Net sales for the first six months of fiscal 2007 increased 2.4% to $157.1 million from $153.5 million for the comparable prior year period. Gross profit, which is net of buying and occupancy costs, increased to $51.4 million resulting in a gross margin of 32.7% for the period. Net income for the period was $8.6 million, or $0.60 per diluted share, versus $9.4 million, or $0.66 per diluted share, in the first half of fiscal 2006.
During the second quarter of fiscal 2007, Deb Shops opened four new stores and remodeled three existing locations and closed one store. As of July 31, 2006, it operated plus-size departments in 174 Deb stores.
Barry Susson, CFO of Deb Shops, added, "We believe our sales and earnings shortfall was in part attributable to the challenging economic environment brought on by energy and fuel prices that are near their all-time high as well as rising interest rates. Our target customer is the value conscious female consumer between the ages of 13 to 25."
Based on management's current outlook, Deb Shops expects its fiscal 2007 sales guidance to be in the range of $320 million to $325 million compared to its previous sales range of $325 million $330 million. It now expects diluted earnings per share for fiscal 2007 to range from $1.30 to $1.40, versus its previous expectation of $1.40 to $1.50.
Deb Shops Inc is a national specialty retailer of fashionable apparel, shoes and accessories for juniors in both regular and plus sizes. It operates 335 specialty apparel stores in 42 states under the DEB and Tops 'N Bottoms names.
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