NEW YORK — Declining comparable-store sales and rising costs from store openings impeded third-quarter earnings for Loehmann’s Holdings Inc.
For the three months ended Nov. 1, net income for the Bronx, N.Y.-based women’s specialty retailer fell 8.9 percent to $4.9 million, or 65 cents a diluted share, compared with $5.4 million, or 73 cents, last year.
Sales for the period rose 6.7 percent to $101 million from $94.7 million last year. Comparable-store sales declined 2.3 percent after posting a gain of 12.1 percent in last year’s quarter.
Weighing on the bottom line was a $3.7 million increase in selling, general and administrative fees, $2.6 million of which the company attributed to store openings over the past 12 months. SG&A totaled $31.2 million, or 30.9 percent of sales.
One new store was opened during the quarter, bringing the number of units in operation to 47. According to the company, over the last 15 months six stores have been opened while three underperforming locations were shuttered. Going forward the company plans to open three to five stores a year.
Robert Friedman, president and chief executive officer, said during the conference call that imports of Italian and French products were among the strongest performers during the quarter. “We’ve seen a return to career business, the suit business was very strong,” said Friedman.
He went on to say that while these segments have rebounded, the company’s assortment of merchandise continues to change. “There are shifts, as there always are,” said Friedman. “We don’t have the strength in certain categories that we had a year ago. For example, we don’t have the same impact with designer sportswear.” However, Friedman indicated that the company’s purchase of 100,000 units of Puma helped fill this void.
Shoe sales have also been on the rise. In November, the company opened its first dedicated shoe store in San Francisco and plans to expand the shoe concept going forward are in the works.
For the nine months to date, earnings contracted 42.8 percent to $7 million, or 93 cents a diluted share, from $12.2 million, or $1.67, last year.Sales for the period increased 2.8 percent to $270.7 million from $263.4 million last year. Comps withered 4.4 percent against a gain of 10.1 percent last year.
SG&A expenses increased 9.5 percent, or $7.6 million, to $87.2 million. Expenses related to store openings accounted for $7.5 million.
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