Hampered by the impact of a strong dollar as well as store closures, Claire Stores Inc. reported weaker second-quarter sales, but narrowed its loss.
Net sales fell 8 percent to $347.6 million from $377.8 million in the same period last year as the loss narrowed to $18.9 million from $20.6 million.
The company, which targets women, tweens and teens with fashion accessories and jewelry, said the top-line decrease “was attributable to an unfavorable foreign currency translation effect of our non-U.S. net sales, the effect of store closures and a decrease in same-store sales, partially offset by new store sales and increased shipments to franchisees.“
Consolidated comparable-store sales declined 1.7 percent with Europe showing a 5.2 percent decrease and comps in North America rising 0.7 percent. “Net sales would have decreased 1.3 percent, excluding the impact from foreign currency exchange rate changes,” the company said in its report.
The company noted that gross margins declined 130 basis points in the quarter to a rate of 48.5 percent. Again, currency issues impacted results. “This reduction in gross profit percentage consisted of a 150-basis-point decrease in merchandise margin, partially offset by a 20-basis-point decrease in buying and buying-related costs,” the company stated. “The decrease in merchandise margin percentage resulted primarily from unfavorable foreign currency exchange rates and higher freight costs.”
The company’s adjusted earnings before interest, taxes, depreciation and amortization came in at $59.9 million, which compares to $64.5 million in the prior year. Carving out the impact of foreign currency exchange issues, the company said adjusted EBITDA would have been $64.9 million.
The company operates in 46 countries via 2,610 company-run stores as well as 130 stores-within-a store and 442 franchised units.
The firm is offering promotions for the back-to-school season, which includes $1 clearance sales on selected items in stores and on its Web site as well. The company is also promoting backpacks on its site in fake leather, loud print designs and packs with frilly trim — with price points between $15 and $30, and a buy one, get the second for $5.