"Net sales in the Hat World Group increased 12% to approximately $79 million and same store sales declined 4%, compared to a decline of less than 1% in the first quarter last year. As expected, Hat World continued to be affected by the difficult urban market. Additionally, the quarter saw the planned transition to the new Major League Baseball on-field hat. This transition hurt sales early in the quarter, but the introduction of the new hat at the beginning of April sparked a positive sales trend that has continued into the second quarter. Based on both our positioning in the market and moderating comparisons, we expect an improving sales trend at Hat World through the balance of the year. We expect to open 100 to 105 new stores in the Hat World Group in Fiscal 2008.
"Net sales for the Underground Station Group, which includes the remaining Jarman stores, were $30 million and same store sales declined 22%. The weak urban market, ongoing softness in the athletic category and a tough Nike comparison negatively affected sales comparisons during the quarter.
We expect improvements at Underground Station in the latter part of the year, as we continue to re-merchandise the stores towards more women's and casual products, as the absence of Nike products becomes a less significant factor in the year-over-year comparisons, and as overall comparisons moderate as we mark the anniversary of the onset of the urban market downturn.
"Johnston & Murphy Group's net sales increased 5% to approximately $46 million in the first quarter. Wholesale sales rose 3%, same store sales for the shops were up 3% and operating margin increased 330 basis points to 9.7%. Johnston & Murphy's footwear line continues to gain customer acceptance. At the same time, we continue to see strength in all our non-footwear categories. Johnston & Murphy's momentum remains strong.
"First quarter sales of Licensed Brands increased 25% to approximately $24 million, after a 37% gain for the same period last year. According to The NPD Group's Retail Tracking Service, Dockers Footwear was the #1 ranked brand for men's dress casual footwear in national chains and shoe chains for the 12 months ended March 2007."
The Company also updated its guidance for the fiscal year ending February 2, 2008. It now expects to report net sales of $1.59 billion and earnings per diluted share of $2.37 to $2.40 for fiscal 2008, including charges of $0.35 related to the store closing program. The Company's fiscal 2008 guidance does not include the impact of any costs associated with the Company's review of strategic alternatives, which the Company announced.
marketing@alchempro.com
