Gordmans Stores Cuts Quarterly Outlooks, Shares Plunge

By RetailFOXBusiness

Shares of Gordmans Stores (NASDAQ:GMAN) fell 25% after the off-price department-store operator cut its outlook for the third and fourth quarters citing stalling same-store sales.

The bleak outlook raised concerns that the retailer will fall short of Wall Street expectations for the first time since its 2010 market debut.

Continue Reading Below

The Omaha, Neb.-based company, which claims to offer products at prices 60% below big-name department and specialty stores, lowered third-quarter earnings to between 18 cents and 20 cents from an earlier 24 cents to 26 cents.

Gordmans anticipates current-quarter sales between $142 million and $144 million, down from a previous forecast of $145 million to $147 million. Analysts in a Thomson Reuters poll are looking for EPS of 26 cents on sales of $146.6 million.

The company also revised lower its sales outlook for the fourth quarter ending in February 2013, now anticipating sales between $213 million and $215 million, compared with an earlier guidance of $217 million to $219 million. That's below the consensus of $217.8 million.

The department store chain said the guidance reflects flat same-store sales growth.

"Our comparable store sales trends have slowed since Labor Day,” Gordmans CEO Jeff Gordman said in a statement.

Earnings for the fourth quarter are expected to be 58 cents to 61 cents compared with an earlier guidance of 62 cents to 65 cents. Wall Street is looking for earnings of 64 cents.

In recent trade, shares of Gordmans fell about 24.8% to $13.87.

Gordman said the company still remains confident in its overall strategy and that merchandising and marketing initiatives will propel sales higher starting in the fourth quarter.