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Gordmans Stores Inc. (GMAN - Snapshot Report), which houses a large pool of the latest fashion brands, recently trimmed its revenue guidance for the fourth quarter and fiscal 2012 ending Feb 2, 2013. Poor comparable sales till Jan 12 compelled the retailer to take the decision.

Comps till Jan 12, 2013 declined 4.6%. Hence, the company now anticipates revenue to be approximately 203.0 million, lower than its prior expectation of $213.0—$215.0 million for the fourth quarter of fiscal 2012.

Seasonality as well as the lack of variety in merchandise offerings in several categories hurt comps in the quarter. Hence, to manage inventory, the company banked on various sales-driven initiatives that in turn hurt margins. Decline in margins resulted in lower earnings per share.

Earnings per share for the fourth quarter of fiscal 2012 are expected in the range of 35–37 cents, much lower than its previous expectation of 58–61 cents. In response to the guidance cut, the Zacks Consensus Estimate went down 38.3% to 37 cents per share over the last 7 days.

This is not the first time Gordmans Stores slashed its guidance. In concurrence to its third-quarter earnings release, management lowered its earnings per share guidance from the range of $1.46–$1.51 to $1.39–$1.42.

Also, the company lowered its top-line expectation to the range of $618–$620 million from $624–$628 million for fiscal 2012. In the prior quarter too, Gordmans had slashed its revenue guidance from $629–$634 million to $624–$628 million.

Sluggish comps growth and successive declines in revenue guidance indicates tough operating environment for the company. Even an extra additional operating week in fiscal 2012 compared with the previous year failed to trigger the company’s business for the year.

However, Gordmans Stores is in an expansion mode mainly in new markets. It has expanded its store base by 50% year over year in 2012. For 2013, the company plans to open 10 new stores in 6 new and 2 existing markets. Gordmans, with these store openings, will increase its store count by nearly 40% to 93 stores over a three-year period.

Currently, Gordmans Stores has a Zacks Rank #3 (Hold). However, retailers currently doing well include Big Lots Inc. (BIG - Analyst Report), Ross Stores Inc. (ROST - Analyst Report) and TJX Companies (TJX - Analyst Report). All three companies carry a Zacks Rank #2 (Buy).

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