NEW YORK — Claire’s Stores Inc., a low-price jewelry and accessories retailer, reported its third-quarter profits more than doubled.
This story first appeared in the November 24, 2003 issue of WWD. Subscribe Today.
Concurrently, the company said its board elected Bonnie Schaefer and Marla Schaefer, Rowland Schaefer’s daughters, as co-chairmen and co-chief executives. Their father, currently chairman, president and ceo, won’t extend his current leave of absence beyond its November expiration and will instead become chairman emeritus.
The Pembroke Pines, Fla.-based company, which operates a fleet of 2,850 stores under the Claire’s and Icing nameplates, said income for the quarter ended Nov. 1 increased 104.3 percent to $25.3 million, or 51 cents per diluted share, which included a one-time benefit of 4 cents from a tax examination that was settled more favorably than expected. Analysts on average were expecting Claire’s to report earnings of 47 cents, according to First Call. Last year, income was $12.4 million, or 25 cents. Sales climbed 14.8 percent to $264.1 million from $230 million, and were elevated 8 percent on a same-store basis.
“Our business has continued to deliver upon the momentum that began building earlier this year,” Marla Schaefer said in a statement. “Jewelry continued to outpace accessories, a trend that helps our bottom line due to the higher margins associated with jewelry products.”
Rowland Schaefer will receive annual payments for five years as well as certain other benefits, and is entitled to exercise outstanding stock options within a specified period. The company said the total cost of the agreement was valued at between $8 million and $11 million. The aftertax charge will be 11 to 14 cents a diluted share, and will be recorded in the fourth quarter. ?
The firm projected fourth-quarter earnings from continued operations to range between $53 million and $55 million, or $1.09 to $1.12 a share, excluding the impact of Schaefer’s retirement package. Sales are expected to range from $350 million to $354 million, a 9 to 10 percent increase, and should rise 6 percent on a comp basis.
For the nine months, earnings climbed 67.9 percent to $63 million, or $1.28 a diluted share, compared with $37.5 million, or 77 cents. Sales vaulted 13.2 percent to $768.9 million from $679.1 million, and were up 7 percent on a comp basis.
Other specialty retailers reporting results last week:
Poor third-quarter sales kept The Wet Seal Inc. in the red.
For the three months ended Nov. 1, losses for the Foothill Ranch, Calif.-based teen retailer tripled to $7.5 million, or 25 cents a diluted share, compared with a loss of $2.5 million, or 8 cents, last year.
Also, Wet Seal said William Langsdorf had resigned as chief financial officer of the company, effective in January, after a little over a year in the post. As reported, Walter Parks resigned as executive vice president and chief administrative officer of the store in October. Kathy Bronstein was forced out as the store’s chief executive in February and has since been succeeded by Peter Whitford.
Sales for the period dipped 5.8 percent to $136.1 million against $144.5 million last year. Declines in comp-store sales for the quarter expanded to 10.2 percent compared with a decrease of 9.6 percent last year.
Losses were lower than in the previous quarter. Whitford said in a statement, “Leading the way with the most significant improvement was the Arden B. division.” However, Whitford went on to warn that despite positive comp trends in the company’s core Wet Seal division these gains will be “more than offset” by markdowns intended to clear goods for the holiday season.
Comps fell 9.7 percent last month, 10 percent in September and 10.7 percent in August.
For the nine months to date the company reported a loss of $29.5 million, or 99 cents a diluted share, against profits of $9.9 million, or 32 cents, last year.
Sales to date have fallen 13.8 percent to $385.8 million from $447.3 million last year. Comps were down 18.7 percent against a 0.2 percent slide last year. The company plans to shutter a total of 16 Wet Seal and Arden B. stores during the fourth quarter.
New-store sales and robust accessories performance sent results skyward for Aeropostale Inc. in the third quarter.
For the 13 weeks ended Nov. 1, the New York, N.Y.-based teen retailer saw earnings elevate 45.8 percent to $21.9 million, or 56 cents a diluted share, compared with earnings of $15 million, or 39 cents, last year.
Sales for the quarter rose 30.1 percent, to $220.1 million from $169.2 million. Comparable-store sales growth expanded marginally, to 5.2 percent against 5 percent last year.
Double-digit gains in sales of accessories, including dormwear, underwear and bags, led the way. According to Michael Cunningham, senior vice president and chief financial officer, women’s comps rose in the mid-single digit range while men’s were down in the low-single digits.
Julian Geiger, chairman and chief executive officer, credited the positive performance to a strong back-to-school season as well as a robust retail environment. “We do not think the landscape is bleak with an occasional ray of sunshine,” said Geiger in reference to rising traffic levels. “The weather has been conducive to people shopping. We’ve demonstrated that when people people are in the mall, we do a lot of business.”
Ribbon-cutting at 34 new stores during the quarter also helped buoy sales.
For the 39-week period earnings rose 96.3 percent to $26.7 million, or 69 cents a diluted share, against earnings of $13.6 million, or 35 cents, last year.
Sales for the period escalated 34.2 percent, to $462.2 million from $344.5 million last year. Comparable-store sales increases were exactly half of year-ago levels, contracting to 5.4 percent from 10.8 percent last year.
Music-loving teens gobbled up Hot Topic’s rock T-shirts, helping the specialty retailer to score double-digit gains in third-quarter sales and earnings.
The City of Industry, Calif.-based firm said income rose 52 percent to $15.3 million, or 31 cents a diluted share, from $10 million, or 21 cents, in the like period last year.
Overall sales for the quarter increased a solid 31.7 percent to $161.5 million, with same-store sales up 10.8 percent.
Betsy McLaughlin, president and chief executive officer, said on an afternoon conference call that the music-licensed business continued to trend strongly, up 16 percent in the third quarter.
Other merchandise categories also posted solid results. The men’s business increased 21 percent; accessories, up 7 percent, and women’s, up 4 percent. The company, which operates 501 Hot Topic stores and 52 Torrid plus-size units, plans to open 105 new stores in 2004, 80 Hot Topics and 25 Torrids.
James McGinty, chief financial officer, said he expects fourth quarter earnings of 41 cents, compared with 34 cents reported last year, and sales to range between $182 million and $185 million, with low-single-digit same-store sales gains. For fiscal 2004, he said he anticipates income of $57 million, or $1.12, based on a low-single-digit sales increase.
For the nine months, net income rose 41.5 percent, to $25.6 million, or 52 cents a diluted share, from $18.1 million, or 37 cents. Comps advanced 6.8 percent as sales were up 28.1 percent to $377.9 million from $295 million.