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Syms Corp. Reports Operating Results for Fiscal Quarter Ended on 2008-11-29

January 12, 2009 | About:

Syms Corp. (SYMS) filed Quarterly Report for the period ended 2008-11-29.

Syms Corp. operates a chain of `off-price` retail stores locatedthroughout the Northeastern and Middle Atlantic regions and in the MidwestSoutheast and Southwest. Each Syms store offers a broad range of first quality in-season merchandise bearing nationally recognized designer or brand-name labels at prices substantially lower than those generally found in department and specialty stores. Syms directs its merchandising efforts at predominantly middle-income fashion-minded and price conscious customers. Syms Corp. has a market cap of $142.67 million; its shares were traded at around $7.41 with a P/E ratio of 163 and P/S ratio of 0.53. Syms Corp. had an annual average earning growth of 13.6% over the past 5 years.

Highlight of Business Operations:

Net sales for the three months ended November 29, 2008 were $64,330,000, a decrease of $5,694,000 (8.1%) as compared to net sales of $70,024,000 for the three months ended December 1, 2007. For the nine months ended November 29, 2008, net sales were $187,948,000, a decrease of $10,607,000 (5.3%) as compared to net sales of $198,555,000 for the nine months ended December 1, 2007. Comparable store sales decreased 6.4% for the three months and 3.8% for the nine months ended November 29, 2008 as compared to the comparable periods in the prior fiscal year. In our comparable store computation, we only include stores that have been opened for a period of at least 12 months and stores that were open during both fiscal years. We did not have any expansion in square footage in the nine months ended November 29, 2008. The decrease in sales in the three months ended November 29, 2008 is attributable to the closing of one store earlier this fiscal year coupled with generally decreased sales from declines in store traffic commensurate with the recessionary trend in the U.S. economy. The decrease in sales for the nine months ended November 29, 2008 is attributable to the closing of one store in fiscal 2007 and one store in fiscal 2008 coupled with generally decreased sales from declines in store traffic commensurate with the recessionary trend in the U.S. economy.

Gross profit for the three months ended November 29, 2008 was $26,632,000 (41.4% as a percentage of net sales as compared to $29,548,000 (42.2% as a percentage of net sales) for the three months ended December 1, 2007. Gross profit for the nine months ended November 29, 2008 was $77,950,000 (41.5% as a percentage of net sales) as compared to $80,368,000 (40.5% as a percentage of net sales) for the nine months ended December 1, 2007. The Companys gross profit may not be comparable to those of other entities, since some entities may include all of those costs related to their distribution network in cost of goods sold while others, like the Company, exclude a portion of those costs from gross profit and, instead, include them in operating expenses such as selling and administrative expenses and occupancy costs. The decrease in gross profit dollars in the three and nine months ended November 29, 2008 compared to a year ago is primarily due to lower sales as a result of store closures coupled with declines in store traffic commensurate with the aforementioned recessionary trend. The decrease in gross profit percentage for the three months ended November 29, 2008 compared to the same period last year is primarily attributable to increased markdowns and retail incentives related to the recessionary environment during this quarter. The increase in gross profit percentage during the nine months ended November 29, 2008 compared to the same period last year is primarily attributable to lower markdowns during the first half of this year.

Advertising expense for the three months ended November 29, 2008 was $2,723,000 (4.2% as a percentage of net sales) as compared to $2,813,000 (4.0% as a percentage of net sales) for the three months ended December 1, 2007. Advertising expense for the nine months ended November 29, 2008 and December 1, 2007 was $5,367,000 (2.9% of net sales) and $6,408,000 (3.2% of net sales) respectively. Decreased advertising spend during both periods in 2008 was primarily due to shifts away from TV advertising to a lower-cost and more geographically focused usage of radio, e-mail and in-store promotional activities.

Occupancy costs (net) were $3,850,000 (6.0% as a percentage of net sales) for the three months ended November 29, 2008 as compared to $3,641,000 (5.2% as a percentage of net sales) for the three months ended December 1, 2007. Occupancy costs (net) were $11,682,000 (6.2% as a percentage of net sales for the nine months ended November 29, 2008 as compared to $10,848,000 (5.5% as a percentage of net sales) for the nine months ended December 1, 2007. Included as an offset to net occupancy cost is rental income from third parties. For the three and nine month periods ended November 29, 2008, rental income was $459,000 and $1,537,000 respectively. For the three and nine month periods ended December 1, 2007, rental income was $763,000 and $2,281,000 respectively. The decrease in rental income is primarily due to the loss of tenants due to their cessation of business in certain rental properties.

Depreciation and amortization expense was $1,971,000 (3.0% as a percentage of net sales) for the three months ended November 29, 2008 as compared to $1,939,000 (2.8% as a percentage of net sales) for the three months ended December 1, 2007. Depreciation and amortization expense for the nine months ended November 29, 2008 was $5,834,000 (3.1% as a percentage of net sales) as compared to $5,723,000 (2.9% as a percentage of net sales) for the nine months ended December 1, 2007.

For the three month period ended November 29, 2008 the effective income tax rate was 37.0% as compared to 47.1% for the comparable period a year ago. For the nine month period ended November 29, 2008 and December 1, 2007 the effective income tax rates were 26.5% and 47.3% respectively. Differences in effective income tax rates are largely attributable to non-deductibility of certain operating expenses.

Read the The complete Report

Gurus who own SYMS

SYMS is in the portfolios of Irving Kahn, Michael Price. More on SYMS:

Gurus buys and sells of SYMS

10-year financial history of SYMS.

Insider buys/sells of SYMS.

Rating: 2.0/5 (1 vote)

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