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99 CENTS ONLY STORES REPORTS STRONG SECOND QUARTER FISCAL 2018 RESULTS
Second Quarter Fiscal 2018 Highlights:
· Net sales increased to $540.5 million, up 8.9% compared to the prior year
· Same-store sales increased by 9.0% compared to the prior year
· Gross margin, as a percentage of net sales, increased to 28.8%, up from 28.4% in the prior year
· Net loss was $33.6 million compared to net loss of $35.1 million in the prior year
· Adjusted EBITDA(1) increased 93.2% to $10.1 million compared to the prior year
CITY OF COMMERCE, California September 7, 2017 99 Cents Only Stores LLC (the Company) announced its financial results for the second quarter ended July 28, 2017.
Geoffrey Covert, President and Chief Executive Officer, stated, The second quarter offers further evidence of the progress we have continued to make in executing our turnaround plan. Our focused strategy of improving the Companys operating performance is yielding encouraging results.
Mr. Covert continued, Net sales for the second quarter were $540.5 million, up 8.9% over the prior year period. On a same-store basis, sales increased 9.0%, resulting from a 4.7% increase in transaction count and a 4.1% increase in basket. This was driven by our emphasis on providing higher-quality merchandise, expanding our fresh variety, enhancing our in-stock position, strengthening our marketing efforts and improving the customer shopping experience. We are also benefitting from increased sales in our above $1 products, as we believe our customers appreciate the extreme value of the merchandise that we provide. We are working to differentiate the 99 Cents Only brand by focusing on fresh, seasonal and closeout merchandise at the lowest prices.
Mr. Covert concluded, We also continue to make progress in improving overall operating efficiencies. Second quarter gross margin of 28.8% was up 40 basis points year-over-year, driven primarily by our focus on reducing shrink and managing scrap, along with increased efficiency in our logistics network. Our second quarter net loss was $33.6 million, an improvement of $1.5 million or 4.3% compared to the second quarter of fiscal 2017. Importantly, second quarter Adjusted EBITDA was $10.1 million, up 93.2% compared to $5.2 million last year. On a year-to-date basis, Adjusted EBITDA of $26.4 million is up 42.3% compared to the same period a year ago. We are encouraged by this result and continue to expect we will achieve our guidance of improving adjusted EBITDA for fiscal 2018.
Second Quarter Financial Results
For the second quarter of fiscal 2018, the Companys net sales increased 8.9% to $540.5 million, compared to $496.5 million in the second quarter of fiscal 2017. Same-store sales increased 9.0% compared to the second quarter of fiscal 2017, with higher customer traffic of 4.7% in addition to higher average ticket of 4.1%. The increase in same-store sales was primarily driven by higher sales from seasonal, general merchandise and consumable categories, in part due to higher sales of above $1 products, better product assortment and improved store execution. Sales from grocery and fresh offerings also increased, driven by better product availability, improved product assortment, as well as continued improvements in store in-stock levels.
The following information was filed by 99 Cents Only Stores Llc (NCSO) on Thursday, September 7, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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