Byline: Dan Burrows

NEW YORK — New store expansion allowed Charlotte Russe Holding Inc. to post earnings gains in the second quarter even as same-store sales took a tumble.
For the three months ended March 30, the San Diego-based retailer reported a 4.3 percent bump in net income to $3.5 million, or 15 cents a diluted share. That compares with profits of $3.4 million, or 14 cents, in the year-ago period. Earnings per share handily beat Wall Street estimates of 7 cents, as well as the firm’s most recent guidance, which was 5 to 10 cents as of mid-January.
Sales for the quarter improved 34.4 percent to $86 million from $64 million last year, but comparable-store sales slouched 8 percent. The sales gain hinged on Charlotte Russe’s launch of 12 new stores during the quarter in addition to the early Easter holiday. As of March 30, the company operated 224 stores in 29 states and Puerto Rico.
Charlotte Russe also reported it will file a prospectus supplement with the Securities and Exchange Commission with respect to the offering of 3.91 million shares of common stock held by certain affiliates of Saunders Karp & Megrue (SKM). Assuming the sale of all those shares, SKM will continue to own approximately 44.1 percent of the company. Charlotte Russe will not receive any of the proceeds from the sale.
Looking ahead, chief executive officer Bernard Zeichner said in a statement: “We are beginning to go against relatively easier comparisons to the third-quarter results of a year ago. Accordingly, we would advise investors to expect comparable-store sales increases at the low-single-digit level.”
Barring a disruption of current business trends, he pronounced the company “comfortable” with third-quarter earnings-per-share estimates of 24 cents.
For the first six months of the fiscal year, Charlotte Russe reported a 4.6 percent drop in net income to $10.9 million, or 46 cents a diluted share, compared with $11.4 million, or 49 cents, last year. Sales grew 26.1 percent to $198 million.

load comments
blog comments powered by Disqus