Hurt by sluggish sales, Bebe Stores Inc. posted a 35.4 percent drop in third-quarter earnings that was in line with Wall Street expectations.

This story first appeared in the May 2, 2008 issue of WWD.  Subscribe Today.

For the three months ended April 5, earnings fell to $8.3 million, or 9 cents a share, from $12.9 million, or 14 cents, in the year-ago period.

Sales for the quarter dipped 1.7 percent to $151.7 million from $154.4 million, while total same-store sales fell 7.6 percent.

For the nine-month period, earnings slipped 18.3 percent to $47.1 million, or 51 cents a diluted share, from $57.6 million, or 61 cents, last year. Sales grew 1.6 percent to $516.1 million from $508.2 million.

The company expects fourth-quarter earnings in the range of 15 cents to 19 cents a diluted share.

During the quarter ended April 5, the company said it opened four stores, including three Bebe stores and one Bebe Sport store. It closed four Bebe stores, where leases had expired and were not renewed, and expanded one existing Bebe store, resulting in total square footage growth of 1 percent, the company said.