US: Charlotte Russe boosts Q3 income by 6%
Speciality retailer Charlotte Russe posted third quarter income from continuing operations before income taxes of US$16.7m, an increase of 6.0%.
The quarter's results included a $1.1m non-recurring write-off associated with the implementation of a new POS system, the company said. Net sales for the third quarter increased 12.2% to $180.3m and same-store sales increased 1.3% during the quarter compared to an increase of 18.2% for the third quarter of fiscal 2006.
Net sales for the first nine months increased 11.7% to $550.6m, while income before taxes for the first nine monthperiod was up 11.5% to $45.3m.
Charlotte Russe chief executive officer Mark Hoffman said: "We are pleased that we achieved our eighth consecutive quarter of positive comparable store sales growth. However, earnings per share for the quarter were slightly below our original expectations. While we continued to make progress on product level gross margin expansion, sales were below plan in June.
"The recent slow down in consumer spend and traffic that began in June and has continued through July is the basis for our sales guidance for the fourth quarter of flat comparable store sales. This guidance assumes an improvement in consumer spend and traffic consistent with the calendar shifts for back-to-school. Therefore, we are projecting August and September to deliver low single digit comparable store sales increases resulting in a flat comparable store sales increase for the fourth quarter. With that said, our merchandise assortments are fashion and trend right. Our inventory aging and productivity trends continue to deliver significant improvements. We believe that we have focus on the right strategies to continue to deliver success."
The company forecasted flat comparable store sales for the fourth quarter of fiscal 2007 with diluted earnings per share from continuing operations of $0.34 to $0.37.
The company's third quarter statement was reclassified to reflect all Rampage stores as a discontinued business, it added.
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