The gross margin increased to 35.5 per cent of sales in H1 FY23 from 34 per cent in H1 FY22, primarily due to increased merchandise margins and decreased freight expense. However, selling, general, and administrative expenses climbed to 33.3 per cent of sales compared to 30.3 per cent last year, the company said in a media release.

"Our year-to-date sales trend continues to be negatively impacted by pressure on our customers' discretionary spending," said John Cato, chairman, president, and chief executive officer.  "Our gross margin improved as we took steps to right size our inventory.  However, we believe the back half of the year will remain challenging."

In the second quarter of fiscal 2023 (Q2 FY23), the corporation reported net income of $1.1 million or $0.06 per diluted share, in contrast to a net loss of $2.3 million or minus $0.11 per diluted share for the same quarter in the previous year. Sales for Q2 FY23 stood at $181.2 million, marking a decrease of 7 per cent from sales of $195.0 million in Q2 FY22. The company's same-store sales for the quarter also decreased by 5 per cent compared to Q2 FY22.

Gross margin for the quarter increased to 35.1 per cent from 32.4 per cent of sales due to higher merchandise margins and decreased freight expense. Selling, general, and administrative expenses as a percent of sales increased from 31.2 per cent to 34 per cent during the quarter.

Fibre2Fashion News Desk (DP)