BEBE NET JUMPS 31% IN QUARTER
Byline: Jennifer Weitzman
NEW YORK — Contemporary retailer Bebe Stores reported fourth-quarter profits raced up 31 percent, as a return to its edgier fashion past helped boost comparable-store sales and gross margins.
By broadening and fine-tuning its merchandise to better appeal to customers seeking current fashion trends for both work and evenings, earnings headed north this quarter, improving to $5.8 million, or 22 cents a share, for the quarter ended June 30, against earnings of $4 million, or 16 cents, in the corresponding period last year. Sales for the Brisbane, Calif.-based retail group jumped 28.8 percent, to $69.7 million from $54.1 million, while comps rose 6.7 percent, exceeding plan.
This marks the first time since the third quarter of 2000 in which Bebe reported improved year-over-year profits.
Inventory ended the quarter down 3 percent per store from last year and down 10 percent on a per-square-foot basis, in line with plans. In addition, markdown selling was lower than last year.
John Parros, president and chief operating officer, who came on board from Saks Inc. in December, said on a conference call that merchandise efforts over the past six months focused on delivering a more balanced assortment to address the full breadth of its customers’ lifestyles.
“The merchandise evolved and the customer responded to the change,” Parros said.
By segment, product licensing revenue generated $235,000 in the quarter, mostly on strong results in swimwear and footwear. Sales in its e-commerce division increased 110 percent during the quarter. July comps are expected to be up in the mid- to high-single digits.
During the quarter, Bebe opened eight stores for a total of 146, and it plans to open another five in the first quarter. In 2002, it expects to open 25 to 30 doors.
For the full year, earnings fell 5.4 percent, to $27.8 million, or $1.08 per share, compared to earnings of $29.4 million, or $1.17; while sales improved 20.3 percent, to $290.8 million from $241.8 million.