Apparel retailer Charming Shoppes, Inc. (CHRS) reported Wednesday a profit for the second quarter, reflecting disciplined inventory management, gross margin improvement as well as lower costs and expenses, despite a 18.7% decline in sales.
The Bensalem, Pennsylvania-based company's net income for the quarter was $4.98 million or $0.04 per share, compared to net loss of $10.68 million or $0.09 per share in the previous year.
Results for the quarter included restructuring charges of $7.8 million, offset by a gain on repurchase of debt totaling $7.31 million. Prior-year results included restructuring charges of $14.9 million and a loss from discontinued operations of $5.2 million.
On average, four analysts polled by Thomson Reuters expected the company to report earnings of $0.03 per share for the quarter. Analysts' estimates typically exclude special items.
Jim Fogarty, president and chief executive officer said, "On profitability for the quarter, we were able to offset volume declines with disciplined inventory management, gross margin improvement, and reductions in both SG&A and Occupancy expense."
Net sales for the quarter declined 18.7% to $527.22 million from $648.62 million in the prior-year period. Analysts estimated revenues of $554.82 million for the quarter.
According to the company, the drop in sales was mainly due to a comparable store sales decrease of 14% and the impact of 120 store closings and 21 store openings during the last four quarters.
Cost of goods sold decreased to $263.36 million from $345.79 million in the earlier year. Total operating expenses declined to $261.32 million from $308.02 million a year ago. The company noted that occupancy and buying expense decreased 5.2%, due to the operation of fewer stores and occupancy reductions secured. Selling, general and administrative expense decreased 18.4% to $134.3 million from the prior-year quarter.
For the six-month period, the company's net loss narrowed to $1.58 million or $0.01 per share from $57.52 million or $0.50 per share in the preceding year. Net sales for the period decreased to $1.06 billion from $1.29 billion in the earlier year.
CHRS is currently trading at $5.47, up $0.04 on a volume of 978K shares.
For comments and feedback: editorial@rttnews.com