NEW YORK (
New York & Co.
is losing more than a quarter of its value after it said it will post a bigger-than-expected loss in its second quarter.
The news prompted KeyBanc analyst Jessica Schmidt to slash her price target on the stock by 25%.
The women's retailer said its second-quarter loss will surpass the loss of $4.8 million, or 8 cents, seen in the second quarter last year. It did not provide a specific dollar amount. It predicts same-store sales to come in flat, worse than the slight uptick it previously forecast.
CEO Richard Crystal said during Piper Jaffray's Consumer Conference on Tuesday that New York & Co. ended the spring season with low inventory levels. After seeing notable improvement in March, management decided to aggressively pursue inventory. This turned out to be a mistake, as April and May sales softened. Merchandise, specifically t-shirts and dresses, were a miss, as they were skewed too young.
As a result, Crystal said they were forced to beef up promotions to get rid of inventory before the fall selling season, unable to move merchandise at the prices management expected.
"This sales loss and what we think we will happen the rest of the quarter, led to our earnings revision," Crystal said.
Shares of New York & Co. are plunging 31% to $2.28 in midday trading.
-- Reported by Jeanine Poggi in New York.
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