Specialty retailers reporting quarterly results Thursday morning delivered robust sales gains, suggesting summer clearance events worked while early back-to-school promotions at the teen retailers were successful. Profits, however, were another story.
At New York & Co., second-quarter earnings plummeted 46 percent as the company slashed its full-year guidance. For the three months ended Aug. 4, earnings fell to $3.5 million, or 6 cents a diluted share, from $6.5 million, or 11 cents, in last year’s period as sales for the quarter increased 11 percent to $294.4 million from $264.8 million. Total same-store sales rose 4.7 percent in the quarter.
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The company lowered its full-year earnings forecast to a range of 47 cents to 58 cents a diluted share, from previous guidance of 85 cents to 92 cents a diluted share. New York & Co. expects third-quarter earnings in the range of 1 cent to 6 cents a diluted share.
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Deb Shops Inc. reported a 5.1 percent jump in second-quarter earnings to $6.2 million, or 43 cents a diluted share, from $5.9 million, or 41 cents, last year on a sales gain of 27.5 percent to $77.7 million from $75.7 million. During the quarter the teen retailer announced that Lee Equity Partners LLC will acquire the company for $27.25 a share. The company will no longer provide guidance, and has cancelled its second-quarter conference call.
The Wet Seal Inc. saw a 53 percent surge in second-quarter earnings to $6.8 million, or 7 cents a diluted share, from $4.4 million, or 4 cents. For the three months ended Aug. 4, sales rose 10.6 percent to $143.3 million, from $129.5 million, while total same-store sales fell 1.7 percent. The company expects difficult traffic trends in the specialty sector to continue, and anticipates third-quarter earnings in the range of 7 cents to 10 cents a diluted share.