Charlotte Russe reports fiscal Q3 & nine month financial results
Charlotte Russe Holding Inc announced financial results for the third quarter and nine months ended June 27, 2009.
Third quarter fiscal 2009 net sales increased 4.9% to $202.7 million, compared to $193.2 million in the third quarter of fiscal 2008. Comparable store sales for the period decreased 3.6%. Net income for the 2009 third quarter was $6.3 million, or $0.29 per diluted share compared to $6.6 million, or $0.31 per diluted share, for the same period in 2008.
In the third quarter of fiscal 2009, the Company recorded cash charges of $1.3 million related to expenses for proxy solicitation, management transition and severance, as well as costs related to the review of strategic alternatives and subsequent sale process. Third quarter 2009 diluted earnings per share, excluding the aforementioned expenses, were $0.33. The Company opened seven new stores and closed two locations during the period.
Net sales for the nine month period ended June 27, 2009 increased 2.9% to $634.6 million compared to $616.5 million in the same period of fiscal 2008. Comparable store sales for the period decreased 7.1%. Net income for the first nine months of fiscal 2009 was $2.5 million, or $0.12 per diluted share, compared to $24.8 million, or $1.04 per diluted share, for the same period in fiscal 2008.
In the first nine months of fiscal 2009, the Company recorded cash charges of $5.0 million related to expenses for proxy solicitation, management transition and severance, as well as costs associated with the review of strategic alternatives and subsequent sale process. The Company also recorded a non-cash charge of $1.6 million for store impairment. Diluted earnings per share, excluding the aforementioned expenses, were $0.29.
John D. Goodman, Chief Executive Officer, stated, “During the third quarter, we continued to make progress with our strategic and operational initiatives, which resulted in reduced markdown levels and improved gross profits versus a year ago. The strength of gross margin, combined with prudent cost controls, enabled us to deliver higher than anticipated non-GAAP diluted earnings per share of $0.33.
“Although the environment remains extremely challenging, we believe there is a tremendous opportunity for Charlotte Russe to improve its leadership position in the fast fashion category. Importantly, we're engaging the customer with trend right merchandise and providing her with a compelling shopping environment, both in-store and online. We're excited about our back-to-school product assortments, which began arriving in stores earlier this month. The new collections communicate a distinct Charlotte Russe point of view, which is supported by elevated fashion imagery in stores and on our web site, as well as extensive editorial coverage in leading fashion publications.”
Goodman concluded, “We're continuing to manage the business conservatively by controlling inventories, conserving costs and prudently investing in the resources, talent and systems necessary to help take the Charlotte Russe brand to the next level. At quarter-end, the Company had $60 million in cash and no long-term debt, affording us the financial flexibility to execute our growth plans despite the ongoing challenges presented by the macro environment.”
For the fourth quarter of fiscal 2009, the Company expects comparable store sales to be in the negative low- to mid-single digits. Non-GAAP diluted earnings per share are expected to be in the range of $0.18 to $0.26, exclusive of anticipated charges related to management transition and severance, as well as the review of strategic alternatives and subsequent sale process. This compares to non-GAAP diluted earnings per share of $0.01 in the prior year period.
Charlotte Russe Holding Inc