NEW YORK — Charlotte Russe Holding Inc, a specialty retailer focused on younger women, reported a 17.7 percent rise in its third-quarter earnings as cost controls offset weaker sales.
The San Diego-based fashion company said income increased to $5.6 million, or 24 cents a diluted share, for the three months ended June 29, a penny below Wall Street’s expectations. Profits were $4.8 million, or 70 cents, in last year’s third quarter. Total sales ramped up 30 percent to $102 million from $78.4 million, but decreased 0.3 percent on a comparable-store basis.
“While our comp-store sales did not achieve what we anticipated, our merchandise margins were again strong,” Bernard Zeichner, chairman and chief executive, said. “The key miss in sales was summer basic, when we moved into warm-weather selling. Our inventory in these departments was well below last year, thus negatively affecting the bottom and topline. For the fourth quarter, we are strategically building inventories over last year to drive the sales.”
Harriet?Bailiss-Sustarsic, president and chief merchandise officer, said she was confident in CR’s interpretations for the back-to-school selling season, noting that the peasant and bohemian trends have transitioned into western styling and sleek and sexy men’s wear silhouettes. Key items will be corduroy bottoms, novelty denim, suede, tailored bottoms and sexy knits. In addition, CR has introduced Refuge, a private label jeans now in stores. Pricing will be competitive with the balance of CR’s denim assortment and offerings in a mall. She noted that comp inventory will be up 4 percent heading into the back-to-school.
Looking ahead, CR expects earnings per share to range from 28 to 31 cents for the fourth quarter, based on achieving comp increase in the low-single digits.
Year-to-date, income rose 2 percent to $16.5 million, or 70 cents a diluted share, compared with $16.2 million, or 69 cents. Sales rang up 27.4 percent higher to $300 million from $235.5 million.
This story first appeared in the July 22, 2002 issue of WWD. Subscribe Today.