Danier Leather announced its consolidated financial results for the fourth quarter and fiscal year ended June 27, 2015.
Article continues below
Revenue decreased by 11% or $15.9 million to $126 million in 2015 from $141.9 million in 2014. During the fourth quarter of 2015, revenue decreased by 5% or $1.2 million to $23.5 million from $24.7 million during the fourth quarter of 2014.
Comparable store sales in 2015 decreased by 14% as compared to 2014. In the fourth quarter of 2015, comparable store sales decreased by 5%.
Gross profit dollars decreased by 18% or $12.4 million to $55.8 million in 2015, compared with $68.2 million in 2014. The decrease in gross profit dollars was mainly due to an 11% decrease in sales, increased promotional activity needed to sell built-up inventory, a $0.38 million decrease in write-downs of inventory and a weakening of the Canadian dollar relative to the U.S. dollar.
For the fourth quarter of 2015, gross profit as a percentage of revenue decreased to 30.0% compared with 39.9% during the fourth quarter of 2014. The decrease in gross profit in the fourth quarter was mainly due to a 5% decrease in sales, increased promotional activity needed to sell built-up inventory, a $0.5 million increase in write-downs of inventory and a weakening of the Canadian dollar relative to the U.S. dollar.
Selling, general and administrative (SG&A) expense decreased by 5% or approximately $3.7 million to $75.3 million in 2015. In 2015, SG&A was increased by asset impairment losses, severance, and higher store occupancy costs that were offset by foreign exchange gains and cost reduction initiatives.
For the fourth quarter of 2015, SG&A of $18.1 million decreased by approximately $0.5 million compared with the fourth quarter of 2014. In the fourth quarter of 2015, SG&A declined even though asset impairment losses and strategic review fees increased over fourth quarter of 2014.
Effective income tax provision rate for 2015 was (1.1%) and (21.4%) for the fourth quarter of 2015. In 2014, the effective tax rate for 2014 and for the fourth quarter of 2014 was 29% and 28.9%, respectively. The differences in the effective tax rates are due to the $5.2 million write-down of the deferred income tax asset in the fourth quarter of 2015.
Net loss for 2015 was $19.9 million ($5.16 loss per share) compared with a net loss of $7.7 million ($2.00 loss per share) in 2014. The net loss for the fourth quarter of 2015 was $13.3 million ($3.45 loss per share) compared with $6.7 million ($1.74 loss per share) in the fourth quarter of 2014.
In addition to reduced sales and gross profit margins, a $5.2 million write-down of deferred income tax asset and $3.2 million of asset impairment losses, combined to significantly increase the Company's net loss in 2015. ■