The retailer, which operates 335 specialty apparel stores in 42 states under the DEB and Tops 'N Bottoms brands, also cut its full year financial guidance and said it expects sales at stores open at least a year to see lower sales in the remaining two quarters. Four stores opened and one closed during the three month period, the company said.
Net income for the quarter was $5.9 million, or 41 cents per share, compared to $6.6 million, or 46 cents per share, in the prior year's quarter. Sales also dropped 0.4% to $75.7 million from $76 million in last year's second quarter.
Barry Susson, chief financial officer, said second quarter results were below company expectations, driven by "a challenging economic environment" that has cut spending in the 13- to 25-year-old age group which the chain targets. Sales of plus line clothing, however, increased 25% at the Philadelphia retailer's 174 stores where plus size departments were located, he said.
For the first six months of fiscal 2007, net sales increased 2.4% to $157.1 million from $153.5 million for the comparable prior year period. Gross profit net of buying and occupancy costs was up to $51.4 million while net income for the period was $8.6 million, or 60 cents per share, compared to $9.4 million, or 66 cents per share, in the first half of fiscal 2006.
Company officials said they were lowering its profit estimates for fiscal 2007 to between $1.30 and $1.40 per share based on expected sales to $320 million to $325 million. Deb Shops previously forecast per share earnings of $1.40 to $1.50 on sales of $325 million to $330 million. Sales at stores opened at least a year were also expected to drop into the high single digit range in the third quarter and decrease to the mid-single digit range by the end of the year, the company said.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
