Specialty apparel retailer Casual Male Retail Group Inc. (CMRG: Quote), said Friday its profit for the second quarter slid from last year, hurt by lower gross margin, higher taxes, as well as losses from discontinued operations, amid a modest rise in sales that missed Street estimates.
Moving forward, Casual Male slashed its outlook for the full year 2012, citing weak consumer spend and sales erosion at Casual Male XL stores.
Casual Male operates chains under trade names including its namesake brand, as well as Destination XL, Rochester Big & Tall, among others. The company has been phasing out traditional Casual Male XL stores and rolling out DXL stores to ramp up margins. During the quarter, sales growth was lackluster even as comparable store sales edged up 2.0 percent.
Canton, Massachusetts-based Casual Male reported second quarter net income of $1.2 million or $0.03 per share, a decline from $6.6 million or $0.14 per share last year.
Excluding items, adjusted income from continuing operations for the quarter totaled $3.0 million or $0.06 per share, compared to $4.7 million or $0.10 per share a year ago.
On average, four analysts polled by Thomson Reuters expected earnings of $0.07 per share for the quarter. Analysts' estimates typically exclude special items.
The largest retailer of big & tall men's apparel reported quarterly sales of $100.5 million, compared to $100.4 million in the prior year. Analysts expected sales of $102.39 million for the quarter.
Gross margin for the quarter declined to 46.4 percent from 48.4 percent in the prior year, due mainly to pared merchandise margins and increased occupancy costs.
For the full year 2012, Casual Male now expects earnings of $0.22 to $0.25 per share, compared to its prior guidance of $0.22 to $0.27 per share. Sales are now forecast in the range of $405.5 million to $410.0 million, compared to earlier estimates of $416.5 million to $423.9 million.
Analysts currently estimate earnings of $0.24 per share on sales of $418.58 million for the full year 2012.
The company expects full year same-store sales to grow between 3.0 and 4.0 percent, as against prior expectations of 4.7 and 6.6 percent.
The company plans to complete roll out of 225 to 250 DXL stores by the end of fiscal 2015, while closing traditional Casual Male XL locations.
CMRG is trading at $4.08 down 2.86%, on the Nasdaq.
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by RTT Staff Writer
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