NEW YORK — Charlotte Russe Holding Inc. said this spring’s feminine styles in bright colors, which hit its floors in early March, parlayed into second-quarter profits as well as the retailer’s first same-store sales increase in three years.
“We are clearly still in the early stages of sales improvement,” said Mark Hoffman, chief executive officer, adding he was pleased with inventory management forged by the merchandise and planning teams.
The San Diego-based retailer, which operates 335 stores under the Charlotte Russe and Rampage nameplates, and which offers fashion-forward clothes at more value prices, said income for the three months ended March 27 was $11,000. Earnings per diluted share broke even. Results were on par with the firm’s previously raised estimates. In the same period last year, the company reported a loss of $4.9 million, or 23 cents. Excluding the impact from Charlotte’s Room closure, diluted earnings improved to a loss of 1 cent from a loss of 7 cents.
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Sales for the quarter jumped to $118.8 million, a 27.6 percent increase over last year’s $93.1 million. Comparable-store sales rose 3.5 percent, which compares with a 11.6 percent decline in the previous year.
Sales reflect aggressive markdown activity in January as well as a positive response to spring merchandise. Results were also bolstered by stockkeeping unit reductions. Hoffman said key spring items include ponchos, miniskirts and short skirts and Capri pants. He said the firm is also seeing higher order rates. Hoffman said accessories, which are better coordinated with its apparel fashion, are now performing strongly.
Management also expressed confidence in its merchandising initiatives, which include a new general merchandise manager at each division — Brad Cunningham at Rampage and Donna Desrosiers at Charlotte Russe.
For the first half, earnings grew 159.3 percent to $6.6 million, or 28 cents a diluted share, from $2.5 million, or 11 cents in the same period last year, while sales rose 18.4 percent to $268.1 million from $226.4 million, and comps declined 2.8 percent.
— Jennifer Weitzman