Gordmans Stores 4th-Quarter Profit Down 22% on Higher Costs, Expenses

       By Debbie Cai 

    Gordmans Stores Inc.'s (GMAN) fiscal four-quarter earnings fell 22% as the discount retailer reported higher costs and expenses, masking improved revenue.

    However, earnings beat the company's expectations.

    Gordmans, a Midwestern discount retailer that sells low-price, name-brand apparel and home decor, has seen its revenue strengthen for three years now, although earnings have now slipped for the second straight quarter.

    President and Chief Executive Jeff Gordman said that although the company was "disappointed" with its recent results and a slow start to the current fiscal year, he believes strategic initiatives in place will lead to improved comparable-store sales as the year progresses.

    For the quarter ended Feb. 2, Gordmans posted a profit of $7.9 million, or 41 cents a share, down from $10.2 million, or 53 cents a share, the year before. Net sales grew 9.4% to $202.5 million, driven mainly by contributions from the nine stores opened in the fiscal year. The latest quarter had 14 weeks compared to 13 weeks in the year-ago period.

    In January, the retailer cut its guidance to 35 cents to 37 cents a share in earnings, and about $203 million in sales, after fourth-quarter same-store sales declined more than 4%.

    Gross margin narrowed to 38.7% from 40.1%, as input costs increased 12%. Selling, general and administrative expenses also grew 13% to $65.6 million.

    Shares closed at $14.22 and were unchanged after hours. Through the close, the stock is down 31% over the past 12 months.

    Write to Debbie Cai at debbie.cai@dowjones.com