US: Charming Shoppes swings to Q2 profit
- Swings to Q2 profit of $5.0m
- Sales down 18.7% to $527.2m
- Gross margin up from 46.7% to 50.0%
Women's plus-size apparel retailer Charming Shoppes Inc has swung to a second quarter profit, but says its results continue to reflect "a difficult retail environment."
Restructuring charges offset by a gain on the repurchase of debt helped lift net income for the three months to 1 August to $5.0m or $0.04 per share. This compares with a net loss of $10.7m or $0.09 per share in the same period last year.
Net sales were down 18.7% to $527.2m, which the company blamed on a same-store sales decrease of 14% and the impact of 120 store closings during the last four quarters.
Comparable store sales fell 13%, 18% and 9% at the Lane Bryant, Fashion Bug and Catherines brands, respectively.
Lower sales volumes also meant gross profit fell 12.9% to $263.9m, but lean inventories and reduced markdowns on spring and summer merchandise helped lift gross margin from 46.7% to 50.0%.
Selling, general and administrative expenses were down 18.4% to $134.3m after the company cut 225 jobs in January and closed under-performing stores.
President and CEO Jim Fogarty said: "Our sales reflected negative but generally improving comps to last quarter at our Lane Bryant and Catherines brands, as we made progress on more balanced and compelling assortments.
"Our Fashion Bug brand had a difficult second quarter with spring and summer assortments that were not compelling to our consumer."
He added: "We are positioned for the third quarter with much less seasonal carry-over inventory than in the prior year."
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