For some specialty retailers, the news on the earnings front could have been better last week.

Internet retailer Bluefly Inc. widened its fourth-quarter loss due to an inventory write-off.

For the three months ended Dec. 31, the company posted a loss of $5.6 million, or 4 cents a share, from a loss of $3.5 million, or 3 cents, in the year-ago period. Sales for the quarter grew 9.7 percent to $29.7 million from $27.1 million.

For 2007, Bluefly reported a loss of $15.8 million, or 12 cents a share, compared with a loss of $12.2 million, or 23 cents, in 2006. Sales jumped 18.7 percent to $91.5 million from $77.1 million.

“The operational issues that we experienced as a result of our move to our new third-party distribution center coupled with the overall slowdown in the retail environment led to disappointing fourth-quarter results, especially after the strong first half we had in 2007,” Melissa Payner, chief executive officer, said. She added that while the inventory write-off had a negative impact on gross margins during the quarter and for the year, “we believe that it better positions our business for 2008.”

Although specialty retailer Citi Trends Inc. posted a 19.2 percent drop in fourth-quarter earnings from a year ago, it was still better than analysts had expected.

For the three months ended Feb. 2, earnings fell to $8.4 million, or 59 cents a diluted share, from $10.4 million, or 73 cents, in the same year-ago quarter. Analysts had expected a profit of 53 cents. Sales for the quarter increased 6.1 percent to $134.6 million from $126.8 million, while total same-store sales slumped 1.1 percent.

In fiscal 2007, earnings declined 33.4 percent to $14.2 million, or $1 a diluted share, from $21.4 million, or $1.51, a year ago. Sales rose 14.6 percent to $437.5 million from $381.9 million.

Lyn Rhoads Walther, senior analyst at Wachovia Capital Markets, said management has made a number of significant changes to turn around the business, including clearing excess inventory, planning more conservatively and installing surveillance cameras to reduce theft.

Charlotte Russe Holding, Inc. updated its second-quarter earnings guidance and outlook for the third quarter. The value-priced chain for young women said a tax benefit will boost second-quarter profits, bringing earnings in the range of 15 to 18 cents a diluted share. It previously predicted earnings per diluted share at between 12 and 15 cents.

This story first appeared in the March 31, 2008 issue of WWD. Subscribe Today.

However, the negative impact of the Easter shift, as well as the harsh macroeconomic environment, will hurt the retailer’s third quarter. Management said it expects earnings in the range of 27 to 30 cents a diluted share, and flat-to-low single-digit negative comp sales. Analysts expected a profit of 41 cents.

“Charlotte Russe had been one of the few standouts in a difficult environment as it continued to generate positive comps and meet earnings expectations, but it is now also starting to feel the impact of the waning consumer,” Walther said.