Highlights for the Thirteen Weeks Ended July 30, 2022
Net sales decreased 6.8% compared to the second quarter of fiscal 2022, to $463.3 million, with total comparable sales decreasing 6.2% compared with a decrease of 29.9% in the same period in the prior fiscal year.
Net loss was $56.9 million in the second quarter of fiscal 2023, compared to net income of $5.2 million in the same period in the prior fiscal year.
We declared and paid a quarterly cash dividend of $4.5 million.
Effects of COVID-19 on Our Business
Adjusted EBITDA has its limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include:
Adjusted EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
Adjusted EBITDA does not reflect changes in our cash requirements for our working capital needs;
Adjusted EBITDA does not reflect the interest expense and the cash requirements necessary to service interest or principal payments on our debt;
Adjusted EBITDA does not reflect cash requirements for replacement of assets that are being depreciated and amortized;
Adjusted EBITDA does not reflect non-cash compensation, which is a key element of our overall long-term compensation;
Adjusted EBITDA does not reflect the impact of certain cash charges or cash receipts resulting from matters we do not find indicative of our ongoing operations; and
other companies in our industry may calculate Adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.
We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only as supplemental information.
"Depreciation and amortization" represents depreciation, amortization of intangible assets and amortization of content and capitalized cloud-based system implementation costs.
"Gain on sale leaseback" represents the gain attributable to the sale leaseback of our distribution center in Opelika, Alabama.
"Other COVID-19 costs" represents costs incurred for store location cleaning and capacity management labor, store location cleaning supplies and deep clean services.
"Sponsor management fee" represents management fees paid to our sponsor, LGP (or advisory affiliates thereof), in accordance with our management services agreement. The management fee was discontinued upon the completion of our initial public offering in March 2021, as LGP no longer provides managerial services to us in any form.
"Other" represents the one-time impact of severance, certain legal matters, executive leadership transition and business transition activities.
See "Non-GAAP Financial Measures" for a definition of Adjusted EBITDA and a reconciliation of Adjusted EBITDA to net income (loss).
Comparison of the Thirteen Weeks ended July 30, 2022 and July 31, 2021
Selling, General and Administrative Expenses
Jefferson, Ohio. We also had increases in spending on strategic initiatives including pre-opening costs associated with our new and remodeled store locations as well as costs incurred to support several emerging businesses, which we are referring to as our "Blue Ocean" initiatives. We have also experienced inflationary pressures in energy, commodity and labor costs that have been partially offset by improved operating efficiencies and lower incentive compensation costs.
We had $1,027.3 million of debt outstanding (face value) as of July 30, 2022 versus $787.5 million as of July 31, 2021.
Net loss was $56.9 million for the thirteen weeks ended July 30, 2022, a decrease of $62.1 million compared to the same period in fiscal 2022. The decrease was driven by the factors described above.
Comparison of the Twenty-Six Weeks ended July 30, 2022 and July 31, 2021
Selling, General and Administrative Expenses
We had $1,027.3 million of debt outstanding (face value) as of July 30, 2022 versus $787.5 million as of July 31, 2021.
Net loss was $92.0 million for the twenty-six weeks ended July 30, 2022, a decrease of $112.3 million compared to the same period in fiscal 2022. The decrease was driven by the factors described above.
Pre-opening and closing costs excluding loss on disposal of fixed assets
Includes amortization of content and capitalized cloud-based system implementation costs.
The following table provides a summary of our cash provided by (used for) operating, investing and financing activities for the twenty-six weeks ended July 30, 2022 and July 31, 2021:
Net Cash (Used for) Operating Activities
Net Cash Provided by (Used for) Investing Activities
Capital expenditures for the twenty-six weeks ended July 30, 2022 and July 31, 2021 are summarized as follows:
Total capital expenditures, net of landlord contributions $ 40.5
Additionally, we purchased the remaining outstanding stock of WeaveUp for $4.3 million in the first half of fiscal 2023.
Net Cash Provided by Financing Activities
Our liquidity is currently not dependent on the use of off-balance sheet transactions other than letters of credit, which are typical in a retail environment.
Critical Accounting Policies and Estimates
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