Charming Shoppes Inc. posted a better than six-fold profit increase in profits for the first quarter, with improved gross margins and lower expenses offsetting a modest sales decline.
Earnings rose to $26 million, or 22 cents a share, from $3.9 million, or 3 cents, a year earlier. Sales slipped 0.1 percent to $504.4 million from $504.8 million with a 2 percent rise in comparable-store sales.
Gross margins rose to 56.6 percent of sales from 54.8 percent a year earlier and selling, general and administrative expenses were trimmed to 30.8 percent of sales from 31.5 percent.
Anthony Romano, president and chief executive officer, said the operating improvement was driven by “a more fashionable apparel assortment and aggressive inventory management.”
“Our spring assortments of both core and fashion apparel are resonating with our customer, as evidenced by our increased conversion rates,” he said. “However, traffic levels were down on a year over year basis and were below our expectations, particularly in the back half of the quarter. We did not see the typical sales and traffic builds leading up to the Easter holiday. In response, we will be more aggressive with our marketing efforts in an attempt to drive additional traffic to our stores and Web sites.”
The Bensalem, Pa.-based firm operates 1,989 stores under the Lane Bryant, Fashion Bug, Catherine Plus Sizes and associated banners.