Canadian brand Le Château reported that sales for the first quarter ended April 30, 2016 amounted to $48.6 million as compared with $50.7 million for Q1 2015, a decrease of 4.2%, with 16 fewer stores in operation.
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Comparable store sales decreased 1.9% for the first quarter as compared to last year (see non-GAAP measures below). Included in comparable store sales are online sales which increased 53.9% for the first quarter.
Earnings (loss) before interest, income taxes, depreciation, amortization, write-off and/or impairment of property and equipment (Adjusted EBITDA) amounted to $(9.1) million, compared to $(7.1) million for the same period last year.
The decrease of $2.0 million in adjusted EBITDA for the first quarter was primarily attributable to the decrease of $2.2 million in gross margin dollars offset by the reduction of $194,000 in selling, general and administrative (SG&A) expenses.
The decrease of $2.2 million gross margin dollars was the result of the decline in gross margin percentage to 62.6% from 64.3% in 2015 due to increased promotional activity primarily in the outlet stores where prior season discounted merchandise is being offered, combined with the 4.2% overall sales decline for the first quarter.
As for the regular stores, the gross margin percentage remained relatively stable when compared with the same period last year, despite the pressure of the weaker Canadian dollar on merchandise purchased.
Net loss for the first quarter ended April 30, 2016 amounted to $14.3 million or $(0.48) per share compared to a net loss of $12.4 million or $(0.41) per share for the same period last year.
During the first quarter of 2016, the Company renovated one existing location and, as planned, closed five underperforming stores. As at April 30, 2016, the Company operated 206 stores (including 62 fashion outlet stores) compared to 222 stores (including 42 fashion outlet stores) as at May 2, 2015.
Total square footage for the Le Château network as at April 30, 2016 amounted to 1,136,000 square feet (including 478,000 square feet for fashion outlet stores), compared to 1,216,000 square feet (including 465,000 square feet for fashion outlet stores) as at May 2, 2015.
Second quarter of 2016
For the first five weeks ended June 4, 2016, total retail sales decreased 4.7%, with 16 fewer stores in operation, and comparable store sales decreased 0.4% compared to the same period last year. Included in comparable store sales are online sales which increased 69.0%. ■