• Net income down to $2.3m
  • Sales flat at $95m
  • Comparable sales up 2% 

Men's wear retailer Casual Male has reported a drop in first quarter net income sfter being hurt by a higher tax rate.

The company said on Friday (18 May) that net income was US$2.3m for the quarter ended 28 April, against $4.2m in the prior year period. Sales were broadly flat on the prior year at $95m, while comparable sales increased 2%.

The big and tall men's wear retailer said its effective tax rate was 40.4% against 10.1% the year before, as a result of the reversal of its valuation allowance in the first quarter of last year.

Gross profit margin increased to 47.7% against 46.9% a year earlier, which the company attributed to higher merchandise margins, although these were partially offset by an increase in occupancy costs.

For the full year the company is forecasting a comparable sales increase of 4.7% to 6.6% and total sales of $416.5m-423.9m, driven by the expansion of its DXL store format and continued growth in its direct business. It is expecting diluted earnings per share of $0.22 to $0.27 per share compared with $0.89 per share last time.