5 MORE CHAINS POST GOOD RESULTS
NEW YORK — It’s continuing to look good for retailers.
On Wednesday, in another flurry of solid third-quarter reports, Loehmann’s Inc. said store openings lifted figures, while Talbots Inc. said updated fashions and a good showing at its catalog business helped pull the business out of a deep rut.
Wet Seal Inc. and Paul Harris Inc. said private labels spurred gains. Cato Corp. narrowed its loss in the quarter, and although Gantos Inc. fell into the red, both companies said inventories are well positioned for strong holiday sales.
On Tuesday, Dayton Hudson Corp., Ann Taylor Stores Corp., The Limited Inc. and Intimate Brands all posted robust third-quarter figures. And before that, Federated Department Stores Inc.; Sears, Roebuck & Co.; Neiman Marcus; Gap Inc.; Abercrombie & Fitch; May Co.; Mercantile Stores Co. Inc., and others came through with rosy report cards, bolstering a positive outlook for the holiday season and fostering a feeling that retailing seems to be turning around.
At Loehmann’s, third-quarter profits, adjusted for its initial public offering in May, advanced 35.7 percent to $3.8 million, or 40 cents a share. The quarter included a $1.1 million charge for preopening expenses for new stores. In the year-ago quarter, adjusted for the IPO, profits came to $2.8 million, or 30 cents.
In the latest quarter, unadjusted net income after preferred dividends increased to $6.3 million, or 66 cents, from $2.5 million, or 48 cents.
Sales climbed 15.1 percent to $114.4 million from $99.4 million, and same-store sales were up 2.4 percent.
Robert N. Friedman, chairman and chief executive officer, said in a statement that Loehmann’s sales and earnings growth reflects strong performances in existing stores as well as six new stores opened since the beginning of the year. During the quarter, the firm opened four large-format stores in San Diego; Paramus, N.J.; Boston, and Manhattan.
“Initial customer response to the new store openings has been very positive, which we believe is evidence of consumer demand for our unique retailing concept,” said Friedman.
In 1997, the off-price retailer expects to open at least seven stores in new and existing markets.
In the latest quarter, after a $7.1 million charge for early debt repayment and preferred dividends, Loehmann’s posted a net loss of $3.4 million. In the year-ago quarter, the company lost $13.6 million after preferred dividends.
Sales advanced 8 percent to $309.2 million from $286.3 million.
At the Hingham, Mass.-based Talbots, profits crept up 1.8 percent to $19.8 million, or 60 cents a share, slightly ahead of Wall Street estimates of 59 cents.
In the year-ago period, Talbots earned $19.4 million, or 57 cents.
Sales in the latest quarter rose 10.1 percent to $247.5 million from $224.8 million. Retail sales gained 10 percent to $199.2 million from $181.5 million, but same-store sales dipped 1.7 percent. Catalog sales moved up 12 percent to $48.3 million from $43.3 million.
Arnold B. Zetcher, president and ceo, said the same-store performance reflects lower-than-expected levels of traffic.
“In response to these trends, we maintained tight cost controls to protect our profitability, and we plan to continue this tight expense approach through the balance of the year,” Zetcher added.
By the end of fiscal 1996, Talbots will have opened 75 new stores for a total of 535 stores. During the quarter, the company opened 30 stores, 11 misses’ stores, 11 petites stores, three children’s stores and five accessory and shoe stores.
In Talbots mail-order operation, Zetcher said, all four fall catalogs performed above plan during the quarter. “We believe this is an indication that our new merchandise is being accepted by customers.”
In the nine months, Talbots earnings slid 4.4 percent to $47.1 million, or $1.42 a share, from $49.3 million, or $1.43.
Sales increased 4.9 percent to $715.8 million from $682.3 million. Retail sales were up 6 percent to $586.6 million from $553.8 million, but same-store sales decreased 3.8 percent. Catalog sales were up only 0.5 percent to $129.2 million.
Wet Seal, benefiting from the strong junior market, more than doubled its profits to $4.2 million, or 30 cents, well ahead of average Wall Street estimates of 24 cents a share. In the year-ago period, Wet Seal earned $1.8 million, or 15 cents.
Sales in the latest quarter rose 7.8 percent to $95.6 million from $88.7 million, and same-store sales gained 10.5 percent.
“Our private label brands, such as Blue Asphalt and Evolution, were extremely well received by our customers,” said Kathy Bronstein, vice chairman and ceo of the Irvine, Calif.-based 365-unit chain. “We are well positioned for a successful holiday season with new and exciting merchandise.”
Cato, which operates 694 women’s apparel stores, narrowed its third-quarter loss to $899,000 from a loss of $1.5 million a year ago. Sales rose 2.2 percent to $108.1 million from $105.8 million, while same-stores sales dropped 2 percent.
Wayland H. Cato, chairman and ceo, said in a statement that margins were hurt by heavy markdowns due to excess inventories after weak back-to-school selling. The firm opened 10 stores, including nine last quarter. Cato stores are called Cato Fashion/Cato Plus and It’s Fashion!
Although Gantos reported a third-quarter loss of $275,000, the company said inventories are in line and that it is well prepared for the holidays.
In the year-ago quarter, the Grand Rapids, Mich.-based chain earned $127,000, or 2 cents a share. Sales eased 0.8 percent to $41.7 million from $42.1 million.
Arlene Stern, president and ceo, said in a statement that although results for the quarter were off from last year, year-to-date results are running slightly ahead. Additionally, Stern noted that expenses were held down to help offset the reduced gross margin.
Looking ahead, Gantos, with 114 stores, has strengthened its inventories and is well positioned for the “all-important Christmas season,” Stern said.
Significant year-to-year gross margin improvements and strong performances at 16 new stores pushed Paul Harris Stores’ third-quarter earnings to $1.8 million, or 17 cents a share, against a year-ago loss of $612,000.
Sales rose 23.1 percent to $45.4 million from $36.9 million. Same-store sales gained 22 percent.
In a statement, ceo Charlotte G. Fischer said the company’s broadened merchandise mix contributed to a 55 percent increase in gross profit. The results were led by the new Paul Harris Denim and PH Sport collections, both private labels, and accessories, she said.
Gross margins improved to 39.8 percent of sales from 31.5 percent a year ago, and selling, general and administrative expenses remained flat at 31 percent.
On Wednesday, Loehmann’s closed up 1 to 29 and Wet Seal closed down 2 3/8 to 26 in over-the-counter trading. Talbots closed up 1 to 26 1/2 on the New York Stock Exchange.