Accessories and jewelry retailer Claire’s Stores Inc. reported a rise in preliminary fourth-quarter profit on revenue that increased on both a net and comparable-store basis.


In a regulatory filing with the Securities and Exchange Commission, the Hoffman Estates, Ill.-based firm said that for the period ended Jan. 29, it expects adjusted earnings before interest, taxes, depreciation and amortization, excluding other costs, to be between $96 million and $98 million, compared with $93.4 million in fourth quarter last year.


Claire’s, which anticipates reporting finalized results before April 29, said net sales should total $422 million, which would be an increase of 2.7 percent for the quarter.


Comps are expected to increase 3.2 percent, helped by a 4.7 percent comp increase in North America. Comps in Europe are projected to improve 0.6 percent.


For the year, adjusted EBITDA is expected to be between $263 million and $265 million, versus $233.9 million in 2009. Sales are projected to total $1.43 billion, or increase 6.3 percent over last year.


The company said its cash and cash equivalents totaled $255.9 million at the end of quarter, and its total debt equaled $2.52 billion. Despite the heavy debt load, Moody’s Investors Service in December upgraded Claire’s corporate family and probability of default ratings to “Caa2” from “Caa3.”, in December. The rating outlook was also revised to positive from stable.


“The upgrade reflects a decrease in Claire’s probability of default given that the company can now fully cover its interest expense,” according to Moody’s. “This is due to earnings improvement from solid comparable-store sales growth, improved merchandise margins and continued expense discipline.”
Apollo Management acquired Claire’s for $3.1 billion and took it private in 2007.

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