Home textiles retailer Linens 'n Things explores strategic alternatives

23 Sep '05

3 min read

Home textiles retailer Linens 'n Things Inc announced it is updating its July 20, 2005 outlook, at which time it provided earnings outlook information for the 2005 second half only. Based on sales trends to date in the third quarter, the Company currently expects net earnings to approximately breakeven for the third quarter ending October 1, 2005.

Comparable same store sales are estimated to decline by approximately 10% in the third quarter. Although the Company had not provided earnings guidance for the third quarter, the consensus estimate of fully diluted earnings per share for the third quarter is $0.29. The Company stated that it currently plans to provide its earnings outlook for the 2005 fourth quarter at its next scheduled earnings conference call.

Norman Axelrod, Chairman and Chief Executive Officer commented that while they expected their performance for this quarter to be difficult, they had not anticipated the significant declines in guest traffic that occurred. Response to their Back-to-School assortments proved disappointing, as their fashion content was too narrow in appeal and they did not make the kind of progress that they expected in strengthening their value proposition with their guests.

The Company also announced that its Board of Directors is exploring strategic alternatives to enhance shareholder value, including a possible sale of the Company. The Company said there can be no assurance that any transaction will occur or, if one is undertaken, its terms or timing. The Company has retained Credit Suisse First Boston LLC as its financial advisor to assist in this process.

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