LOEHMANN’S EXPECTS NET TO HIT ANALYSTS’ ESTIMATES
NEW YORK — Citing controls on expenses and margins, Loehmann’s Inc. said Wednesday that it expects to report fourth-quarter earnings of $1.3 million, or 14 cents a share, in line with analysts’ estimates.
In the year-ago period, Loehmann’s lost $500,000 on an adjusted basis.
This year, off-pricers have been reporting very respectable numbers, indicating that consumers may be shifting to off-pricers for brands and designer labels and away from discounters, which generally don’t carry many major brands.
Burlington Coat Factory Warehouse reported same-store sales rose 10.2 percent in the second quarter ended Dec. 28, and total sales gained 12.7 percent. Dress Barn said its January same-store sales rose 29 percent.
However, at Loehmann’s, same-store sales for the three months ended Feb. 1 fell 5.4 percent, while total sales rose 13.3 percent to $108.6 million from $95.8 million a year ago.
The company adjusted its fourth-quarter reporting period from the 14 weeks ended Feb. 3, 1996, to the 13 weeks ended Jan. 27, 1996, to make the periods comparable.
Weak same-store sales results were attributed to a shortage of inventory and earlier promotions in December because of the shorter holiday selling period. The inventory shortage resulted from three store openings in October and November that were stronger than anticipated.
However, for the year, same-store sales rose 1.7 percent, slightly ahead of plan.
Robert N. Friedman, chairman and chief executive officer, said in a statement that the company has “taken the necessary steps to insure an adequate supply of inventory for the opening of our new stores going forward.”
Friedman added that through “careful expense controls and tightly controlled promotional costs, we were able to protect our gross margins and profits and expect to achieve earnings in line with analysts’ estimates for the quarter.”
Looking ahead, the company expects growth to be fueled by the continued expansion of its new large-format stores — 25,000 to 35,000 square feet — which typically generate higher profits and sales. Loehmann’s older stores average 15,000 square feet.
In 1996, Loehmann’s opened seven large stores, which are performing ahead of plan, and plans to open seven or eight more this year. Its New York City flagship, on 16th Street and Seventh Avenue, has about 60,000 square feet.
Loehmann’s operates 73 stores in 23 states.