Year-to-date sales decreased 18.3% to $101.2 million compared to $123.8 million for the same period last year. Comparable store sales for the six-month period decreased 17.2% compared to a decrease of 13.0% for the same period last year.
The net loss in the first half of 2007 was $50.6 million, or $1.72 per basic and diluted share. The total impact of the June 2007 equity financing adjustments to that reported net loss for the first half of 2007 was $16.8 million, or $0.43 per basic and diluted share.
The basic and diluted loss per share for the first half of 2007, excluding the financing adjustments, was $1.29 and compares to a net loss of $31.0 million, or $0.79 per basic and diluted share, in the first half of 2006.
A reconciliation of the U.S. generally accepted accounting principles (“GAAP”) loss available to common shareholders and loss per basic and diluted share for the 2007 periods with and without the impact related to the June 2007 equity financing appears in an accompanying table.
GAAP loss available to common shareholders and loss per basic and diluted share, excluding the financing adjustments, are measures of performance that are not defined by GAAP and should be viewed in addition to, and not in lieu of, GAAP loss available to common shareholders and loss per basic and diluted share as reported on a GAAP basis. We believe that this non-GAAP disclosure provides meaningful information regarding our ongoing operations as compared to prior periods.
Michael Searles, Chief Executive Officer, commented, “Our poor second quarter performance is reflective of the significant transition that is underway in our mall stores. While soft sales impacted our margin dollars to some extent, we also took extensive markdowns during the quarter in order to liquidate and reposition our inventory.
"In order to make room for our new designer brand outerwear, these markdowns were necessary to reduce “non-go-forward” inventory–including carry-over styles from prior years. Our goal is to increase our inventory turnover and to keep our stores always looking fresh. As a result of our extensive markdowns, gross margin during the quarter was negative $2.4 million compared to a positive margin last year of $1.9 million.”
Mr. Searles continued, “Dollars per transaction in our mall stores are up 17.7% year-over-year. We just have not had enough new customers to offset the ones who have left us. Our branded product offering is designed to help recapture some of those customers who have left us. Our new product launch begins this week.”
Wilsons The Leather Experts Inc
marketing@alchempro.com
