Charming Shoppes Inc, a leading multi-brand apparel retailer specializing in women's plus-size apparel, reported sales and operating results for the three and twelve month periods ended January 29, 2011.
Additionally, the Company announced the alignment of its Lane Bryant and Lane Bryant Outlet divisions, and the further rationalization of its store base during 2011. In separate news, the Company announced the appointment of Anthony M. Romano as the Company's President and Chief Executive Officer and a member of the Company's Board of Directors and the appointment of Brian Woolf as Group President - Lane Bryant.
Commenting on the results for the quarter, Anthony M. Romano, President and Chief Executive Officer of Charming Shoppes, Inc. said, "During the fourth quarter of 2010, we stabilized our businesses, generated positive comparable store sales and improved our operating performance. The improvement in our fourth quarter results was driven by a more targeted holiday fashion assortment, an improved in-stock inventory position in our intimate apparel and core bottoms programs, and a more aggressive promotional and advertising program than in previous holiday seasons.
“Our holiday assortments were well received, and drove strong results in categories such as fashion knit tops and sweaters, novelty t-shirts, year-round wear-to-work bottoms, and core denim. Our assortments drove a 9% increase in our comparable store sales, including an 11% increase at Lane Bryant, and sales at our online businesses increased 41% for the quarter. While we have made progress, we recognize that our results follow double-digit negative same-store sales performance over the previous two holiday seasons.
"Our gross profit dollars increased by $12.2 million and operating expenses decreased by $11.9 million, and decreased as a percent of sales by 520 basis points during the period.
"As to our profitability, we have made progress, increasing adjusted EBITDA by $23.6 million compared to the year-ago quarter. Our leverage on operating expenses was primarily driven by higher sales volume and decreased store operating expenses, which included lower rent expense as a result of the operation of fewer stores and lease negotiations. We also drove additional credit card promotions in order to incentivize our customer to use our private label credit cards, which resulted in increased income from our card programs.
"Sharp increases in cotton-based raw materials pricing were not a factor in our fourth quarter results; however, as we look to 2011, we do expect a modest increase in product costs for our Spring season, further increasing as we enter the Summer season, with the biggest challenges in Fall and Holiday. To mitigate these increases, each brand is planning to selectively increase pricing across its product assortments, while being aware of the competitive environment and the price sensitivity of our customers."
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