Charming Shoppes lowers Q4 and FY guidance
Charming Shoppes, Inc. (Nasdaq: CHRS), lowered its guidance for its fourth quarter and fiscal 2008 year, citing a continued decrease in traffic levels in its stores during the holiday season as well as lackluster consumer spending.
For the fourth quarter ending Feb. 2, the plus-size women's apparel retailer said it now expects a wider net loss per share in the range of $0.17 to $0.20, from the originally forecasted range of a net loss of $0.06 to $0.08 per share. The small cap reported net profit of $0.19 per share for the fourth quarter of 2007. Nine analysts polled by Thomson Financial were on average forecasting a net loss per share of $0.07.
The company attributed its lowered guidance to response taken to counteract a bleak macroeconomic environment during the holiday season. The company implemented more aggressive promotional markdowns to drive sales of seasonal merchandise. The markdowns, however, resulted in lower merchandise margins at each of its retail brands and led to downwardly revised earnings expectations for the fourth quarter
Charming Shoppes also attributed its new projection to pre-tax charges of $15.4 million related to the company's relocation of its Catherines Plus Sizes Memphis, Tenn. operations to its Bensalem, Pa. offices, as well as an initial pre-tax investment related to the launch of its Lane Bryant catalog.
For the fiscal year ending Feb. 2, 2008, the Bensalem, Pa.-based company lowered projections for earnings per share to the range of $0.12 to $0.15 from the previously forecasted range of $0.24 to $0.26. Charming Shoppes recorded earnings per share of $0.81 for fiscal 2007. Seven analysts polled by Thomson Financial were on average projecting EPS of $0.26 per share.
Shares of Charming Shoppes (CHRS) were halted in pre-market trading.
