Shares of Bebe Stores Inc. fell almost 10 percent in Nasdaq trading Tuesday after the company warned that its third-quarter loss would be deeper and its sales lower than previously expected.
The Brisbane, Calif.-based specialty retailer said in a preliminary report on results for the quarter ended April 4 that sales in the period fell 17.2 percent to $93 million as comparable-store sales fell 5.7 percent with gross margins below year-ago levels. Its loss per share, including non-cash impairment charges, is now expected to land between 29 and 32 cents a diluted share.
When the company reported second-quarter results on Feb. 6, it projected flat comps, higher gross margin and a loss per share in the midteens.
Bebe said that extreme weather in the quarter had precipitated 136 temporary store closures. It operates 226 stores, 176 under the Bebe brand.
The company noted that merchandise margins increased by about 50 basis points during the three months but, due to promotional pressure, were below previous expectations. Gross margin fell as sales decelerated.
Steve Birkhold, chief executive officer, said, “We transitioned fully to spring product early and had much lower levels of excess winter product during the sustained cold weather in the quarter. If we were to use our West region performance, without weather impact, as a proxy, comparable-store sales for Bebe and bebe.com combined would have been flat for the fiscal third quarter.”
He said the weakness of the results was attributable to the weather and the Easter shift rather than merchandising issues. “We continue to believe that our new product is being well received by our Bebe girl as we saw e-commerce, which was not impacted by weather, achieved positive comparable-store sales and margin in the high teens for the third quarter. We were also encouraged by the sales and margin performance of our March catalogue, which had the best sell-through rate since November 2011.”
Reiterating her “buy” rating based on the signs of improvement highlighted by the ceo, Janney Capital Markets analyst Adrienne Tennant commented in a note to clients, “While clearly the [turnaround] has been pushed out a few quarters, we continue to believe the business is on the right track and are buying based on weakness, particularly under $6.”
Shares closed at $5.80, down 64 cents or 9.9 percent.
Bebe plans to release final results for the quarter on May 8.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast