Specialty retailers posting fourth-quarter results Wednesday reported that sales were higher year-over-year as shoppers responded positively to fashion offerings as well as gift and seasonal items.
Eddie Bauer Holdings Inc. reversed a loss in the quarter on strong outerwear sales while Zumiez delivered robust profits on strong sales. Hot Topic had higher sales, but charges cut into its bottom line.
Eddie Bauer reported a fourth-quarter profit after a loss last year, buoyed by a solid performance in outerwear and gift-giving items. For the three months ended Dec. 30, earnings came in at $63.2 million, or $2.11 a diluted share, which compares with a loss of $12.8 million, or 43 cents, in the year-ago period as total revenue grew 2 percent to $381.9 million from $376.4 million. Same-store sales rose 4.6 percent.
Gross margins for the quarter increased to 45 percent from 44.8 percent, which the company said was due to lower levels of markdowns and success in the loyalty program launched during the second half of 2006.
For the full fiscal year, the company posted a loss of $212 million, or $7.06 a diluted share, which compares with net income of $38.1 million in the prior year. No earnings per share data were available for 2005 because the company did not have shares outstanding until it emerged from bankruptcy in June 2005. Revenues for the year jumped to $1.01 billion from $593.7 million.
For teen specialty retailer Hot Topic, sales rose in the quarter, but were not enough to bolster a bottom line impacted by a hefty impairment charge. The retailer said earnings fell to $8.9 million, or 20 cents a diluted share, from $10.6 million, or 23 cents, last year.
Results include an asset impairment charge of $2.8 million, or 4 cents a share, in selling, general and administrative expenses, as well as 1 cent a share of stock-based compensation.
Sales for the quarter rose 4 percent to $240.5 million from $230.4 million, while total same-store sales fell 5.3 percent.
Full-year earnings plummeted 39 percent to $13.6 million, or 30 cents a diluted share, from $22.4 million, or 49 cents, in the year-ago period. Sales climbed 3.7 percent to $751.6 million from $725.1 million.Elizabeth McLaughlin, chief executive officer, said in a conference call to analysts that the retailer has several merchandise objectives, which include building "upon the third-quarter success in fashion products."
"We're also committed to achieving significant gains from our cost-saving initiatives," the ceo added.
Sports apparel and footwear retailer Zumiez posted a 67 percent surge in fourth-quarter earnings, driven by strong top-line growth.
For the three months ended Feb. 3, net income climbed to $11.3 million, or 39 cents a diluted share, from $6.8 million, or 23 cents, in last year's period as sales jumped 49 percent to $112.4 million from $75.4 million. Same-store sales rose 12 percent. For the 2006 fiscal year, earnings increased 62 percent to $20.9 million, or 73 cents a diluted share, from $12.9 million, or 47 cents, in the year prior on sales that surged 45 percent to $298.2 million from $205.6 million.
During the year, the company opened 42 new stores, and said it plans on opening 50 new locations this year.
The company said it expects fiscal 2007 earnings in the range of 94 cents to 96 cents a diluted share.
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