For the third quarter of Fiscal 2005, net sales increased 12%to $296.7 million, compared with $264.1 million for the same period last year. Comparable store sales for the third quarter of Fiscal 2005 increased 9% after achieving an 8% increase in last year's third fiscal quarter.
However, sales result during the first two and a half weeks of November are not as robust as Claire's had hoped, says CFO Ira Kaplan. "We lowered our guidance for the fourth quarter… it was a difficult decision … but we have concluded that our earlier fourth quarter projections were too aggressive," he says.
Q4 revenues are being estimated to range between $396 and $405 million, in lieu of earlier Q4 estimates of $412 to $414 million. These revised estimates represent an increase of 9% to 11% over last year's revenue number of $364 million. Comparable store sales are projected to rise by 6% to 8%.
"We want to reiterate that we believe our stores are well-positioned for the holidays," Kaplan says. "How we perform in a few key weeks during the quarter carries out in dramatic swings in our results. If business picks up strongly over the next few weeks, we could meet the plans of our operations people and end up revising our forecast upwards."
Claire's Stores Inc. has two store concepts: Claire's and Icing by Claire's. For the first nine months of 2004, Claire's had 123 stores openings, 69 store closings for a net increase of 54 and a total store count 2,989.
"Work at Icing continues to bring good results," says Marla Schafer, co-chairman & CEO. She notes that further changes in merchandizing at Icing are in the pipeline. "Our objective is to lessen the gap between the average dollar volume at Icing stores compared to Claire's," she says.
According to Bonnie Schafer, co-chairman & CEO, Claire's International represented 30% of total sales of third quarter fiscal 2005 compared to 28% mid-single same store sales increases.
"This marks six consecutive months of positive same stores sales and this represents a considerable improvement over the results we were delivering last year," Bonnie Schafer says. "We are on the right trackand will continue with our efforts."
In particular, performance in France is improving. "Our primary objective is to restore performance in this country to positive activity," Bonnie Schafer says. During the third quarter, Claire's opened 10 new stores in France. And, several members of the French management team visited North American to learn best practice operations.
The company continued to expand internationally. Last quarter, it took the first steps onto another continent with the opening of two licensed stores in South Africa, Bonnie Schafer says.
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