US: Charming Shoppes Q1 profit stumbles on lower sales
First quarter profit at Charming Shoppes Inc has slumped as fewer customers visit its stores, prompting the women's plus-size apparel retailer to forecast weak second-quarter results.
For the 13 weeks to 3 May, income from continuing operations fell to $0.7m, or $0.01 per share, from $26.5m, or $0.20 per share a year earlier.
The results include charges of $2.2m, or $0.02 per share, for consolidation and streamlining initiatives, and $2.4m, or $0.02 per diluted share, on legal fees to settle a proxy contest with dissident shareholders.
Losses from discontinued operations were $35.1m or $0.30 per share, including a loss of $28.4m on the planned sale of its non-core misses catalogue businesses.
Net sales from continuing operations were down 8% to $641.3m, from $696.6m last time.
Retail store sales were down 10% to $614.9m, while comparable store sales dropped 13%. By brand, same-store sales at Lane Bryant and Fashion Bug fell 12%, and were down 16% at Catherines Stores.
The company's direct-to-consumer segment saw sales more than double to $26.9m from $10.3m.
Dorrit J Bern, chairman, chief executive officer and president, said the disappointing sales performance was "impacted by downward traffic trends to our stores" and lower demand for its core merchandise.
But she said the retailer has cut inventories by 13% in order to improve margins.
Expecting weak traffic trends to continue, the company forecasts earnings per share in the second quarter to range from a loss of $0.02 to $0.00, compared with $0.16 in the same period last year.
This assumes net sales will fall to $625m to $640m, from $694m last time, and that same-store sales will be down 3%.
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