NEW YORK — In a week of uninspired activity on Wall Street, the WWD Stock Index closed down 0.2 percent to 1,080.33 from 1,082.62 a week ago, while the broader S&P 500 fell 1.6 percent to 1,110.11 from 1,128.55.
Of the few companies reporting quarterly results last week, The Dress Barn Inc. delivered fourth-quarter and year-end results that showed substantial improvement year-over-year, and investors responded by trading up the firm’s shares 3.1 percent, to $17.86, from $17.32 last week.
The retailer posted net income for the three months ended July 31 of $13.5 million, or 44 cents a share, versus a year-ago loss of $8 million, or 27 cents. Sales rose 10.5 percent to $208 million from $188.1 million, while comparable-store sales rose 1 percent. The reporting period had an extra week versus a year ago. Excluding that week, sales for the comparable 13-week period were $196.3 million.
While results were better than a year ago, chairman Elliot Jaffe said in a statement that the company saw weak demand toward the back half of the quarter, and he attributed the slowdown to higher energy prices, bad weather and ongoing geopolitical concerns.
“These factors could further impact consumer spending going forward,” Jaffe added.
For the full fiscal year, profits more than tripled to $30.1 million, or $1 a share, from $8 million, or 25 cents, last year, while sales gained 6.8 percent to $754.9 million from $707.1 million.
Mark Montagna, analyst at Wells Fargo Securities, is projecting $1.07 in earnings per share for fiscal year 2005. He said in his earnings report that EPS could climb to $1.28, assuming the consummation of a projected $120 million Dutch auction, with shares being offered for $19 to $21.
“The midpoint at that range would put the buyback at six million shares…and would lead us to raise” earnings estimates for 2005, he wrote.
Meanwhile, Christopher & Banks Corp. reported a drop in earnings in the second quarter and the last six months, and the company forecast an 8 percent decline in September comps. The results also triggered an analyst downgrade of the stock.
The Minneapolis-based retailer said Tuesday after the bell that net income in the three months ended Aug. 28 was $5.6 million, or 15 cents a share, matching analysts’ consensus. The results, however, fell 34.3 percent from the $8.5 million, or 22 cents per share, earned in the year-earlier period. Sales in the quarter advanced 7.4 percent to $96.4 million, while same-store sales declined 6 percent.
“The quarter was certainly a disappointment to all of us at Christopher & Banks,” said Bill Prange, chief executive officer, in a post-earnings conference call. He said the impacts from certain merchandise assortment changes had not been realized yet.
On the bright side, the company is encouraged by positive responses in August and September to the merchandising changes, especially in sweaters, said president Joseph Pennington on the call. Response has also been favorable to tests of new yarns and textures, and reorder levels were better this year than last year.
“Experience does tell us the strong early reorders help to drive high levels of full-price selling later in the third quarter and on into the fourth quarter,” Pennington said. The company will issue an outlook on the third quarter in early November.
For the first half of the year, net income came in at $15.8 million, or 42 cents a share, a decrease of 19.8 percent from $19.6 million, or 51 cents, in the first six months of 2003. Total revenue was $199 million, up 8.7 percent, but comps dropped 5 percent.
Following the earnings news, Buckingham Research lowered its investment rating on Christopher & Banks shares to “underperform” from “accumulate.”
WWD Composite Stock Index vs. S&P 500