Shares of specialty retailer bebe ( BEBE) were dropping after the company guided fourth-quarter earnings to the low end of Wall Street's consensus.

The news took the spotlight away from the company's third-quarter earnings report, which surpassed consensus estimates.

For the fourth quarter, bebe expects to earn 16 cents to 19 cents a share, before a 3-for-2 stock split; analysts are calling for 19 cents a share. A year earlier, the company earned 13 cents a share in the fourth quarter.

The stock was lately down $1.83, or 5.3%, at $32.50.

In the third quarter ended March 31, earnings rose to $5.5 million, or 21 cents a share, from $142,000, or 1 cent a share, a year ago, as a higher gross margin and lower expenses boosted results. Analysts were expecting 18 cents a share.

Sales rose 21.6% to $83.6 million from $68.8 million last year. Same-store sales in the quarter rose 16.7%, compared with an 11% decrease a year ago.

As a result of improved merchandise margins, gross margin expanded to 46.3% as a percentage of sales, from 42.1% in the prior-year period.

For the fourth quarter, bebe expects same-store sales in the high single digits; in fiscal 2005, bebe anticipates same-store sales in the low to mid-single digits.

The Brisbane, Calif.-based company also expects to open 20 new stores in 2005.

More from Stocks

Danica Patrick's Final Race at 2018 Indianapolis 500: What She Thinks About Cars

Danica Patrick's Final Race at 2018 Indianapolis 500: What She Thinks About Cars

Why The FANG Stocks' Dominance May Not Be So Bad For The Market

Why The FANG Stocks' Dominance May Not Be So Bad For The Market

At End of May, Investors Signalling They May Stay Away

At End of May, Investors Signalling They May Stay Away

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Inside Carnival's Mind Blowing New Horizon Cruise Ship (Video)

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever

Neel Kashkari: The Heart of Our Financial System Is More Radioactive Than Ever