Specialty retailer New York & Co., Inc. (NWY) Thursday reported a narrower loss for the third quarter, reflecting better than expected improvement in comparable store sales and lower selling, general and administrative expenses. Following the results, the the company's shares are trading up about 12% on the NYSE.
The New York-based company's loss from continuing operations for the third quarter narrowed to $6.30 million from $7.99 million in the previous year. Results for the quarter include a non-operating charge of about $0.01 per share related to the restructuring of the company's real estate group.
Net loss for the quarter was $6.30 million or $0.11 per share, compared to $7.92 million or $0.13 per share last year.
On average, five analysts polled by Thomson Reuters expected the company to report a loss of $0.08 per share for the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter declined to $227.95 million from $249.03 million a year ago. Analysts estimated revenues of $231.89 million for the quarter.
Comparable store sales decrease for the quarter was 8.4%, down from 14.0% in the previous year.
Cost of goods sold, buying and occupancy costs were $170.22 million, compared to $186.09 million in the previous year. Gross margin for the quarter was 25.3%, flat with the previous year.
Selling, general and administrative expenses declined to $68.66 million from $76.07 million last year.
Average selling square footage per store declined to 5,568 from 5,620 in the previous year. Net sales per average store was $385, down from $416 a year ago. Net sales per average selling square foot declined to $69 from $74 last year.
For the nine-month period, net loss was $16.02 million or $0.27 per share, compared to an income of $7.58 million or $0.12 per share in the same period of the previous year. Net sales for the period declined to $708.63 million from $814.76 million a year ago.
Looking forward, the company believes that the business environment will remain challenging, and expects promotional activity to accelerate throughout the key holiday selling period. Comparable store sales trend for the fourth quarter is expected to sequentially improve, compared to the third quarter due to the positive customer response to the company's merchandise and better inventory management.
For the fourth quarter, the company expects earnings of $0.03 per share on revenues of $306.46 million.
The company said that it continues to expect to exceed the $30 million pre-tax savings target for fiscal year 2009 established when it initiated its restructuring and cost reduction program in January 2009.
The company also noted that its board of directors has authorized the repurchase of up to 3.75 million shares over a 12-month period ending on November 23, 2009.
NWY is currently trading at $4.20, up 0.45 or 12%, on a volume of 102K shares on the NYSE.
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