The decline in sales also reflected weak sales of winter-related products due to unseasonably warm and dry conditions in most of the company's western markets. Additionally, sales results in the fiscal 2014 first quarter reflect a small benefit over the prior year from the calendar shift of the Easter holiday, during which the company's stores are closed, out of the first quarter and into the second quarter this year.
Gross profit for the fiscal 2014 first quarter was $72.7 million, compared to $80.5 million in the first quarter of the prior year. The company's gross profit margin was 31.4 percent in the fiscal 2014 first quarter versus 32.7 percent in the first quarter of the prior year, reflecting a decrease in merchandise margins of 28 basis points and an increase in store occupancy costs as a percentage of net sales. For comparison purposes, merchandise margins in the first quarter last year increased by 113 basis points versus the first quarter of fiscal 2012.
Selling and administrative expense as a percentage of net sales increased to 29.8 percent in the fiscal 2014 first quarter from 27.6 percent in the first quarter of the prior year, due primarily to lower sales levels.
Net income for the first quarter of fiscal 2014 declined 72.0 percent $2.1 million, or 9 cents per diluted share, including expenses associated with the development of the company's new e-commerce platform of 1 cent per diluted share, compared to net income of $7.5 million, or 34 cents per diluted share, for the first quarter of fiscal 2013.
"As expected, our first quarter results declined when compared to a very strong performance during the prior year, due largely to substantially reduced demand for firearms and ammunition products and soft sales of winter products resulting from warm and dry conditions in most of our western markets throughout the winter season," said Steven G. Miller, the company's Chairman, President and Chief Executive Officer. "We were encouraged by the strength of our non-firearm and non-winter-related product categories during the quarter.
Excluding sales of firearms, ammunition, firearm accessories and winter-related products, the company's same store sales increased in the solid low single-digit range for the period. While current sales trends are somewhat difficult to read given the later timing of Easter this year, sales in the second quarter to-date have been challenged by lower than expected demand for firearms and ammunition products compared to the prior year, as well as what appears to be some softness in our overall consumer environment. That being said, we feel well positioned from a merchandise and promotional perspective for the key selling period during the quarter, which includes Memorial Day, Father's Day and the start of the summer season."
Quarterly Cash Dividend
The company's Board of Directors has declared a quarterly cash dividend of $0.10 per diluted share, which will be paid on June 13, 2014 to stockholders of record as of May 30, 2014.
Share Repurchases
During the fiscal 2014 first quarter, pursuant to its share repurchase program, the company repurchased 28,512 shares of its common stock for a total expenditure of $0.4 million. As of March 30, 2014, the company had $9.2 million available for future share repurchases under its $20.0 million share repurchase program.
Guidance
For the fiscal 2014 second quarter, the company expects same store sales comparisons in the low negative to low positive single-digit range and earnings per diluted share in the range of $0.12 to $0.20. This guidance reflects the continued softness in demand for firearms, ammunition and related products and the negative effect of the calendar shift of the Easter holiday, during which the company's stores are closed, out of the first quarter and into the second quarter this year.
In addition, second quarter guidance includes approximately $0.01 per diluted share in anticipated expenses associated with the development of the company's e-commerce platform. For comparative purposes, the company's same store sales increased 4.4 percent and earnings per diluted share were $0.28 for the second quarter of fiscal 2013.
Store Openings
During the first quarter of fiscal 2014, the company closed four stores, two of which were part of relocations, and ended the quarter with 425 stores in operation. During the fiscal 2014 second quarter, the company anticipates opening two new stores. For the fiscal 2014 full year, the company currently anticipates opening approximately 12 to 15 net new stores.
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