Charming Shoppes Inc. offset double-digit sales declines with comparable reductions in expenses and markdowns, helping to reduce its third-quarter loss.
The Bensalem, Pa.-based company, which caters to plus-size women, said Wednesday for the period ended Oct. 31, its net loss shrank to $48.4 million, or 42 cents a diluted share, versus a loss of $59.9 million, 52 cents, in the year-ago period. Excluding a tax provision, the loss was 37 cents a share.
The impact of 115 store closings and a 13 percent dip in same-store sales brought net sales down 16.8 percent to $460.2 million for the quarter versus $553.1 million in the year-ago period. Gross margin improved to 51.5 percent of sales from 45.9 percent in the 2008 quarter.
Yahoo Finance said analysts anticipated a smaller loss — 13 cents — on higher revenues of $486 million.
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Sales at Lane Bryant fell 15.2 percent to $218 million, as revenue at Fashion Bug slumped 18.9 percent to $155 million. Revenue at Catherines dipped 3.9 percent to $71.3 million, while catalogue sales and other sales declined 56.3 percent to $9.4 million and 30.1 percent to $6.5 million, respectively.
Selling, general and administrative costs were reduced 18.6 percent to $135.5 million and the cost of goods sold fell 25.3 percent to $223.4 million. The spending cuts helped shares of the firm move up 4 cents, or 0.8 percent, to $4.84 in Nasdaq trading Wednesday.
“We improved our quality of sale, but we should have delivered more profitable revenue with regard to our…merchandise assortments,” president and chief executive officer Jim Fogarty said on the company call. “We had relative strength in accessories and intimates, but we did not provide our customer with a strong enough core tops and bottoms assortment….We did not have a strong enough entry-priced assortment.”
The company said its spring and summer collections were designed to fix that problem and would deliver improved value “through both lower average ticket prices and an increase in planned targeted product promotions.”
The retailer said for the nine months, its net loss declined to $49.9 million, or 43 cents a diluted share, from $66.4 million, or 58 cents a share, a year earlier. Net sales decreased 17.2 percent to $1.53 billion, from $1.84 billion.
Charming Shoppes said it has closed 83 stores this year, and plans on shuttering roughly 80 stores in the fourth quarter. The company operates 879 Lane Bryant retail and outlet stores, 848 Fashion Bug and Fashion Bug Plus stores, 463 Catherines stores and 37 Petite Sophisticate outlet stores.