Bebe’s boho collection continues to hurt the company’s results as the specialty chain reported fiscal first quarter 2016 earnings per share as a loss of 22 cents, which was more than the FactSet estimate for a loss of 16 cents a share.
The retailer reported a net loss of $17.1 million, compared with a loss of $10.8 million in the same period a year ago, which included a loss from discontinued operations of $1.8 million.
Net sales for the quarter were $96.3 million, also shy of the FactSet estimate of $97.7 million. Comparable-store sales for the quarter decreased 4.1 percent versus last year’s increase of 0.7 percent. The company has been working through inventory that was not in line with its customers’ style.
Jim Wiggett, chief executive officer, said, “Our first-quarter performance reflects the continuation of a challenging retail environment in addition to soft sell-through in our boho collection. This led to an increase in our promotional activity as well as higher markdowns resulting in reduced gross margin. While sales trends briefly turned positive in September, driven by markdown merchandise and positive response to the fall collection, we saw a downturn in comps as a result of poor product acceptance coupled with inventory cancellations for October deliveries as we shift our product focus.
Looking ahead to the second quarter, the company expects comparable same-store sales to be in the negative high-single-digit range. The net loss per share will be in the range of 6 cents to 12 cents. FactSet had estimated that the second quarter would result in a gain of 1 cent, making the guidance lower than anticipated. The company is closing 30 stores in fiscal 2016 and will focus on expanding the wholesale and international businesses.
Bebe had warned that the quarter would not be good as it got rid of the boho style that its customers did not like. The company said it has worked to reduce the time between design to store delivery and has cut it by 30 percent. It has also developed a fast track version in order to be more like fast fashion in some styles.
The stock has plunged more than 66 percent over the past six months to 94 cents.