ABILENE —  ALCO Stores, Inc. (Nasdaq:ALCS) announced operating results for its second quarter ended July 29, 2012.
Net sales from continuing operations, excluding fuel, for the second quarter of fiscal 2013 increased 1.0 percent  to $119.8 million, compared to the second quarter of fiscal 2012. Same-store sales, excluding fuel, decreased 1.9 percent. Net sales from continuing operations, excluding fuel, for the 26 weeks ended July 29, 2012, increased 2.5 percent to $235.1 million, compared to the same period of the prior year. Same-store sales, excluding fuel, decreased 0.2 percent.
Net earnings for the second quarter of fiscal 2013 were $2.0 million, or $0.52 per diluted share, compared to net earnings of $2.3 million, or $0.60 per diluted share, for the second quarter of fiscal 2012. Net earnings for the 26 weeks ended July 29, 2012, were $0.7 million, or $0.18 per diluted share, compared to net earnings of $0.8 million, or $0.20 per diluted share, for the same period of the prior year.
Earnings from continuing operations, net of tax, for the second quarter of fiscal 2013 were $2.1 million, or $0.55 per diluted share, compared to $2.3 million, or $0.60 per diluted share, for the second quarter of fiscal 2012. Earnings from continuing operations, net of tax, for the 26 weeks ended July 29, 2012, were $1.0 million, or $0.26 per diluted share, compared to $0.8 million, or $0.21 per diluted share, for the same period of the prior year. Both net earnings and earnings from continuing operations for the second quarter and first half of fiscal 2012 included a one-time, non-cash after-tax charge of approximately $0.3 million, or $0.08 per share. This charge was the result of accelerated recognition of certain deferred financing fees from the Company’s previous revolving credit agreement. During the second quarter of fiscal 2012, the Company entered into a new revolving credit agreement with Wells Fargo Bank, National Association and Wells Capital Finance, LLC.
Richard Wilson, President and CEO, commented, “The Company’s second quarter results were impacted by the severe drought which affected the majority of our trading area and the agricultural business in the Midwest. Our second quarter earnings were also negatively impacted due to increased expenses relating to a shift of the store inventory process into the second quarter from the third quarter, new store expenses, and a one-time expense relating to a supply chain study. The Company’s gross margin rate expanded by 30 basis points due to better pricing disciplines and the initial impact of our new regional pricing initiative. For the second quarter of fiscal 2013, gross margin dollars grew by 1.9 percent and margin rate increased to 32.7 percent. On a year-to-date basis, gross margin dollars grew by 2.7 percent with an improved margin rate of 31.2 percent.”
Wilson concluded; “We expect improved results in the second half of the year from new initiatives in both Hardlines and Softlines, as well as the addition of frozen foods to our consumables offering beginning in October. We also expect a positive impact from the rollout of our regional merchandising strategy this fall.”