US: Tween Brands withdraws H2 outlook on Q3 loss
Tween Brands Inc has swung to a third quarter loss after being hit by restructuring charges, lower sales, and has withdrawn its outlook for the second half of 2008.
The New Albany, Ohio-based retailer said its quarterly loss was $0.8m, or $0.03 per share, compared to a profit of $13m, or $0.46 per share, a year earlier.
Costs of converting its Limited Too stores to the value-oriented Justice brand were $11.5m in the quarter. Excluding this, the company said its third quarter profit was $6.4m, or $0.26 per diluted share.
"We believe the incredibly challenging conditions we are experiencing today are likely to persist for some time and will have a sustained impact on consumers' desire and need for value," said Michael Rayden, Tween Brands chairman and chief executive officer.
He added: "Given the macro-economic turmoil and the lack of customer activity so far in the month of November, our visibility into the holiday season has become opaque at best.
"Therefore, we are withdrawing our previously stated guidance for the second half of 2008 and are holding off on providing earnings guidance for the fourth quarter and full year."
The company has also slashed its capital expenditures for next year to a range of $10-15m, down from $65-70m this year.
Tween brands, which targets tweens aged 7 to 14, said sales in the third quarter fell 3% to $254.3m, as the addition of 91 new stores largely offset an 11% decline in comparable store sales.
Justice sales were $81.2m, up 24% from last year, with a comparable store sales decline of 4%.
Limited Too sales fell 13% to $161.1m, with same-store sales declining 13%.
Higher markdowns and buying costs pushed gross income down to $85.6m, or 33.7% of net sales, from $93.9m, or 36.0% of net sales last year.
The company operates 335 Justice stores and 590 Limited Too stores.
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