NEW YORK — Shares of Bebe Stores Inc. got hammered Friday after the retailer said its third-quarter earnings results would fall well below Wall Street’s estimates.
Bebe shares were off $2.34, or 16.3 percent, to close at $12.01 in Nasdaq trading, hovering above its 52-week low of $9.58, reached Oct. 7.
Late Thursday, Bebe said it expected earnings of between 3 to 5 cents a share for the quarter ending March 31, below consensus estimates of 11 cents, according to First Call. The Brisbane, Calif.-based specialty retailer said it also anticipates the period’s same-store sales to decrease in the low- to midteens, versus the negative high-single-digit comp decrease it previously forecast.
"Sales have been negatively impacted by a lack of balance in our assortment and lean inventory levels," John Kyees, Bebe’s chief financial officer, said in a statement. "While gross margin is currently higher than the prior year, the margin is lower than our plans due to higher markdowns and higher manufacturing costs."
Downgrading the stock to "hold" from "buy," Wedbush Morgan Securities analyst Adrienne Tennant said she believes the company’s inventory issues continue to plague sales. "At the end of February, the company’s inventory was up 7 percent, but down 13 percent to its internal plan, she wrote in a research note. "We have started to see more suiting and sophisticated merchandise, but not in the depths required to create a full assortment."
In addition, she said, the Far East sourcing initiative is taking longer than anticipated. She said Bebe planned to have a substantial portion of its manufacturing capacity issues resolved by its fiscal fourth quarter, but now believes that by then, the company will only be running production overseas in a "test capacity" mode, rather than producing at or near full production levels.
Bebe named Paul Mashouf vice president of sourcing on March 5 following the December departure of Jamel Bennoui, vice president of manufacturing, "to pursue other opportunities."
“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