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Casual Male Net Hurt by Sluggish Economy

Casual Male Retail Group Inc. posted second quarter results that reflected continued weakness in the economy.

NEW YORK — Casual Male Retail Group Inc. on Thursday posted second quarter results that reflected continued weakness in the economy.

For the three months ended Aug. 2, income fell by 23.7 percent to $1.9 million, or 5 cents a diluted share, from $2.5 million, or 6 cents, a year ago. Sales were essentially flat at $113.5 million for the current quarter and for the year-ago figure. Comparable store sales increased .3 percent.

For the six months, income dropped by 44.9 percent to $2 million, of 5 cents a diluted share, from $3.6 million, or 8 cents, in the same year-ago period. Sales dipped by 1.4 percent to $221.1 million.

“Despite the continued weakness in the economy and in the men’s apparel business, we saw an improvement in our sales performance trends this past quarter. Although overall store traffic continues to be down, our conversion rates and average sales transactions are up, which indicate to us we are executing well in this difficult retail environment,” said David Levin, president and CEO.

In a conference call, Levin noted that the company is “starting to see significant improvement” in the Rochester division with strength in men’s contemporary collections such John Varvatos, Michael Kors, and Robert Graham. “ Additionally, the stores have reintroduced Cutter & Buck after a hiatus and fall receipts “seeing solid Results,” he said.

At the Casual Male XL division, Levin singled Reebok Golf apparel, a new category for the company, as well as shorts and screen Ts as strong sellers. Core basics “continued to struggle as newness continues to perform quite well,” he said.

Levin also believes the prospects are bright for its newly launched social networking site, BoldXL, that debuted last week.

“We continue to connect with our customers through focus groups and surveys, and what we find is that the younger, specifically 18-to-30-year-old, big and tall guys are still reticent to shop where their father shops. Our surveys conveyed that 84 percent of our customers are currently engaged in social networking on the Internet and over 50 percent responded that they would be interested in a social networking venue like BoldXL. The site we have created is a combination of a social environment where big and tall man can engage in blogging about issues, such as what seats on which airlines have the most legroom, and at the same time, a retail environment that is more conducive to the buying habits of a younger customer.”

Long-term, Levin said BoldXL may “one day lead to a store concept, but there are currently no plans in that regard at this time.”

The company said it has revised its earnings guidance for fiscal 2008 to $0.22 to $0.27 per diluted share, a decrease of $0.03 per diluted share from prior guidance, based on an estimated total sales level of $470 to $475 million.