News Flash

Claire's Q3 consolidated same store sales decline

15 Dec '07

4 min read

Gross margin, which represents merchandise margin less occupancy and buying expense, declined 170 basis points to 50.7%.

A 60 basis point improvement in merchandise margin was more than offset by a loss of operating leverage in rent and rent related items that resulted in a 190 basis point decline, and by higher buying expenses resulting in a 40 basis point decrease.

Selling, general and administrative expenses increased 7.5% to $127.8 million in the third quarter of Fiscal 2008 compared to $118.8 million in last year's comparable fiscal quarter. On a constant currency basis, SG&A expenses increased by only 4.3%, due largely to a 2.1% growth in company operated stores.

For the quarter, Adjusted EBITDA was $60.5 million compared to $68.5 million in the third quarter of Fiscal 2007. The Company defines Adjusted EBITDA as earnings before interest, income taxes, depreciation and amortization, excluding the impact of transaction related costs incurred in connection with the acquisition and other non-recurring or non-cash expenses, and normalizing occupancy costs for certain rent-related adjustments.

At November 3, 2007, our $200 million revolving credit facility was undrawn aside from a $4.5 million letter of credit.

Cash and cash equivalents were $78.0 million. During the third quarter of Fiscal 2008, cash provided by operating activities was approximately $24.4 million, compared with cash provided by operating activities of $56.6 million during the third quarter of Fiscal 2007.

The change in cash provided by operating activities was impacted by the interest expense associated with debt incurred to fund the acquisition.

Capital expenditures during the third quarter of Fiscal 2008 were $23.8 million, of which $19.0 million related to store openings and remodeling projects, with the remainder relating primarily to the enhanced POS rollout. Capital expenditures during the third quarter of Fiscal 2007 were $30.1 million.

Net sales for the first nine months of Fiscal 2008 grew 5.4% to $1,063.5 million from $1,008.7 million. Consolidated same store sales decreased 0.4%. For the first nine months of Fiscal 2008, Adjusted EBITDA was $185.5 million compared to $196.6 million in the first nine months of Fiscal 2007.

Claire's Stores Inc

More Claire's Stores Inc News... More Fashion News - United States Of America...