Clothing retailer Le Château Inc has reported results for the first quarter ended April 29th 2006.
The net earnings for the quarter were $2.7 million or $0.45 per share compared to $4.6 million or $0.79 per share for the same quarter last year. The decline in net earnings was largely the result of a decrease in comparable store sales of 4.3 percent in the quarter, as compared with a 16.9 percent increase for the first quarter a year ago. Included in the first quarter expenses are approx. $535,000 of costs relating to the ongoing strategic review.
During the quarter, the company opened two new stores and expanded 12 existing locations, resulting in the addition of 37,000 square feet to the Le Château network. Sales generated by this expansion as well as other new space over the past year offset the decline in comparable store sales, resulting in total sales for the quarter of $61.2 million, or a 1.0 percent increase compared with $60.6 million for the same period last year.
Earnings before interest, income taxes, depreciation and amortization (EBITDA) were $7.4 million compared to $9.9 million for the first quarter last year.
Sales and profit figures were impacted by the closing of Junior Girl division, the rapid introduction of a major footwear department across the chain, a full corporate strategic review, and other factors which softened our focus on giving customers precisely what they want. Although the first quarter results still show impressive profits, management has dedicated significant resources on the product side to accelerate growth in sales and profits.