• Q3 net loss fell 42.3%
  • Sales decreased 16.8%
  • E-commerce sales increased 6%

Plus-size women's wear retailer Charming Shoppes reported a narrowed net loss for the third quarter, as it set out to reduce inventories.

The company said that third quarter net loss fell 42.3% to $48.4m during the period.

Jim Fogarty, president and chief executive officer of Charming Shoppes, said: "During the quarter, we closed on the sale of our private label credit operations, significantly bolstering our liquidity and leverage profile. At the end of the quarter, liquidity totalled $421m and our leverage reflected debt, net of cash, of $14m.

"In our 'Grow Profitable Revenue' pursuit, as we previously indicated, we came into the third quarter with much less seasonal carry-over inventory. Throughout the quarter we avoided the impulse to solely drive sales and we remained focused on profitable revenue.

"While our gross margin rate improved 560 basis points, our gross profit decreased 7% as rate improvement did not fully offset our sales declines."

Third quarter net sales for the three months ended 31 October decreased 16.8% to $460.2m, primarily as a result of a comparable store sales decrease of 13% and the impact of 125 store closings and 10 store openings during the last four quarters.

E-commerce sales increased 6% to $21.7m, compared to $20.5m in the year ago period. Same-store sales declined 14%, 14% and 5% at the company's Lane Bryant, Fashion Bug and Catherines brands, respectively.

Selling, general and administrative expense decreased $30.9m, or 18.6% to $135.5m in the third quarter, compared to $166.3m in the same quarter last year.

During the third quarter the company decided to close its Petite Sophisticate Outlet stores and convert the majority of the space to Catherines outlet locations. Five stores have already been converted, with an additional 28 stores to be converted to Catherines outlet locations by February 2010.

Click here to view the company's full third quarter earnings statement.