Exhibit 99.1
99 CENTS ONLY STORES(R) REPORTS THIRD QUARTER 2003 RETAIL SALES OF $200.5
MILLION, UP 25.0% FROM THIRD QUARTER 2002. SAME-STORE-SALES FOR THIRD QUARTER
2003 INCREASED 4.95%.
CITY OF COMMERCE, CA - October 7, 2003 - 99 Cents Only Stores(R) (NYSE:NDN)
reports total sales of $211.5 million for the third quarter ended September 30,
2003. This represents an increase of 22.8% over sales of $172.3 million from
third quarter 2002.
Third quarter 2003 retail sales for 99 Cents Only Stores were $200.5
million, up 25.0% from sales of $160.4 million in 2002. New stores opened in
2003 accounted for the majority of the sales increase. Sales were helped by
growth in the grocery category, which exceeded overall growth in other
categories.
Total sales for the nine months ended September 30, 2003 were $615.0
million, up 22.2% over last year. Total retail sales for the first nine months
of 2003 were $580.3 million, up 24.7% over 2002.
The Company added 10 stores in the third quarter including six in Houston,
Texas. Year to date, the Company added 23 stores with an additional 15 stores
planned for the fourth quarter, including at least five in Houston.
Same-store-sales increased 4.95% during the third quarter of 2003. An
increase in the number of transactions accounted for most of the
same-store-sales increase. Same-store-sales were up 6.4% for the first nine
months of 2003.
Bargain Wholesale sales for the third quarter of 2003 were $11.0 million
versus $11.8 in the third quarter of 2002. Bargain Wholesale sales represent
5.2% of third quarter 2003 total sales.
"We are pleased to announce continued strong retail sales and
same-store-sales in the third quarter of 2003," said President Eric Schiffer.
"We believe that our technology initiatives, which enabled us to improve our
retail in-stock position, along with our recent merchandising efforts helped to
increase sales.
Significantly, in all of our newer markets we are steadily gaining
additional customer support and loyalty through our high quality, excellent
values and broad selection of consumable merchandise. In August, our first
Northern California Bay Area store achieved over $1 million in sales in its
first month and had one of our best openings ever."
Third Quarter 2003 Earnings Outlook
-----------------------------------
The Company does not expect to make the consensus third quarter earnings
estimate of $0.20.
"Higher than planned costs to build and support the Texas operating
infrastructure combined with back-weighted store openings and a lower than
planned gross margin account for most of the earnings shortfall," said President
Eric Schiffer. "The lower than planned gross margin was chiefly due to strong
growth in the grocery category.
In order to achieve operating returns in Texas similar to the California
stores, given the higher than planned Texas start-up expenses including
absorption of the distribution costs, the Company estimates it needs about 25
Texas stores. This is planned to occur in the second quarter of 2004."
99 Cents Only Stores, Texas
---------------------------
The first two Texas stores were opened in Houston on June 19, 2003.
Currently, the Company has 10 stores in Houston.
The Company is encouraged that the average sales ticket thus far is higher
in Texas than in its non-Texas stores. The Company believes this indicates its
new Texas customers are excited about 99 Cents Only Stores' consumable product
mix and compelling values.
Overall, the initial preliminary sales results from the Texas stores
indicate these stores are running slightly behind the sales of the average new
non-Texas 99 Cents Only Stores. Importantly, the Company believes there are
significant opportunities for the Texas stores' sales growth.
During the start-up phase of its Texas operations, the Company has
continued to make improvements in its distribution, merchandising and product
offerings to meet the needs of the local market. The Company installed a
comprehensive supply chain distribution software system in its Houston DC and
the system is currently operating effectively.
"Since the Company's stores are still relatively unknown in Houston, the
main sales challenge is to get more consumers into the store for the first
time," said President Eric Schiffer. "Given the absence of an ongoing
advertising campaign in Houston and the competitiveness of that market, the new
Houston stores have achieved good results and are improving daily.
In retrospect, due to the high number of chains and independent stores in
Houston with names similar to 99 Cents Only Stores, we believe we should have
initiated ongoing advertising earlier on to get more consumers into the store
for the first time.
Importantly, we are excited that the initial sales results show that our
Houston customers have a higher average ticket than our non-Texas customers."
99 Cents Only Stores(R), the nation's oldest existing one-price retailer,
operates 174 retail stores, in California, Arizona, Nevada and Texas and a
wholesale division called Bargain Wholesale. The next store will open in
Northern California this Thursday October 9th in Tracy. 99 Cents Only Stores(R)
features compelling values on name-brand consumables in attractively
merchandised stores.
This press release contains forward-looking statements, as referenced in
the Private Securities Litigation Reform Act of 1995 (the "Act").
Forward-looking statements are inherently unreliable and actual results may
differ. Factors which could cause actual results to differ materially from these
forward-looking statements include, changes in the competitive market place,
general economic conditions, factors affecting the retail industry in general,
the timing of new store openings, the ability of the company to acquire
inventory at favorable costs and other factors discussed in the company's
filings with the Securities and Exchange Commission. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
Note to Editors: 99 Cents Only Stores(R) news releases and information
available on the World Wide Web at htpp://www.99only.com
CONTACT: 99 Cents Only Stores(R), City of Commerce, California, Andy Farina,
CFO, 323/881-9933
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