Adjusted net income was $9.0 million for the first quarter of fiscal 2014 compared to $8.1 million in the same period in fiscal year 2013.
R. Neal Black, president and CEO, said, "We are pleased to have continued the positive trend of increases in adjusted earnings that started in the second half of 2013. Comparable brand sales increased by double digits in the first two months of the quarter but then slowed after Easter resulting in a strong 8.4% increase for the quarter. As we begin the second quarter, we had solid sales again in fiscal May 2014 as we generated an estimated total sales gain of approximately 7.7%.
"However, our gross profit margin rate declined in May as we aggressively sold clearance goods left over from spring 2013 and our sales and marketing expenses increased. We are therefore cautious as we approach the critical Father's Day selling period as we attempt to balance strong sales with the appropriate amount of clearance markdowns and advertising expenses."
The adjusted earnings per diluted share and adjusted net income for the first quarter of fiscal year 2014 exclude expenses of approximately $75.4 million, or $1.65 per diluted share, of "Strategic Activity Costs," namely fees and expenses related to the company's strategic activities, including a $48.5 million termination fee and expense reimbursement paid to the owner of Eddie Bauer, legal and professional fees and expenses incurred in connection with various merger and acquisition activities and incremental incentive compensation related to the merger transaction with Men's Wearhouse.
After deducting the $75.4 million of Strategic Activity Costs, GAAP net (loss) was ($37.1) million or ($1.33) per diluted share for the first quarter of fiscal year 2014. GAAP net income in the first quarter of fiscal 2013 was $8.1 million or $.29 per diluted share as there were no adjustments to income in this period. ■