Rue21 and Zumiez reported higher third quarter sales and income. Charming Shoppes posted flat sales for the quarter with its online business improving. Express raised its full year forecast despite a drop in income.
Charming Shoppes Q3 Sales Flat, Online Increases
Bensalem, PA–Charming Shoppes reported this week that its third quarter sales ending October 30 were basically flat at 0.7% compared with the same quarter 2009. Comparable store sales, however, were up 3%. Total sales reached $463.6 million from $460.2 million in 2009.
Net loss for the quarter narrowed to $18.8 million verses a net loss of $48.4 million in the third quarter of 2009.
Anthony M. Romano, executive vice president and chief operating officer, said: “We continue to make progress on executing our merchandise strategies. We experienced increases in our total and comparable store sales performance, while increasing our gross margin 60 basis points during the period.”
The company saw its biggest gains in its e-commerce business, which increases 40.1% to $30.4 million from $21.7 million in 2009.
“Our strong and competitive promotional activity drove improved traffic, especially later in the quarter. Additionally, our online businesses continued to perform strongly, driving a 40% increase in e-commerce sales for the quarter,” Romano added.
James P. Fogarty left his job as ceo of Charming Shoppes and resigned his position on the board of directors. The search for a new chief executive is under way.
Express lifts FY guidance despite Q3 profit drop
Columbus—Express reported Wednesday that its profit for the third quarter dropped from a year earlier, hurt by a significantly higher income tax expense. Nonetheless, the company said its fourth quarter will be strong and raised its full year guidance.
Net income dropped to $26.3 million or $0.30 per share from $28.5 million or $0.37 per share last year. The company said it incurred a higher income tax expense for the quarter of $18.4 million compared with $0.33 million last year.
The higher tax payment reflects the company’s conversion to a corporation in connection with its initial public offering completed in May. Excluding costs related to an anticipated secondary public offering, adjusted income would have been $26.4 million or $0.30 per share for the quarter. Analysts’ average estimates were for earnings of $0.30 per share for the quarter (analysts’ estimates typically exclude special items.)
For the third quarter, net sales rose 6% to $450.6 million (exceeding analysts’ estimates for $447.2 million) from $426.0 million a year earlier, while comparable store sales increased 2%. The company’s gross margin for the quarter improved 240 basis points to 36.5%.
Michael Weiss, ceo, said the increased sales reflect improved store productivity, strong growth in e-commerce sales, and opening of new stores. “The quarter included positive comparable store sales, a 57% increase in e-commerce sales, and a 240 basis point increase in gross margin, all contributing to a 26.6% increase in operating income compared to the third quarter last year,” he added.
Fourth quarter comparable store sales are anticipated to increase in the low to mid single digits. Express said it also intends to open nine stores while pulling down the shutters on one.
“We expect Express to maintain its fashion leadership this holiday season,” Weiss said. “We saw a terrific response to our Thanksgiving weekend events and are excited about our opportunities as the holiday season progresses.”
The retailer, which operates 582 stores, said it expects to earn $1.31 to $1.37 per share for the year, up from its previous forecast of $1.27 to $1.33 per share.
Rue21 lifts outlook on Q3 profit hike
Warrendale, PA–Rue21 Inc. reported a 20% increase in third quarter net income and revenue, as same-store sales rose. Moreover, the retailer raised its outlook based on the upswing.
Net income was $7.1 million, or 29 cents per share, a 20 percent increase from the $6.0 million, or 26 cents per share, in the year-ago period. Analysts’ average estimate was for 27 cents per share. Revenue was $163.9 million, a 20% increase from the $137.1 million in third quarter 2009. Analysts expected $163 million.
Comparable store sales increased 1.8% which was less than the 13.5% jump in same store sales in 2009.
“We have exciting initiatives to drive the sales this holiday season, and we believe that rue21’s increasing brand awareness combined with the strength of our product categories and assortments will allow us to achieve our goals,” said Bob Fisch, president and ceo.
Looking ahead the company, which operates 628 stores, raised its full year guidance, and now expects earnings per share in the range of $1.17 to $1.20, compared to $0.96 a year earlier. Fourth quarter sales growth is likely to be in the range of 19% to 21%, with earnings per share of $0.40 to $0.43. Analysts’ average estimates are for 42 cents a share for fourth quarter and $1.17 a share for the year.
Zumiez Q3 profit up 143% on higher sales
Everett, WA–Third quarter results at Zumiez Inc have beaten expectations after higher sales helped the action sports apparel and footwear retailer to a 143% profit hike.
The company reported Thursday net income of $12.3 million, or $0.40 per share, for the third quarter ended October 30, compared to $5.1 million or $0.17 per share in third quarter 2009.
Net sales increased 20% to $135.9 million from $113.9 million in 2009. Comparable store sales increased 14.4% vs. a decrease of 8% in third quarter 2009
Total net sales for the nine months ended October 30 increased 17.3% to $322.7 million, compared to $275.2 million for the nine months in 2009
“We are pleased our third quarter 2010 financial result exceeded our expectations resulting in the highest third quarter profit in our history,” said Rick Brooks, ceo. “We are pleased that the strength we saw in October has continued in November with same store sales again increasing over 20%.”
In a conference call with analysts, Zumiez executives that expected to be faced with increased product costs like most retailers will be in 2011. The company has repositioned its junior business in the last year which saw some improvement in comparable sales for November.
“Going back to the end of last year, we started working aggressively to reposition the junior’s business,” said Trevor Lang, chief financial officer. “Fast fashion hit hard so we worked to get the talent in place and build the model for next year, and we executed on that strategy through this past year. Our margins are up so that strategy has worked. That being said, it’s still a difficult environment. We have been doing better in the last four to five months, and juniors is currently running just around 4 to 5% of our sales, so it’s not nearly as important as it is to our competitors, but we do feel like we have some momentum.”