NEW YORK — Lane Bryant provided an additional plus for its parent, Charming Shoppes, in the quarter.
This story first appeared in the August 21, 2002 issue of WWD. Subscribe Today.
For the three months ended Aug. 3, income for Charming Shoppes, based in Bensalem, Pa., skyrocketed 72 percent to $25.5 million, or 20 cents a diluted share, 2 cents ahead of consensus estimates and 72 percent above the $14.9 million, or 14 cents, posted in the year-ago quarter. Sales were up 59 percent to $638.3 million from $402.7 million. Results include sales from Lane Bryant, which was acquired on Aug. 16 last year. Comparable-store sales inched up 1 percent.
“The merchandising margin at all of our brands showed significant improvement, year over year, due to strong sell-through of summer product, as well as strong inventory management throughout the quarter,” Dorrit Bern, chairman, president and chief executive officer, said during a conference call. “Also the addition of Lane Bryant to our portfolio of stores provided incremental earnings.”
She said that LB sales were $227 million, with comps down 3 percent. Top sellers were tops, skirts and denim. The fall selling season began with just 7 percent carryover of summer merchandise.
Fashion Bug sales totaled $321 million, with comps up 4 percent. Accessories, shoes, and intimate apparel performed well with positive comps. Over at Catherine’s, sales were $90 million and comps were flat.
Todd Slater, analyst at Lazard Freres, wrote in a research update following the earnings release that “August and third quarter could be off to a bit of a slow start,” noting that Charming is among many retailers who have noticed a slight sales slowdown since mid-July.
Slater wrote that, as the weather cools and sales reaccelerate against easy comps from a year ago, Charming should begin to benefit “meaningfully from improving comp-store sales and more favorable expense leveraging. We have a high degree of confidence in Charming’s ability to meet or exceed our current back-half of the year estimate, excluding the chance of a double-dip recession.” He concluded that Charming is positioned to outperform most other retail names in the foreseeable future.
Bern reaffirmed earnings per share of 11 cents for the second half and EPS of 44 cents for the full year ending on Feb. 1, 2003.