Little good news came out of the
first-quarter earnings report: the company swung to a bigger-than-expected loss and missed analysts' expectations.
Investors, though, sent shares soaring over 35% to $4.24 in afternoon trading, on the seemingly lackluster news that the company is tightening inventory levels and on track to "comfortably satisfy credit facility covenants."
During the quarter, the company recorded a loss of $1.4 million, or 6 cents a share, compared with a profit of $4.3 million, or 17 cents, last year. Analysts expected a loss of 19 cents a share.
Revenue dropped 18% to $205.2 million from $251.7 million in the year-ago period, while total same-store sales at its Justice and Limited Too chains tumbled 23%.
Tween Brands attributed the steep sales decline to a decrease in marketing dollars, which it plans to correct during the second half of the year.
The company said the conversion of all Limited Too stores into Justice stores, which began last summer, is nearing completion.
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