Charming Shoppes Inc. said Wednesday that it offset weakening sales with better merchandise margins and posted a lower-than-expected fourth-quarter loss.
This story first appeared in the March 19, 2009 issue of WWD. Subscribe Today.
In the three months ended Jan. 31, the nation’s largest operator of plus-size apparel stores recorded a net loss of $108.5 million, or 94 cents a diluted share, compared with a net loss of $124.4 million, or $1.07 a share, in the year-ago quarter. Excluding discontinued operations and aftertax charges of $69.5 million related to restructuring and goodwill and store impairment assessments, the loss came to 34 cents a share, 4 cents lower than consensus estimates.
Quarterly revenue slid 13.7 percent to $631.9 million from $731.8 million. Comparable-store sales fell 15 percent for the quarter. Comps were down 17 percent at Lane Bryant, 14 percent at Fashion Bug and 11 percent at Catherine stores.
The company said it anticipates a first-quarter loss between 3 cents a share and 7 cents a share, excluding special charges. Analysts project a loss of 6 cents a share for the period.
The combination of the results and guidance helped lift Charming’s shares 31 cents, or 26.1 percent, to $1.50 Wednesday.
Describing the retail environment and results as “challenging,” Alan Rosskamm, chairman and interim chief executive officer, said on the earnings call that the firm had “a lot of good forward momentum, and my feeling is that, at least at Charming, the glass here is half full.”
Charming, which said it would close about 100 stores in 2010, is discontinuing Figure magazine and the shoetrader.com Web site. Fashion Bug is pursuing a lower pricing model and is targeting a 35-year-old larger misses and plus-size customer after eliminating its junior and girls’ departments.
For the year, the Bensalem, Pa.-based company reported a net loss of $244.2 million, or $2.13 a share, versus a loss of $83.4 million, or 68 cents a share, in 2007. Net sales slid 9.1 percent to $2.47 billion.