By  on August 18, 2006

Among the specialty retailers reporting quarterly figures Thursday, earnings were affected by option expensing, settlement gains and weaker sales.

Aéropostale Inc., the mall-based teen specialty retailer, reported a slight rise in earnings for the second quarter because of a resolved dispute with a vendor regarding the enforcement of the company's intellectual property.

For the three months ended July 29, net income increased to $8.4 million, or 16 cents a diluted share, from $7.4 million, or 13 cents, in the year-ago period. Excluding the $2.1 million received from the settlement, the company reported an income of $7.2 million, or 13 cents a share. The results included net losses at Jimmy'Z of 3 cents a diluted share, as well as a 1-cent per diluted share charge related to the expensing of stock options.

Sales climbed 18 percent, to $274.6 million from $232.8 million last year, and same-store sales bumped 1 percent compared with a decrease of 2.2 percent in 2005.

"While we were able to achieve results in line with our plan for May and June, our sales and margins for the quarter were negatively affected by a significant slowdown in our business in the latter half of July," said Julian R. Geiger, chairman and chief executive officer of the company, in a release. "The trends in our business improved in August, particularly in the early back-to-school region, but we are unable to extrapolate this performance to the other regions, which have not yet packed in their back-to-school selling season."

The company remains cautious looking into the third quarter, expecting earnings in the range of 55 to 57 cents a diluted share, including a 1-cent per share charge related to the expensing of stock options.

New York & Co. posted a decline in second-quarter earnings, as sales for stores opened at least a year fell below analysts' expectations.

For the three months ended July 29, net income dropped to $6.5 million, or 11 cents a diluted share, from $12.3 million, or 21 cents, in the same period last year. Sales increased 4 percent, to $264.9 million from $254.6 million. Same-store sales decreased 4 percent, compared with a 0.4 percent increase last year."Our casual assortments were not on trend and certain styles were too similar to our wear-to-work assortments," Richard P. Crystal, chairman and ceo at New York & Co., said on a conference call with analysts. "Additionally, we were disappointed with our activewear category, having stayed too long with sets even as demand shifted to separates. Going forward, our casual assortments will provide greater differentiation as compared to our wear-to-work offerings. We are updating our activewear offerings currently to include knit separates that can be worn together or with the balance of our casual assortment." The company expects its full-year income to range from 70 to 82 cents per share.

Bebe Stores Inc. posted an increase in fourth-quarter earnings to $22.1 million, or 24 cents a diluted share, from $19.5 million, or 21 cents, in the prior year. This includes a 2-cent per share charge related to the expensing of stock-based compensation and the negotiated legal settlement.

For the three months ended July 1, sales were up 11.2 percent, to $152.2 million from $136.9 million last year. Total same-store sales increased slightly, 3.5 percent compared with a 34.2 percent jump in the year-ago period.

For the 2006 fiscal year, earnings grew 11.3 percent, to $74 million, or 79 cents a diluted share, from $66.3 million, or 71 cents, at the end of last year. Sales rose 13.7 percent, to $579.1 million for the year, from $509.5 million reported for 2005.

The company expects earnings in the range of 17 to 21 cents per share for the first quarter of fiscal 2007.

In accessories, the teen costume jewelry retailer Claire's Stores Inc. said its second-quarter earnings rose 1 percent, slightly exceeding company guidance.

"Now that we can look back on the second quarter, we would categorize it as good but not stellar," said Maria L. Schaefer, co-chairman and co-ceo at Claire's, during a conference call. "Our customers are certainly shopping, but they were not [drawn in] by a major fad like one we enjoyed last year when bohemian was all the rage. Since trends of that magnitude rarely occur two years in a row, the subsequent year is always challenging."For the three months ended July 30, net income rose to $36 million, or 37 cents a diluted share, from $35.5 million, or 36 cents, in the year prior. Sales climbed 7 percent, to $349.2 million from $325 million. Total same-store sales for the quarter increased 2 percent on top of a 5 percent increase last year.

The company said it believes its merchandise is on target for the back-to-school season, and it is focusing on building strong operations internationally after logging negative comps in Europe for the quarter.

The company expects earnings for the year will reach $1.90 to $1.95 per share.

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