said second-quarter earnings topped analysts' estimates, due in part to the company's strong European business. But the company remained cautious about its third and fourth quarters and yearly outlook.
The company also said it plans to close all but seven of its 44 U.S. specialty stores. Shares were down 11%, or $1.05, at $8.29 in premarket trading, according to Instinet.
In the second quarter, the company earned $61 million, or 67 cents a share, beating analysts' consensus of 59 cents a share, and compared with last year's earnings of 53 cents a share, or $47.9 million. Sales were $546.5 million, flat with last year's $546.4 million.
Looking to the third quarter, the company expects to earn between 32 cents and 42 cents a share, lower than analysts' consensus of 44 cents a share. For the fourth quarter, the company expects to earn between 13 cents and 23 cents a share, well below analysts' average estimate of 53 cents a share.
In 2003, the Hong Kong-based company expects to earn between $1.15 and $1.35 a share, again below the $1.58 a share that analysts expect. The company also said the $1.77 a share projected by analysts from Thomson Financial/First Call for full-year 2004 is "unrealistic," and that results will be closer to the company's 2003 estimated range.
The company said it will close 37 specialty stores after the holidays because they are underperforming, and that it plans to pursue growth opportunities in Europe. In the second quarter, the company said it lost $4 million on the stores. The company estimated that it will take about $75 million to $95 million in charges as a result of the closings.