Bebe Stores Inc has announced its financial results for the second quarter of fiscal 2001 ended December 31, 2000.

The company reported that net sales reached $93.0m, a 19.1 per cent increase from the $78.1m reported for the same period a year ago. Net earnings reached $11.9m, compared to $12.5m for the prior year.

Diluted earnings per share for the second quarter were $0.47 versus $0.49 in the prior year. The second quarter results include the impact of an estimated non-recurring expense of approximately $.02 per diluted share.

"During the quarter we improved the product assortment, " said Manny Mashouf chairman and chief executive officer. "We were particularly pleased with our success in the leather, knit and logo categories."

During the quarter, the company recorded a non-recurring expense of $.02 per share related to the tentative resolution of a lawsuit. The complaint alleged that certain store managers were incorrectly classified as exempt from overtime laws.

The company, without admitting or acknowledging any wrongdoing, believes that given the potential duration and expense of litigation, early resolution is in the best interest of its shareholders.

The agreement, when executed, will be subject to subsequent judicial approval. Furthermore, the Company does not expect any change to its ongoing operating cost structure as a result of this settlement.