By  on August 30, 2007

The bulk of companies reporting second-quarter results Wednesday delivered weaker profits during a period of heavy markdowns and summer clearances.

Women's apparel retailer Chico's FAS Inc. saw a 28 percent dip in second-quarter earnings, hurt by sluggish same-store sales at both divisions. For the quarter ended Aug. 4, earnings dropped to $38.7 million, or 22 cents a diluted share, from $53.8 million, or 31 cents, in last year's period as sales increased 8 percent to $436 million from $403.4 million. Same-store sales declined 5.6 percent.

By division, comps decreased 6 percent at Chico's and 3 percent at White House|Black Market. While the company said it is optimistic for the fall and holiday season, it still expects a decrease in earnings in the third quarter.

Coldwater Creek Inc. reported earnings that slid 27.6 percent for the second quarter to $8.7 million, or 9 cents a diluted share, from $12 million, or 13 cents a share, as sales rose 17 percent to $253.5 million from $216.4 million. Total same-store sales declined 6 percent.

Citi Trends Inc. posted a 50 percent drop in second-quarter earnings to $627,000, or 4 cents a diluted share, from $1.3 million, or 9 cents, in the year-ago period. Sales climbed 27 percent to $96.8 million from $76.3 million, while total same-store sales increased 3.4 percent.

Jewelry retailer Finlay Enterprises Inc. widened its loss in the second quarter to $8.4 million, or 92 cents a diluted share, from a loss of $4 million, or 44 cents, in the year-ago period. Sales for the second quarter fell 1 percent to $148 million from $149.3 million, while same-store sales decreased 3.6 percent.

The company said the luxury sector remains strong, and the Carlyle stores and Bloomingdale's departments continue to trend positively. Finlay expects a loss in the third quarter in the range of $1.10 to $1.20 a diluted share, and a loss in the full-year period of about 40 cents to 55 cents a diluted share.

Meanwhile, Hong Kong-based apparel retailer Esprit Holdings Ltd. reported robust full-year earnings, with strength in European sales.For the year ended June 30, earnings soared 39 percent to 5.2 billion Hong Kong dollars, or $667.1 million. Dollar figures are at the average exchange rate.

Group turnover grew 27 percent to 30 billion Hong Kong dollars, or $3.85 billion. Retail turnover rose 32.2 percent to 12.83 billion Hong Kong dollars, or $1.65 billion, and was driven by same-store sales growth of about 20 percent.

The group said it plans to invest more than $1 billion Hong Kong dollars, or $128.2 million, to open over 100 retail stores and renovate existing stores worldwide.

After the market closed, Payless ShoeSource Inc. reported second-quarter net earnings that dropped 23.4 percent to $24.9 million, or 38 cents a diluted share, from $32.5 million, or 48 cents, in the prior year as sales slid 1 percent to $699.3 million from $706.1 million.

"Although Payless' second-quarter sales and earnings underperformed our expectations, we continued to pick up market share in a challenging industry environment," said Matthew E. Rubel, chief executive officer and president, in a statement. "In spite of short-term conditions, we believe Payless is firmly in a position of long-term strength due to our ability to consistently offer on-trend targeted product, our compelling brands, our highly efficient supply chain, and other initiatives that are key to serving our customers."

At Belk Inc., robust sales came at the expense of lower profits in the second quarter. The retailer said net income fell to $7.5 million from $26.3 million in the same period last year as total sales soared 20.2 percent to $879.6 million from $732 million. Same-store sales for the quarter showed a 2.5 percent gain.

"The decrease [in earnings] was due primarily to lower margin rates resulting from increased markdowns associated with the Parisian transition and a downturn in customer spending during the period, and acquisition-related integration costs and interest expense," the company said in a statement.

To continue reading this article...

To Read the Full Article
SUBSCRIBE NOW

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus