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Claire’s Net Rises, Outlook Raised

NEW YORK — Claire’s Stores kept its finger off the promotional trigger in the second quarter, and that helped it produce a 31.5 percent increase in earnings during the period.<br><br>The company, which operates a total of 2,948 stores,...

NEW YORK — Claire’s Stores kept its finger off the promotional trigger in the second quarter, and that helped it produce a 31.5 percent increase in earnings during the period.

This story first appeared in the August 25, 2003 issue of WWD.  Subscribe Today.

The company, which operates a total of 2,948 stores, also raised its earnings expectations for the full year.

The Pembroke Pines, Fla.-based retailer of value-priced jewelry and accessories said for the three months ended Aug. 2, net income surged to $22.2 million, or 45 cents a diluted share, compared with income in the year-ago period of $16.9 million, or 35 cents. Total sales for the quarter rose 11 percent to $265 million from $238.7 million and increased 5 percent on a comparable-store basis.

“We successfully drew customers into our stores and generated strong sales during the second quarter without the need for some of the promotional activity initially planned,” Marla Schaefer, acting co-chairman and co-chief executive, said in a statement. “As a result, we generated additional revenue and stronger-than-anticipated margins, giving rise to substantial growth in diluted earnings per share from continuing operations.”

Comps increased in the high-single digits at Claire’s North America and the mid-single digits at Icing by Claire’s but fell at a low-single-digit pace at Claire’s Europe. The company said European sales were hurt by strikes in France and unusually hot weather.

For the year ending February 2004, Claire’s Stores raised its earnings guidance to $2.05 from the $1.95 it forecast in June. Last year’s EPS was $1.59. For the third quarter, the company expects earnings of 31 to 32 cents a share, higher than year-ago earnings of 25 cents, on revenues of $249 million to $251 million.

Second-half projections take into account the continuing difficulties in Europe and strong year-ago comparisons, the company said.

In the first half, earnings jumped 50.1 percent to $37.7 million, or 77 cents a diluted share, compared with earnings in the year-ago half of $25.2 million, or 52 cents. Sales for the six months climbed 12.4 percent to $504.7 million from $499.1 million and rose 6 percent on a comp basis.