ABILENE, Kan., Sept. 9, 2010 (GLOBE NEWSWIRE) -- Duckwall-ALCO Stores, Inc. (Nasdaq:DUCK), which specializes in providing a superior selection of essential products for everyday life in small-town America, today announced operating results for its second quarter ended August 1, 2010.
Net sales from continuing operations for the second quarter of fiscal 2011 decreased 5.5% to $118.2 million, and same-store sales decreased 7.2%. Net sales from continuing operations for the first half of fiscal 2011 decreased 3.8% to $231.2 million, and same-store sales decreased 5.1%.
Net loss for the second quarter was $1.3 million, or $0.34 per diluted share, compared to net earnings of $3.0 million, or $0.78 per diluted share, for the second quarter of the fiscal 2010. Net loss for the first half of fiscal 2011 was $3.2 million, or $0.85 per diluted share, compared to net earnings of $3.0 million, or $0.77 per diluted share, for the same period of the prior fiscal year.
Richard Wilson, President and CEO, commented, "Second-quarter results were negatively impacted by a same-store sales decline of 7.2%, which resulted from inadequate inventory levels in key seasonal departments. Due to lower sales, gross margin contribution was lower by approximately $2.9 million. SG&A expense increased approximately $1.7 million as a result of higher than anticipated insurance costs, severance and legal fees. We achieved savings in advertising of $132,000, store maintenance expense of $318,000, and accounting fees of $131,000.
"Clearly, we must deliver improved results. The management team and I are working quickly to improve top-line sales and profitability. Business is stabilizing as inventory levels are now sufficient to achieve our sales objectives. We are also encouraged by our previously announced August same-store sales trend, reflecting a significant improvement over our second-quarter same-store sales result."
Mr. Wilson added, "Our core strategy is to improve our value proposition, provide an improved shopping experience with our new store layouts, and build upon key 'trip driving' businesses to improve our comp store sales and improve shareholder value. As a major step in this strategy, we are progressing with our store resets and expect to be fully complete by the end of September."
One important initiative is a new partnership with Associated Wholesale Grocers (AWG), a major food distributor headquartered in Kansas City. The alliance with AWG will provide our customers with exciting new products under the "Best Choice" and "Always Save" brands. Both brands offer national brand quality at more competitive prices. We are excited to launch this new merchandise initiative and will be delivering more than 400 new items into our stores by the end of September.
Investor Conference Call
The Company will host an investor conference call at 10:00 a.m. Central Daylight Time on September 10, 2010, to discuss operating results for the second quarter ended August 1, 2010.The dial-in number for the conference call is 888-204-4368 (international/local participants dial 913-312-1389), and the Confirmation Code is 7742660. Parties interested in participating in the conference call should dial in approximately five minutes prior to 10:00 a.m. Central Daylight Time. A replay of the call will be available after 1:30 p.m. Central Daylight Time September 10, 2010 through September 15, 2010 by dialing 888-203-1112 or for international/local callers by dialing 719-457-0820. The Replay Passcode is 7742660. A replay of the call will also be available four hours after completion of the call by visiting the Investors page on the Company's website, www.ALCOstores.com.
The Company has included certain tables in this press release that are set forth fully in the Company's 10-Q.
Certain Non-GAAP Financial Measures
The Company has included Adjusted Gross Margin and Adjusted EBITDA, non-GAAP performance measures, as part of its disclosure as a means to enhance its communications with stockholders. Certain stockholders have specifically requested this information to assist them in comparing the Company to other retailers that disclose similar non-GAAP performance measures. Further, management utilizes these measures in internal evaluation, review of performance and in comparing the Company's financial measures to those of its peers. Adjusted EBITDA differs from the most comparable GAAP financial measure (earnings [loss] from continuing operations) in that it does not include certain items, as does Adjusted Gross Margin. These items are excluded by management to better evaluate normalized operational cash flow and expenses excluding unusual, inconsistent and non-cash charges. To compensate for the limitations of evaluating the Company's performance using Adjusted Gross Margin and Adjusted EBITDA, management also utilizes GAAP performance measures such as gross margin return on investment, return on equity and cash flow from operating activities. As a result, Adjusted Gross Margin and Adjusted EBITDA may not reflect important aspects of the results of the Company's operations.
About Duckwall-ALCO Stores, Inc.
Duckwall-ALCO Stores, Inc. is a regional broad line retailer that specializes in meeting the needs of smaller, underserved communities across 23 states, primarily in the central United States. The Company offers an exceptional selection of quality products and recognized brand names at reasonable prices. Its specialty is delivering those products with the friendly, personal service its customers have come to expect. With 257 stores, Duckwall-ALCO Stores is proud to have continually provided excellent products at good value prices to its customers for 109 years. To learn more about Duckwall-ALCO Stores, Inc. visit .
The Duckwall-ALCO Stores, Inc. logo is available at
This press release contains forward-looking statements, as referenced in the Private Securities Litigation Reform Act of 1995 ("the Act"). Any forward-looking statements are made by the Company in good faith, pursuant to the safe-harbor provisions of the Act. These forward-looking statements reflect management's current views and projections regarding economic conditions, retail industry environments, and Company performance. Factors which could significantly change results include but are not limited to: sales performance, expense levels, competitive activity, interest rates, changes in the Company's financial condition, the company's high operating leverage in an environment of flat or declining consumer spending, the economic viability of small rural towns the company serves and macro-economic factors affecting, and potentially affecting, the retail industry in general such as a decline in the value of the US dollar against the currencies of countries from which US retailers import product, the introduction of a national sales tax or Value Added Tax, continued high levels of unemployment, rising fuel prices and the high level of consumer indebtedness. Additional information regarding these and other factors may be included in the Company's 10-Q filings and other public documents, copies of which are available from the Company on request and are available from the United States Securities and Exchange Commission.
CONTACT: Duckwall-ALCO Stores, Inc. Jon A. Ramsey, Vice President - Controller 785-263-3350 X221 firstname.lastname@example.org Hagen and Partners Debbie Hagen 913-652-6547 email@example.com