Tween Brands Inc on Wednesday (22 August) posted a 64% slump in second quarter profit, aggravated by later back-to-school start dates and lower same-store sales, and revised its outlook for the rest of the year.

Net income at the specialty retailer which caters to girls aged 7 to 14 was $2.1m, or $0.07 per share, down from $5.9m, or $0.18 per share for the 2006 period.

Net sales for the second quarter ended 4 August increased 15% to $213.7m from $185.8m, helped by a 15% increase in store count.
 
Sales at stores open at least a year fell 2% versus a 10% increase in the same period last year. By brand, Justice same-store sales increased 13%, while Limited Too's decreased 4%.

The gross income rate declined 170 basis points primarily due to a lower merchandise margin and higher buying and occupancy costs as a percentage of net sales.

And store operating, general and administrative expenses as a rate of sales increased 120 basis points on higher marketing costs around a wider circulation of the Justice catazine.

"We underestimated the impact of so many schools in our markets moving their back-to-school start dates later, as well as Texas and Florida shifting their state sales tax holidays from July to August," said Tween Brands chairman and CEO Mike Rayden.

Earnings per diluted share for the third quarter are now estimated at $.40 to $.45, below the $.58 per diluted share reported for the like period last year.

The company also said that it expects earnings per diluted share for the fourth quarter to be in the range of $0.94 to $1.04, which would be a 9% to 21% increase on the $0.86 per diluted share reported for fourth quarter 2006.

Full-year earnings per diluted share have been lowered to $1.80 to $1.95 compared to its previous guidance of $2.10 to $2.25.

Commenting on the revised earnings guidance, Mr Rayden said the company "remains cautious" regarding the current trend in retail traffic and the continuing uncertainties in the US economy.

New Albany, Ohio based Tween Brands operates 578 Limited Too stores and 218 Justice stores across the US.