• Gross profit, as a percent of sales, increased 66 basis points compared to last year's first quarter result. Sales leverage on fixed costs in buying and occupancy expenses primarily contributed to gross profit rate expansion, along with improved merchandise margin across categories.
• Selling, general and administrative expenses as a percent to sales decreased 32 basis points versus the prior year. Overall, fixed expenses during the first quarter performed in-line with plans. In addition, the company recorded one-time expenses of approximately $4 million over plan related to the launch of our new fashion rewards program.
Existing credit customers whose 2006 purchases in our stores qualified them for upper-tier level status have been granted reward benefits that they may redeem immediately. These expenses impacted the SG&A rate for the first quarter by 20 basis points and earnings per diluted share by $0.01.
The company recently announced its plans to open a new Nordstrom store at University Town Center in Sarasota, Fla. The two-level store will be 138,000 square feet and is scheduled to open in fall 2010.
Also, the company recently announced plans to open a 35,000-square-foot Rack store at Park Lane in Dallas. The Park Lane Rack will be the company's third Rack store in Texas and is scheduled to open in fall 2008.
For the fiscal year ending February 2, 2008, the company anticipates earnings per diluted share in the range of $2.81 to $2.90, increased from the previous range of $2.78 to $2.84.
Our outlook includes consideration for the effects of the timing shift in the 2007 4-5-4 calendar, the company's securitization transaction backed by the co-branded Visa and private label receivables, and other non-comparable items.
Outlined in the table below are the anticipated relative effects on diluted earnings per share from non- comparable items expected for the remaining quarters of the 2007 fiscal year.
marketing@alchempro.com
