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Charming Shoppes Reports Smaller 1Q Loss

The Associated Press

BENSALEM, Pa. (AP) — Charming Shoppes Inc., which operates Lane Bryant and Fashion Bug stores, reported a smaller fiscal first-quarter loss on Wednesday, but the women's apparel retailer called its performance "disappointing."

In the quarter ended May 2, Charming Shoppes' losses totaled about $6.6 million, or 6 cents per share. That loss includes 7 cents per share in charges related to restructuring and other one-time items.

Analysts surveyed by Thomson Reuters, who generally exclude one-time items and discontinued operations from their estimates, forecast a loss of 7 cents per share for the most recent quarter.

The first-quarter loss compares with a loss of $46.8 million, or 41 cents per share, a year ago. Without discontinued operations, the year-ago loss came to $900,000, or 1 cent per share.

The company's quarterly net sales tumbled 16 percent to $538.1 million, while same-store sales, or sales at stores open at least a year, fell 13 percent. Same-store sales are a key indicator of retailer performance since they measure growth at existing stores rather than newly opened ones.

Charming Shoppes noted that the company also shuttered 162 stores during the last year.

"While our performance for the first quarter reflected a difficult retail environment and did exceed our earnings guidance, our results were nevertheless disappointing," said President and Chief Executive Jim Fogarty in a statement. "Our results reflect comparable store sales performance that was not on par with other retailers, and a disappointing level of earning power for our brands."

Fogarty said the company is focused on improving its business model, marketing and merchandise assortment.

Excluding the restructuring charges, the company reduced its total expenses by 16 percent to $103.3 million in the first quarter. The merchandise margin, on the other hand, improved as the retailer slashed same-store inventories by 21 percent.

Charming Shoppes shares gained 12 cents, or 3.4 percent, to $3.70 in afternoon trading. The stock has traded between 45 cents and $6.35 during the past 52 weeks.