Aug 27, 2008
Charming Shoppes Q2 results beat Street
Aug 27, 2008
Aug 27 (Reuters) - Women's plus-size apparel retailer Charming Shoppes Inc posted second-quarter results that beat market estimates, helped by leaner inventories and lower expenses.
The company, which has seen customer visits to its stores fall in the wake of rising fuel prices and the U.S. economic downturn, has cut jobs and closed stores and is shedding its non-core brands to combat challenging retail trends.
Charming Shoppes, whose Chief Executive Dorrit Bern resigned in July, reported a net loss of $8.3 million, or 7 cents a share, for the period ended Aug. 2, compared with a profit of $18.3 million, or 14 cents a share, a year earlier.
The retailer posted a profit of 2 cents a share, excluding the severance charge related to Bern's exit but including consolidation charges, while analysts on average expected the company to break even on a per-share basis, according to Reuters Estimates.
Net sales at the company, whose core brands include Lane Bryant, Catherines and Fashion Bug, fell 7 percent to $648.6 million. Analysts on average estimated revenue of $628.2 million.
The company, which competes with Dress Barn Inc and larger retailer TJX Companies Inc , said same-store sales fell 10 percent during the period.
Selling, general and administrative expenses fell 6 percent to $165.0 million.
For the third quarter, the company forecast a loss of 11 cents to 9 cents a share from continuing operations. Analysts expect a loss of 1 cent a share.
The company expects third-quarter net sales of $560 million to $570 million, while analysts expect revenue of $563.8 million.
The retailer sees weak traffic trends continuing in the quarter, with a high single-digit percentage decrease in same-store sales.
For the fourth quarter, Charming Shoppes expects to narrow its loss of 19 cents a share from continuing operations a year earlier.
The company said on Monday it agreed to sell its non-core misses apparel catalogs, collectively known as Crosstown Traders, to Orchard Brands, a portfolio company of Golden Gate Capital, for $35 million. It also agreed to sell related credit card receivables to Alliance Data Systems Corp for about $40 million.
In addition, the retailer said it would initiate a process to explore the sale of its Wisconsin-based Figi's Gifts in Good Taste catalog business.
Shares of the Bensalem, Pennsylvania-based company closed at $5.62 Tuesday on Nasdaq. (Reporting by Anne Pallivathuckal in Bangalore; Editing by Pratish Narayanan)
© Thomson Reuters 2022 All rights reserved.