Shares of leading big and tall men's apparel retailer Casual Male Retail Group (NASDAQ:CMRG) fell nearly 11% Friday, on the announcement that the company lost $5.1 million in the fiscal first quarter (ended May 1), up from $2.8 million a year ago. Operating losses widened even as net revenues at its core Casual Male Big & Tall store line rose more than 7% to $78.1 million, and same-store sales improved 9.2%.
Markdowns in some product categories pulled gross margins down year over year, while the company is still losing money as it tries to shut down its Dockers outlets. [The Dockers brand was also named as a culprit in a recent story about Genesco (NYSE:GCO), a shoe and accessory retailer.]
Despite all this, there's still reason for optimism at Casual Male Retail. Of the company's $5.2 million year-over-year increase in selling, general, and administrative expenses, $3.4 million was spent on marketing connected with the national launch of a new George Foreman line of clothing. The company appears happy with the uptake of the Foreman clothes, though the marketing costs seem to have taxed both the company financially and the legend personally. Last month, citing a full dance card, Foreman backed off from a March commitment to sit as a full board member for the men's clothier.
Casual Male Retail is also moving into new markets, as well as introducing new products. Late last month, the retailer announced plans to move into Canada. In the long term, the company's planned expansion above the border could have a significant impact on results.
It's results that investors are waiting on. While sales have grown in recent years, Casual Male Retail hasn't delivered a net profit since the year ended Feb. 2001. Put another way, the firm (unlike its customers) clearly has a lot of work to do before it really stands out in a crowd. Consequently, it's no surprise that the company's shares have trailed the S&P 500 by a wide margin over the last decade.
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Fool contributor Dave Marino-Nachison doesn't own any of the companies in this story.
