bebe stores inc.
) announced first-quarter fiscal 2014 results wherein net loss of
12 cents per share rose 300% from the year-ago period loss of 3
cents a share.
However, this was narrower than the Zacks Consensus Estimate of a
loss at 16 cents per share. The loss for the first-quarter is
attributable to the effects of a valuation account being
maintained against deferred tax assets, leading the effective tax
rate to approach 0%.
Net sales of this women's clothing and accessories designer
slipped 2.6% to $114.1million, compared with $117.1 million last
year. However, it came ahead of the Zacks Consensus Estimate of
Same store sales dipped 2.8% during the quarter, compared to an
8.7% fall in the comparable year-ago period and a 7.1% fall in
the final quarter of fiscal 2013. This improvement in revenues
came on the back of better consumer foot fall and conversion.
bebe's gross profit contracted 3.9% to $40,620 million from
the comparable prior-year quarter. Stemming from a decline in
gross profit and sales, gross margin fell 50 basis points to
Selling, general and administrative (SG&A) expenses escalated
8.4% to $50.1 million. The upside reflects the shifting ahead of
marketing events and expenses related to sales conferences.
Operating loss more than doubled to $9,456 million.
This international specialty retail owner opened one new store
and shuttered six bebe outlets and two 2b outlets during the
reported quarter, taking the total store count to 235.
The company ended the quarter with cash and cash equivalents of
$78,010 million, down 19.3% from last year. Inventories fell 7.5%
to $38,381 million. Total shareholders' equity stood at $251,808
million, down 30.2% from the comparable quarter last year.
During the quarter, bebe spent $3.4 million toward capital
expenditure. Additionally, the company declared a quarterly cash
dividend of 2.5 cents, to be paid on Dec 18, 2013 to stockholders
with record as of Dec 4, 2013.
Going forward, we expect the company's new merchandising strategy
along with its practice of lowering inventories to direct it on
In the upcoming quarter, bebe forecasts same store sales to
decline in the mid-single digit range, owing to the challenging
retail environment. The company expects gross margin to fall
below its current level on the back of increased promotional
activities, significant markdown in inventories and a rise in
Net loss in the second quarter is expected to be in the low to
mid-teens per share range due to the continued impact from the
maintenance of valuation accounts as discussed above.
Finished goods inventory at the end of second-quarter fiscal
2014, measured on a per square foot basis, is projected to remain
in line with the comparable prior-year quarter level.
In fiscal 2014, the company plans to spend about $25 million
toward capital expenditures. Capital spends will be directed
toward the opening of new outlets, renovations, office
enhancements, outlet expansions and developing information
Further, this apparel designer is likely to open 1 and shut down
up to 5 bebe outlets and 3 2b bebe outlets in fiscal 2014,
decreasing its total floor area by 5% from fiscal 2013.
Additionally, in fiscal 2014, the company plans to streamline
its international licenses with the closing of unproductive
distribution units, including 32 shop-in-shop stores in Israel,
while opening about 20 new units.
BEBE STORES INC (BEBE): Free Stock Analysis
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FOSSIL GRP INC (FOSL): Free Stock Analysis
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Other Stocks to Consider
bebe stores, inc. carries a Zacks Rank #4 (Sell). However, some
other companies in the retail apparel and shoe sector that
warrant a look include
Fifth & Pacific Companies, Inc.
Fossil Group, Inc.
) all carrying a Zacks Rank #2 (Buy).