Eddie Bauer Widens Quarterly Loss

Amid rumors of the possible sale of the company, Eddie Bauer(EBHI Quote) more than doubled its loss in the first quarter, hurt by slushy sales and gross margins.

Bloomberg News reported last week that the company is in talks with potential buyers, including Gordon Brothers, Hilco Consumer Capital and Hudson Capital Partners.

But shares of the company soared in late-day trading, up 16% to 64 cents, and continued to rise in after-market trading.

During the quarter, the company recorded a loss of $44.5 million, or $1.44 a share.

Sales dropped 16% to $179.8 million from $213.2 million

"The first quarter was a difficult one, as the sharp downturn in the economy took its toll on our sales," President and CEO Neil Fiske said in a rather understated statement. "We continued to focus on cost cutting and cash-flow management, which helped mitigate the impact of lower sales."