US: Eddie Bauer sales flat in "difficult" third quarter
Eddie Bauer Holdings has reported lacklustre growth in its third quarter in terms of sales, although the company did narrow losses compared to the same period last year.
The company said that total revenues were US$211m compared to $211.3m in the third quarter of 2006. Comparable stores sales rose 3.4%, while revenues from the company's direct channel, which includes sales from its catalogue and websites, declined by 0.7%.
Operating loss improved from a $134.1m loss during the year-ago third quarter to a $26.5m loss for the third quarter of this year. The third quarter operating loss of the prior year quarter included a $117.6m asset impairment charge related to the writedown of the company's goodwill.
The net loss for the third quarter of 2007 was $16.4m compared to a net loss of $197.6m in the third quarter of 2006, which included the asset impairment charge.
Neil S. Fiske, president and CEO, said: "Overall, this was a difficult quarter with a few bright spots. While sales were roughly flat and margin dollars were down slightly, bottom-line results were negatively impacted by a number of non-recurring, transitional costs. Importantly, we have been encouraged with the early response to some of the changes we have been making in our retail stores, including good results from our semi-annual pant event in September, which contributed to an 8.6% increase in comparable store sales for September in our retail stores, and our 67th Anniversary down event just concluded in stores."
He added that the company was in the process of developing a significant cost reduction plan for 2008.
"We expect that this plan will result in reductions to our operating cost structure of $25 to $30m in 2008. I continue to be confident that Eddie Bauer, once a great brand, has real comeback potential, and we have seen some encouraging early signs," Fiske concluded.
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