|
|Weighted average number of|
|common shares outstanding – basic||31,098||31,431||31,167||31,744|
|Diluted income per common share:|
|Diluted income per share||$||0.32||$||0.37||$||0.09||$||0.06|
|Weighted average number of|
|common shares outstanding – diluted||31,249||31,542||31,323||31,897|
|SELECTED BALANCE SHEET CAPTIONS:||January 30,||January 31,|
|(in thousands, except store data)||2016||2015|
|Cash and cash equivalents||$||104,311||$||118,537|
|Fixed assets (net)||30,665||15,769|
|Borrowings under line of credit||–||–|
|Long-term capital lease obligations, less current portion||–||–|
|Stores in operation, end of period||299||310|
|Stores in operation, average during the period||309||329|
Trans World Entertainment John AndersonChief Financial Officer (518) 452-1242 Contact: Financial Relations Board Marilynn Meek() (212) 827-3773