"We expect higher gas prices will continue to pressure our customer," said Kent Kleeberger, the company's CFO. For the company's third quarter, officials are predicting slight negative same-store sales.
However, they did say that stores opening this year are performing better than the units the retailer opened in 2004. At an average of 13,800 sf, last year's new units average $1.3 million in annualized sales. Meanwhile, this year's new stores, at 12,500 sf, are coming in at $1.5 million to $1.6 million.
The company has also met executives' goals of opening more stores in the first half of the year. This year, 60% of the projected 225 new units opened in the first six months, while only 40% of the new locations opened by then in 2004. The retailer currently operates 2,856 units in 48 states.
Officials also touched on their "metropolitan initiatives," which aim to put stores in more urban areas, such as parts of Long Island, NY. Though real estate is often more expensive in these areas, "they have the potential of leading the company in sales activity," said Bob Sasser, president and CEO, of those units.
Executives say they hope that the back-to-school season will prove successful for the company, with a "teacher's corner" area featured in some stores, as well as items such as $1 backpacks. The retailer, whose stores price everything at $1, is also moving to accept debit cards in all of its units. So far, the capability has been added to 50% of the company's total store count.
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